Research Frontiers reports first quarter 2019 financial results

Key First Quarter 2019 Comments:

1) In February 2019, Gauzy Ltd. announced its second production facility in Stuttgart, Germany to produce SPD-Smart light control film for the entire SPD-SmartGlass industry

• This state-of-the-art facility with specially-designed coating and curing areas that will give Gauzy the capacity to coat over one million square meters of SPD film per year.

• Gauzy expects the new facility to be in production by the summer of 2019.

2) The Company’s fee income from licensing activities for the three months ended March 31, 2019 was 418,657 USD as compared to 433,269 USD for the three months ended March 31, 2018, representing a 14,612 USD decrease between these two periods.

• When non-recurring fee income items are eliminated, fee income would have increased by 26,384 USD in the first quarter of 2019 as compared to the first quarter of 2018.

• Lower fee income from the architectural market was partially offset by higher levels of fee income in automotive, aircraft and display market sectors.

3) Fee income as reported increased by 47,861 USD, or 13 percent in the first quarter of 2019 as compared to the fourth quarter of 2018.

4) Expenses declined by 247,312 USD, or -20.1 percent, for the 3-month period ending March 31, 2019, as compared to the same period in 2018 due to lower payroll, patent cost and other cost reduction initiatives of the Company.

5) The Company’s net loss was 803,897 USD (0.03 USD per common share) for the three months ended March 31, 2019, as compared to 793,767 USD (0.03 per USD common share) for the three months ended March 31, 2018.

• The Company’s net loss would have been 556,307 USD (0.02 USD per common share) for the three months ended March 31, 2019, as compared to 793,767 USD (0.03 USD per common share) for the three months ended March 31, 2018, or 240,460 USD lower prior to a non-cash accounting expense of 247,590 USD for marking to market the value of certain warrants issued as part of an equity offering during the third quarter of 2018.

6) Cash and cash equivalents increased by 369,097 USD since the end of 2018 principally as a result of cash proceeds of 1,101,782 USD from the issuance of common stock in connection with the exercise of warrants during the three months ended March 31, 2019, that was partially offset by cash used in operation during that period.

7) The Company adopted the Financial Accounting Standards Board’s Standard, Leases (Topic 842), as amended. The standard requires all leases to be recorded on the balance sheet as a right of use asset and a lease liability. At adoption on January 1, 2019, an operating lease liability of 1,114,000 USD and the operating lease right of use asset of 941,000 USD were recorded on the balance sheet.

8) On March 27, 2019, Joseph M. Harary, President & CEO of the company, presented the benefits of SPD-SmartGlass to the Automotive Industry at the Automotive Glazing Summit in Berlin, Germany. On May 13, 2019, Mr. Harary demonstrated at a conference in Novi, Michigan, USA, how SPD-SmartGlass can help electric and internal combustion engine vehicles run more efficiently, drive farther, and make occupants safer and more comfortable.

• These addresses focused on a real-world analysis of the use, benefits and reliability of SPD-SmartGlass in automotive and other glazings.

• Some of the benefits include significant heat reduction inside the vehicle (by up to 10oC), UV protection, glare control, reduced noise and reduced fuel consumption.

• Independent calculations also show that use of SPD-SmartGlass can reduce CO₂ emissions by four grams per kilometre and increase the driving range of electric vehicles by approximately 5.5 percent.