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Equity
9 Months Ended
Sep. 30, 2018
Equity [Abstract]  
Equity

Note 8. Equity

 

On or around February 16, 2018, a small group of long-time shareholders of the Company who are accredited investors made an interest-free five-year convertible loan of $1.25 million to the Company which, upon the occurrence of certain conditions which have already occurred, automatically converted into 1,388,893 shares of common stock at a price equal to the market price of the Company’s common stock when the loan was made, plus warrants expiring February 28, 2023 to purchase 1,388,893 shares of common stock at an exercise price of $1.10, $1.20 or $1.35 per share depending on the exercise date. No payments are due on this note during its five-year term or after conversion into equity. On April 23, 2018, Research Frontiers Incorporated filed a prospectus supplement relating to the issuance and sale of the above common stock and warrant securities with the Securities and Exchange Commission. The Company has recorded this transaction as an equity transaction whereby the proceeds were accounted for as the issuance of the Company’s common stock on the date that the proceeds were received.

 

On September 7, 2018, the Company announced that it had sold common stock to a group of investors led by Gauzy Ltd., a licensee of the Company’s SPD technology. The aggregate proceeds from these stock offerings was $2,000,000. The Company expects as of this filing to have sufficient working capital for at least the next 18-24 months of operations. At the closing, the investors received 2,173,916 shares of Research Frontiers common stock at a price of $0.92 per share, as well as five-year warrants to purchase 1,086,957 shares of Research Frontiers common stock at an exercise price of $1.10, $1.20 or $1.38 per share depending on the exercise date. In connection with the issuance of certain of these warrants during the third quarter of 2018, the Company allocated $223,370 as a warrant liability upon the issuance of these warrants on August 13, 2018 and recorded a non-cash accounting expense of $286,631 to mark these to their market value as of September 30, 2018. This resulted in a liability of $510,001 recorded on the Company’s September 30, 2018 balance sheet.

 

In September 2018, the Company received proceeds of $61,111 and issued 55,556 shares of common stock in connection with the exercise of outstanding warrants.

 

The Company did not sell any equity securities during the three and nine months ended September 30, 2017.