Research Frontiers Inc. has a market cap of $58.2 million; its shares were traded at around $3.4 with and P/S ratio of 81.9. REFR is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:No options were granted during the first three months of 2009. During
the quarter ended March 31, 2009, $31,602 was charged to operations in
connection with the vesting of an earlier option grant to a consultant.
During the quarter ended March 31, 2009, the Company granted
100,000, 199,700 and 250 shares of restricted common stock to its
directors, employees and a consultant, respectively. All of the shares
granted to the directors and the consultant, as well as 1,200 shares
granted to employees vested immediately upon grant. The remaining
198,500 shares vest ratably over the next 36 months. The market value
per share on the date of grant was $2.14. In connection with this grant,
the Company charged $252,503 to operations during the quarter ended
March 31, 2009.
On May 9, 2007, the Company began participating in the funding of the
ongoing development of automotive controllers by SPD Control Systems
Corp., a licensee of the Company. This development work is to produce
the electronic controllers to operate SPD-Smart automotive windows and
glass roof systems for one or more of the top five automotive makers in
the world. The Company's funding of this project is reflected in the
form of a senior secured convertible promissory note (the "Note") of
SPD Control Systems Corp. held by Research Frontiers' wholly-owned
subsidiary, SPD Enterprises Inc. The note bears interest at 10% per
annum, is secured by all of the assets (including intellectual property) of
SPD Control Systems, and is convertible at the option of SPD
Enterprises into common stock of SPD Control Systems at an initial
conversion price of $0.50 per share. This conversion price is adjustable
downward to result in the issuance to SPD Enterprises of additional
shares of SPD Control Systems common stock under certain conditions.
The Note provides for funding of up to $150,000 by SPD Enterprises
based upon the achievement of certain development milestones by SPD
Control Systems. As of March 31, 2010, the principal and interest
amount outstanding under this Note was $150,000 and $35,198,
Operating expenses decreased by $16,112 for the first three months of
2010 to $1,300,187 from $1,316,299 for the first three months of 2009.
This decrease was the result of lower patent ($78,000), insurance
($17,000), professional fees ($18,000) and directors expenses ($99,000)
partially offset by higher payroll and stock compensation charges
($195,000) as well as higher marketing and investor relations costs
Research and development expenditures increased by $29,937 to
$496,312 for the first three months of 2010 from $466,375 for the first
three months of 2009. This increase was principally the result of higher
payroll and stock compensation charges ($86,000) partially offset by
lower materials costs ($38,000) as well as lower allocated insurance
As a consequence of the factors discussed above, the Company's net
loss was $1,665,769 ($.10 per common share) for the first three months
of 2010 as compared to $1,590,550 ($.10 per common share) for the first
three months of 2009.
During the first three months of 2010, the Company's cash and cash
equivalent balance increased by $1,006,117 principally as a result of
cash proceeds from the sale of common stock of $1,618,653 partially
offset by cash used to fund the Company's operating activities of
$610,940. At March 31, 2010, the Company had working capital of
$4,567,150 and its shareholders' equity was $4,724,236.
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