Investment Thesis
Research Frontiers is a financially distressed company with a fundamentally broken business model, burning nearly 6x its annual revenue in cash while revenues decline 16% YoY. With only 1.3M in cash reserves against annual operating burn of 760K, the company will face critical liquidity crisis within approximately 20 months absent significant operational turnaround or capital infusion.
Strengths
- Strong immediate liquidity with 6.38x current/quick ratio providing near-term solvency buffer
- Zero long-term debt (0.00x debt/equity) eliminating leverage risk and providing maximum balance sheet flexibility
- 1.3M in remaining cash reserves provides runway for potential restructuring, asset liquidation, or strategic pivot
Risks
- Catastrophic operating losses at -389% margin with accelerating net losses declining 56% YoY indicates fundamental business model failure
- Negative operating cash flow of -760K annually will completely exhaust 1.3M cash position within ~20 months without revenue improvement
- Collapsed revenue base of only 136.3K with -16% YoY decline suggests severe market rejection of patent licensing business and inability to generate new contracts
Key Metrics to Watch
- Monthly operating cash burn rate and cash runway timeline - critical for solvency prediction
- Revenue trend and new IP licensing deal announcements - only path to business stabilization
- Working capital changes and accounts receivable aging - indicators of operational distress or collection issues
Financial Metrics
Revenue
136.3K
Net Income
-525.4K
EPS (Diluted)
$-0.02
Free Cash Flow
-760.0K
Total Assets
3.1M
Cash
1.3M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-389.1%
Net Margin
-385.4%
ROE
-29.5%
ROA
-17.1%
FCF Margin
-557.5%
Balance Sheet & Liquidity
Current Ratio
6.38x
Quick Ratio
6.38x
Debt/Equity
0.00x
Debt/Assets
42.1%
Interest Coverage
N/A
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T12:50:17.853853 |
Data as of: 2026-03-31 |
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