REFR 10-K
Research Frontiers Inc (REFR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
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On March 5, 2026, the registrant had shares of Common Stock outstanding.
PART I
| ITEM 1. | BUSINESS |
Forward-Looking Statements
Information included in this Annual Report on Form 10-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We generally use the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “will” and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in this Annual Report on Form 10-K under “Item 1A. – Risk Factors” below. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Annual Report on Form 10-K.
General:
As used herein, “we,” “us,” “our,” the “Company” or “Research Frontiers” means Research Frontiers Incorporated unless otherwise indicated. Research Frontiers operates in a single business segment which is engaged in the development and marketing of technology and devices to control the flow of light (see Note 1 to the Consolidated Financial Statements). We develop and license our patented suspended particle device (“SPD-Smart”) light-control technology to other companies that manufacture and/or market the: (i) SPD-Smart chemical emulsion, (ii) light-control film made from the chemical emulsion, (iii) the light-control panels made by laminating the film, (iv) electronics to power end-products incorporating the film, or (v) lamination services for, and the end-products themselves such as “smart” windows, skylights and sunroofs. Research Frontiers currently has numerous companies that, in the aggregate, are licensed to primarily serve five major SPD-Smart application areas (aerospace, architectural, automotive, marine and display products) in every country of the world.
Research Frontiers Incorporated develops and licenses its patented Suspended Particle Device (“SPD”) light-control technology. The Company’s licensees manufacture and sell electronically dimmable glazing products incorporating SPD-Smart technology for automotive, aerospace, architectural, marine, rail, recreational vehicle and specialty vehicle applications.
The Company generates revenue primarily through license fees and royalties paid by licensees. The Company does not manufacture finished glazing products directly and operates in one business segment.
SPD-Smart
products use microscopic light-absorbing nanoparticles suspended within a film. When electrical voltage is applied, the particles align
to allow light transmission. When voltage is removed, the particles disperse to block light. Adjustment of the voltage to the SPD film
gives users the ability to quickly, precisely and consistently regulate the amount of light, glare and heat passing through the window,
skylight, sunroof, window shade or other SPD-Smart end-product. This SPD film can be incorporated between two layers of glass or plastic,
or combinations of both, to produce a laminate that has enhanced energy efficiency, light-control and security performance properties.
The Company has entered into a number of license agreements covering its light control technology. During 2025, five licensees accounted for 21%, 20%, 20%, 19% and 13%, respectively, of fee income recognized during the year. During 2024, four licensees accounted for 34%, 28%, 11% and 11%, respectively, of fee income recognized during the year.
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Research Frontiers was incorporated in New York in 1965 to continue early work that Dr. Edwin Land, founder of Polaroid Corporation, and others had done in the area of light-control beginning in the 1930s. Research Frontiers was reincorporated in Delaware in 1989. Since 1965, Research Frontiers has actively worked to develop and license its own SPD technology, which it protects using patents, trade secrets and know-how. Although patent and trade secret protection is not a guarantee of commercial success, Research Frontiers currently has hundreds of patents and patent applications worldwide. In addition, the Company has received royalty-free perpetual licenses, with the right to sublicense others, of smart glass related intellectual property (including patents and patent applications) from various former licensees. Research Frontiers also has current patent applications worldwide that, if granted, would add a significant number of additional patents to its portfolio. The Company has and continues to devote significant resources to develop, license and protect its intellectual property position.
Research Frontiers believes that the SPD industry is in the initial phase of growth. SPD light-control technology may have commercial applicability in many products where variable light-control is desired. Some existing product applications for SPD-Smart glass or plastic include the following:
| ● | Automotive: |
| sunroofs, sun visors, side windows and rear windows, and head-up displays; | |
| ● | Aerospace and marine: |
| windows, doors, partitions, sun visors, skylights, and lateral cockpit windows; | |
| ● | Architectural: |
| commercial and residential windows, doors, skylights, and partitions for new construction, replacement, and retrofit applications: | |
| ● | Information displays: |
| SPD-Smart light-control film combined with Transparent OLED displays and PDLC projection systems. |
In addition to the product applications listed above, SPD-SmartGlass technology may also offer potential benefits in the development of new flat panel displays, light conservation panels, neonatal and other incubators, consumer electronics, eyewear, automotive exterior lighting systems, self-dimming automotive rear-view mirrors and other reflective information displays. However, such products need additional product design, engineering or testing before the commercial potential of such SPD-SmartGlass products can be determined.
Some of our licensees consider the stage of development, product introduction strategies and timetables, and other plans to be proprietary or secret. Unless required to disclose such information, the Company may limit its disclosure of licensees’ activities until such licensees, or their customers, make their own public announcements of planned or actual product launches.
Some of the early sales and uses of SPD technology were to low volume commercial installations and some have involved concept and test installations by licensees and their customers. Recent progress with regard to market development and commercialization activity has been the result of focused and active efforts by Research Frontiers and its key licensees who have invested in product development and improvements, production facilities, increased production capacity, durability, performance testing, quality control and assurance, and marketing programs.
Research Frontiers believes that with the normal progression of product and manufacturing improvements, and as licensees become more experienced at the lamination, fabrication and installation of SPD-Smart products for various applications, the adoption rates for SPD-Smart products will grow and accelerate, which we expect will increase the stream of royalty income for the Company. Research Frontiers believes the largest and most predictable near and intermediate term market for its technology will be automotive glass.
As part of their marketing and branding programs, many of our licensees have developed their own trademarks for SPD-Smart emulsion, film, and end-products and these are listed in their respective press releases, product brochures, advertising and other promotional materials. Research Frontiers uses the following trademarks: SPD-Smart™, SPD-SmartGlass™, VaryFast™, SPD-CleanTech™, SPD Clean Technology™, SmartGlass™, The View of the Future - Everywhere you Look™, Powered by SPD™, Powered by SPD-CleanTech™, Powered by SPD Clean Technology™, SG Enabled™, SPD Green and Clean™, SPD On-Board™, Speed Matters™ and Visit SmartGlass.com - to change your view of the world™.
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In each of the last three fiscal years the Company devoted substantially all of its time to the development of one class of products, namely SPD-Smart light-control technology, and therefore revenue analysis by class is not provided herein. Information about our operations and those of our licensees is included below and in our financial statements and notes thereto.
The Company does not believe that future sales will be seasonal in any material respect. The Company does not currently directly manufacture products on its own but rather depends on activities of its licensees and vendors. Due to the nature of the Company’s business operations and the fact that the Company is not presently a manufacturer, there is no backlog of orders for the Company’s products.
The Company believes that compliance with federal, state and local provisions which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, will not have a material effect upon the capital expenditures, earnings and competitive position of the Company. The Company has no material capital expenditures for environmental control facilities planned for the remainder of its current fiscal year or its next succeeding fiscal year.
Employees:
On March 4, 2026, the Company had five full-time employees, two of whom are technical personnel, and the rest of whom perform legal, finance, marketing, investor relations, and administrative functions. Of these employees, one has obtained a doctorate in Chemistry and one has extensive industrial experience in electronics and electrical engineering. One employee also has a postgraduate degree in business administration, and one has a doctorate in jurisprudence. Also, the Company’s suppliers and licensees have people on their teams with advanced degrees in a number of areas relevant to the commercial development of products using the Company’s technology. The success of the Company is dependent upon, among other things, the services of its senior management, the loss of which could have a material adverse effect upon the prospects of the Company.
Smart Glass Industry Trends:
There are favorable converging global trends in the major near-term markets for smart glass and SPD-Smart products. The potential for smart glass products is significant and is expected to attain economies of scale with increasing high-volume production. This increased production is also expected to bring down end product costs and expand market opportunities.
In both public and private sectors across the world, there are substantial efforts targeted toward the promotion and use of energy efficient smart glass materials, including those used in automobiles, windows and other architectural glazings, aircraft and boats. Products using SPD-Smart technology continue to be exhibited at trade shows, conferences, and industry events, with such products not only being exhibited by our licensees but also by their customers and by OEMs. While there can be no assurance that these trends will continue, to the extent that they do continue, each is expected to have a beneficial effect on future interest in SPD-Smart technology.
In January 2025, MarketsandMarkets issued Smart Glass Market by Technology (Suspended Particle Display (SPD), Electrochromic Glass, Liquid Crystal/PDLC, Photochromic, Thermochromic and other technologies), Application, Control Mode and Geographic Analysis – Global Forecast to 2030.
This market research report concludes that the global smart glass market is expected to grow from approximately USD $6.4 billion in 2025 to approximately USD $10.4 billion by 2030, representing a compound annual growth rate (CAGR) of approximately 10.2% between 2025 and 2030.
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Key conclusions in this report included:
● Energy efficiency and sustainability as primary drivers: Increasing global emphasis on energy efficiency, reduced HVAC load, and sustainable building design continues to support adoption of smart glass solutions in commercial and residential construction.
● Transportation and automotive demand: Smart glass technologies are increasingly utilized in automotive, aerospace and marine applications for glare control, solar heat management, passenger comfort and design differentiation.
● Cost reductions and innovation: Continued advancements in materials science, manufacturing scale and product integration are expected to contribute to gradual cost reductions and expanded adoption across additional market segments.
Another recent industry report projects the smart glass market to reach approximately USD $13.0 billion by 2030, reflecting a compound annual growth rate in the high single-digit to low double-digit range during the forecast period. Longer-term forecasts based upon third-party research estimates suggest that the global smart glass market could exceed USD $18 billion by the mid-2030s, depending on forecast methodology and segmentation assumptions. The Company does not independently verify third party market projections.
While reported market size and growth rates vary among research firms due to differing methodologies, geographic scope, and definitions of smart glass technologies, these reports consistently characterize the smart glass industry as a multi-billion-dollar global market opportunity with sustained projected growth driven by energy performance requirements, architectural modernization, electrification trends in vehicles, and ongoing technological innovation.
Automotive Market:
In the automotive industry, global trends include the introduction of larger sunroofs and panoramic roof panels in transportation vehicles, and a higher percentage of these vehicles having a sunroof or using more glass in the roof.
SPD-SmartGlass has also been shown in armored automotive glass applications, recreational vehicles, and a new market is also beginning to develop for personalized custom conversions of automobiles for owners who wish to express themselves through the design of the cars they own and/or drive.
Aircraft Market:
In the aircraft industry, there is a trend towards larger windows with more passenger control and functionality, and an increased investment in improving the passenger experience. In the “transport category” (primarily large commercial passenger aircraft) segment, the world’s two largest aircraft manufacturers are both promoting the size of the windows in new aircraft platforms already being delivered (e.g. Boeing 787 and Airbus A350). In the “general aviation” category (primarily business jets, private or chartered smaller aircraft) this trend is true as well. For example, Gulfstream is promoting the size of the windows on their G650 platform as well as their upcoming G700 flagship aircraft, and Bombardier highlights the size of the cabin window on the Global 7000 and 8000 platforms. Several OEMs either already offer, or have announced their interest to include, electronically dimmable windows in their aircraft – including Boeing, Airbus, Bombardier, Embraer, Textron-Beechcraft, HondaJet, Airbus Helicopters, Airbus Corporate Jets, Bell Helicopter, Dassault, Epic Aircraft and One Aviation. Electronically dimmable windows for aircraft may use SPD technology or may use other smart window technologies such as liquid crystal or electrochromic technology. A window system using electrochromic technology was introduced in the Boeing 787. There have been concerns raised that this aircraft’s electronically dimmable windows are not dark enough for long-haul flights, transmit too much heat into the cabin, and have a switching speed that is too slow.
The Company believes its SPD technology offers important performance advantages over other technologies including faster, more uniform response time, superior heat-rejection when the aircraft is parked on the ramp, superior acoustic insulation, an automated dimming system to continuously maintain a constant level of light in the cabin in real-time, weight-savings, and the use of scratch-resistant, lightweight (saving fuel) chemically strengthened glass. Leading companies manufacturing electromechanical pleated window shades have products that incorporate SPD-Smart windows into their designs, and Tier-1 suppliers of other cabin systems (e.g. cabin management systems) are featuring SPD-Smart electronically dimmable windows in mockups.
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SPD technology is also the only commercially available light-control smart window technology known to the Company to have passed the stringent safety and durability tests required by the aviation industry and to have received a Supplemental Type Certificate (STC) from the Federal Aviation Administration.
SPD-Smart electronically dimmable windows are currently flying on more than 40 aircraft models across commercial, business and specialty aviation segments.
Production and forward-fit programs incorporating SPD-SmartGlass include installations on the HondaJet, Textron Aviation Beechcraft King Air series, Daher TBM 960, Epic E1000, Airbus ACJ TwoTwenty corporate jet and select Boeing 737 configurations. These aircraft utilize SPD technology to provide electronically controlled shading, glare reduction and passenger comfort enhancements.
In addition to forward-fit production programs, Supplemental Type Certification (STC) approvals have enabled retrofit installations of SPD-Smart electronically dimmable windows in various Part 23 and Part 25 aircraft. These retrofit programs include business jet, corporate, VIP and special-mission aircraft configurations and allow operators to upgrade cabin window systems without factory-level aircraft redesign.
Licensees have also developed full-cabin demonstrator installations and fuselage mockups to evaluate performance characteristics including switching speed, uniform tinting, heat management and passenger experience across multi-window cabin environments. Such demonstrator programs support airline and operator evaluation processes but do not necessarily represent production commitments.
Procurement decisions regarding electronically dimmable window systems on certain transport category aircraft increasingly involve airline customers in addition to airframe manufacturers. Adoption remains subject to certification requirements, airline specifications, economic considerations and OEM integration cycles.
Compared to certain electrochromic systems, SPD-SmartGlass is designed to provide rapid switching speed, continuously variable tint control and a dark unpowered state. However, adoption of any dynamic glazing technology depends on cost, durability, certification requirements and competitive platform selection decisions.
Architectural Market:
The architectural community is actively increasing the use of daylight harvesting, green building technologies and building automation systems to more effectively capture and control natural light as part of energy reduction strategies to offset cooling/heating costs and electricity used by artificial lighting. In addition to design, aesthetic and other benefits, the expanded use of glass also supports a growing body of research which finds that the presence of and control over incoming natural light improves an individual’s well-being and productivity. Products using SPD-Smart light-control technology – sunroofs, windows, skylights, partitions and others – can play an important role in supporting these converging global trends.
For architectural applications, various market forces and the distinctive features of SPD-SmartGlass are having a positive influence on interest for SPD-Smart products. Many architects are specifying more glass in their designs to satisfy building occupants’ desire for greater connectedness with the outside environment. In addition, there is increasing interest in improving energy efficiency in both commercial and residential buildings. Various studies indicate that buildings in the United States and Europe now account for an estimated 39-40% of total energy use and upwards of 70% or more of electricity consumption. Many architects and building owners are striving for sustainable, “green” buildings that are highly energy-efficient, reduce environmental impact, and improve occupant health and well-being. In addition, the design community is increasingly interested in advanced daylighting systems in buildings that lower electrical lighting usage and reduce heating and cooling loads. Because of this, the ability to control light, glare and heat in these building applications is very important and advanced solutions often are needed to optimize operating efficiencies. SPD-Smart architectural products instantly and precisely provide shading, glare control and heat management solutions for offices and homes, especially when these products are available for new construction, replacement and retrofit projects. These products include insulated glass units, single-panel retrofits, unusually shaped glazings, and products with advanced fabrications such as those with ballistic- and blast-resistant capabilities.
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In 2015, Research Frontiers’ patented SPD-SmartGlass technology was selected as the exclusive smart glass for the USA Pavilion at the World’s Fair, Expo Milano 2015. The USA Pavilion featured 312 large panels of SPD-SmartGlass manufactured under license from Research Frontiers by Isoclima S.p.A. Each panel measures approximately 1 meter by 3 meters, making the total surface area in the roof more than 10,000 square feet. This is the largest known installation of smart glass in the world for a roof application and was seen by over 6 million people.
Marine Market:
In the marine application, where light-control needs are especially important, many yacht manufacturers currently employ less than ideal glazing solutions as they try to satisfy various shading and solar control objectives. For example, some report having to use as many as five different types of glass in a typical yacht to satisfy diverse glazing needs. SPD-Smart marine products can reduce the number of different types of glass used in these yachts because of their increased functionality, superior performance and versatility. SPD-Smart marine products provide an innovation that allows these operators to manage incoming light, glare and heat while achieving privacy or maintaining one’s view as desired.
Historical Background and Recent Developments:
Establishment of SPD-Smart Light Control Film Production:
Hitachi Chemical:
An important material used in SPD-Smart end-products is SPD light-control film that varies the tint of glass or plastic. In early 2007, our licensee Hitachi Chemical began producing its initial SPD-Smart light-control film on its first factory line. During the second half of 2009, Hitachi Chemical announced that it had begun mass production on its new, larger capacity production line and expanded its annual production capacity to 400,000 square meters (over 4.3 million square feet).
Hitachi Chemical’s production line is dedicated exclusively to the production of SPD-Smart film. In July 2009, Hitachi Chemical launched its website dedicated to its SPD-Smart light control film and during 2009, Hitachi Chemical outlined in its press releases and public presentations that it plans to “accelerate the use of SPD film, which holds significant potential for growth” and noted that “SPD film is positioned as one of the key emerging products promoted by Hitachi Chemical to become a future leading product for the company.”
Hitachi Chemical expanded its SPD film product portfolio by initiating commercial production of a “lighter” version of its film. Both the SPD “dark” and “light” versions of the films provide a high range of visible light transmission. The best-selling SPD “dark” film has a range of approximately 0.5% to 55.0%. This leads to contrast ratios (the ratio of clear to dark light transmission) of up to 110:1. The commercialization of both “dark” and “light” versions of SPD-film provides greater design and performance options for end-product applications.
Hitachi Chemical sold its overall business to Showa Denko, and Gauzy acquired the patents and technical information related to SPD light control technology owned or controlled by Showa Denko in February 2023.
Gauzy Ltd.:
In October 2018, Gauzy Ltd. announced that it will be producing SPD-Smart light control film for the entire SPD-SmartGlass industry. The announcement came at a ceremony to celebrate the inauguration of Gauzy’s production line to produce SPD-Smart light control film in Tel Aviv-Jaffa.
Gauzy initially announced that its Tel-Aviv film production line has a capacity to produce up to 364,000 square meters of film per year per shift, and that its initial production will be 1.2 meters wide, and in 2019 it planned on expanding its SPD film coating capabilities to 1.5 meters wide rolls, and in 2020 to 1.8 meters wide rolls. In February 2019 Gauzy announced that it would be expanding its SPD film production capacity by having SPD emulsion produced in Tel Aviv and that this emulsion would be coated into SPD-Smart light control film in a new dedicated factory being built by Gauzy in Stuttgart, Germany.
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In December 2019, Gauzy Ltd. celebrated the opening of 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, will give Gauzy the capacity to coat over one million square meters of SPD film per year in widths of up to 1.8 meters.
Customers for SPD-Smart film are end-product licensees of Research Frontiers. These licensees receive the film, laminate it between glass or plastic substrates, and then fabricate end-products which are sold into various industries. Most end-product licensees pay Research Frontiers a royalty on the sale of these end-products that typically range from 10-15%.
Others:
Other companies are currently licensed by Research Frontiers to sell SPD-Smart light-control film to licensees of Research Frontiers. None of these other companies has yet announced commercial SPD film for sale.
Evolution of Commercial Adoption of SPD-SmartGlass in Commercial Products:
Early Commercial Validation (2011–2015):
The first large-scale serial automotive implementation of SPD-SmartGlass occurred in 2011 when Daimler AG introduced its MAGIC SKY CONTROL™ panoramic glass roof on the Mercedes-Benz SLK roadster. The feature allowed drivers and passengers to electronically vary roof tint from dark to transparent within seconds. Daimler subsequently expanded the use of SPD-SmartGlass to the Mercedes-Benz SL and later to multiple variants of the S-Class platform, including sedan, coupe and Maybach models.
This period marked the transition of SPD-SmartGlass from concept demonstrations to sustained series production in a global luxury automotive brand. The S-Class Coupe roof represented one of the largest automotive roof applications of electronically dimmable glass at the time and demonstrated scalability across vehicle platforms.
In the architectural market, in 2015 Research Frontiers’ patented SPD-SmartGlass technology was selected as the exclusive smart glass for the USA Pavilion at Expo Milano 2015 (World’s Fair). The pavilion featured 312 large panels of SPD-SmartGlass manufactured under license by Isoclima S.p.A., totaling more than 10,000 square feet of smart glazing. The installation was viewed by over 6 million visitors and represented one of the largest publicly exhibited smart glass installations globally.
In aerospace, this period also saw the introduction of SPD-Smart electronically dimmable windows as standard equipment on production aircraft including the HondaJet and Textron-Beechcraft King Air platforms, marking the entry of SPD technology into certified aviation production environments.
Expansion Across Transportation Platforms (2015–2020):
Following Mercedes-Benz’s introduction of MAGIC SKY CONTROL™, additional automotive manufacturers adopted SPD-SmartGlass technology in production vehicles. McLaren Automotive incorporated SPD-SmartGlass into multiple production models, including the McLaren GT, 720S Spider, and Speedtail. The Speedtail program demonstrated advanced integration of SPD-SmartGlass not only in roof systems but also in windshield sun visor areas and other glazing components.
In parallel, Tier-1 transportation suppliers expanded SPD-SmartGlass adoption in marine, rail, recreational vehicle, specialty vehicle and business aviation platforms. Vision Systems (a licensee) integrated SPD-Smart electronically dimmable windows into helicopters, business jets, yachts, trains and motorcoaches. These applications validated SPD’s durability, safety compliance and performance across diverse environmental conditions.
During this period, SPD-SmartGlass technology also achieved Supplemental Type Certificate (STC) approval in aviation, enabling retrofit installations in certified aircraft.
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Multi-OEM
Production and Tier-1 Integration (2020–2024):
Beginning in 2020, the commercial trajectory of SPD-SmartGlass broadened across both electric vehicles and advanced aircraft platforms.
In the automotive sector, General Motors selected SPD-SmartGlass as standard equipment for the roof system of its Cadillac CELESTIQ ultra-luxury electric sedan. The CELESTIQ features a multi-zone electronically dimmable roof system allowing individualized occupant control. Deliveries to customers began in late 2024.
Ferrari subsequently adopted SPD-SmartGlass for the sunroof option on its Purosangue platform. The Ferrari program represented further validation of SPD technology in high-performance luxury vehicles.
In addition to serial production programs with Mercedes-Benz (multiple models), McLaren Automotive (multiple models), General Motors (Cadillac CELESTIQ) and Ferrari (Purosangue), the Company has been working with a number of other automotive OEMs and program models. In addition, SPD-SmartGlass has been incorporated into multiple concept and pre-production vehicles by global automotive OEMs to evaluate expanded glazing integration beyond panoramic roof systems. These have included the BMW Concept Active Tourer, BMW i Vision Circular and BMW i Vision Dee vehicles, which demonstrated SPD-SmartGlass integrated into panoramic roofs, side and rear glazing, windshield zones and display-integrated head-up systems; the Mercedes-Benz Vision V concept vehicle incorporating electronically dimmable glazing across a substantial portion of total glass surface area; the Audi A2 concept with a large SPD panoramic roof; the Toyota FS Hybrid Concept demonstrating interior glass applications; the Lincoln Continental Concept featuring an electronically tinting roof system; and the Fisker EMotion with a segmented SPD panoramic roof and proposed side-window integration. In addition, Tier-1 supplier demonstrator vehicles, including those developed by Continental to highlight the functionality of its Intelligent Glass Control System, have incorporated SPD-SmartGlass into multi-surface glazing configurations including side windows, rear windows and windshield visor zones. While concept vehicle inclusion does not ensure production adoption, these programs reflect continued OEM evaluation of SPD-SmartGlass for broader surface-area applications, multi-zone tinting and integration with advanced digital cockpit systems.
In aerospace, SPD-SmartGlass was incorporated into additional production platforms including the Airbus ACJ TwoTwenty, Boeing 737, Daher TBM 960, Epic E1000, HondaJet and Textron-Beechcraft King Air series.
Across rail, marine and specialty vehicles, Tier-1 suppliers expanded multi-zone SPD-SmartGlass installations with integrated electronics, information displays and automated shading systems.
2025 Inflection and Scaling Phase:
During 2025, several developments marked a transition from validation and niche luxury adoption toward broader production scaling.
Cadillac CELESTIQ Serial Production:
In July 2025, Gauzy and Research Frontiers announced that SPD-SmartGlass is in serial production and customer deliveries on General Motors’ Cadillac CELESTIQ electric sedan, featuring a multi-zone electronically dimmable roof - believed by the Company to be among the largest SPD-SmartGlass deployments in a production vehicle to date.
Mercedes Vision V – Expanded Glazing:
At Auto Shanghai 2025, Mercedes-Benz debuted the Vision V concept vehicle incorporating SPD-SmartGlass across approximately 75% of vehicle glazing. This application expanded SPD beyond panoramic roof systems into broader side and rear glazing, demonstrating the potential for higher surface area integration in future vehicle platforms.
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Ferrari Introduction and Supply Chain Transition:
Ferrari adopted SPD-SmartGlass in the roof of its new Purosangue model. During the second quarter of 2025, one of the Company’s European licensees supplying Ferrari filed for bankruptcy. Production was successfully transitioned to another European licensee without material interruption to the Ferrari program. Although royalty recognition during portions of 2025 was affected by minimum annual royalty provisions, MAR thresholds were exceeded in the third quarter of 2025, enabling additional recognition.
Architectural Retrofit Commercial Introduction:
In November 2025 at GlassBuild America, Research Frontiers and its partners introduced a prefabricated SPD-SmartGlass retrofit system designed to enable conversion of existing building glazing without full window replacement. This development materially expands potential addressable markets within commercial and governmental building modernization programs.
Film Technology Advancement – Black Particle Variant:
During 2025, significant progress was made in development of a black particle variant of SPD film designed to improve optical uniformity, aesthetics, and integration into automotive glazing systems. Early OEM evaluations have been positive, and commercialization remains subject to qualification cycles.
Marketing Activities and Licensee Support:
Because the Company operates under a licensing model and does not manufacture finished products directly, its marketing and market-development activities are focused on supporting licensee commercialization efforts and expanding awareness of SPD-Smart technology among OEMs, Tier-1 suppliers, architects, engineers and other industry decision makers.
The Company participates in major automotive, aerospace and architectural industry conferences, trade exhibitions and technical forums to support licensee programs and engage directly with potential customers. Events in which the Company and/or its licensees have participated include:
| ● | Consumer Electronics Show (CES) |
| ● | Automotive Glazing Summit (including Berlin and Detroit; the Company’s Chief Executive Officer served as conference chairman and keynote speaker at the Detroit, Michigan event in November 2025) |
| ● | International CTI Automotive Glazing USA Conferences |
| ● | International CTI Conference – Automotive Glazing Europe |
| ● | IAA Mobility (formerly Frankfurt International Motor Show) |
| ● | Geneva International Motor Show |
| ● | Munich Auto Show |
| ● | Auto Shanghai |
| ● | North American International Auto Show (Detroit Auto Show) |
| ● | Paris Motor Show |
| ● | Automotive Glazing Summit Europe |
| ● | Aircraft Interiors Expo (AIX) |
| ● | NBAA Business Aviation Convention & Exhibition (NBAA-BACE) |
| ● | EBACE (European Business Aviation Convention & Exhibition) |
| ● | Farnborough International Airshow |
| ● | Paris Air Show |
| ● | GlassBuild America |
| ● | Greenbuild International Conference & Expo |
| ● | AIA Conference on Architecture |
| ● | Advanced Building Skins Conference |
| ● | Autonomous Vehicle Interior Design & Technology Symposium |
| ● | Disruptive Growth & Healthcare Conference |
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In addition to conference participation, the Company supports licensee marketing efforts through:
| ● | Joint presentations and technical discussions with OEMs and Tier-1 suppliers |
| ● | Support of evaluation programs and integration initiatives |
| ● | Development of educational and technical materials for architects and engineers |
| ● | Publication and presentation of independent performance data |
| ● | Engagement with standards-setting organizations, including ASTM International |
The Company maintains an SPD-SmartGlass Design Center at its headquarters in Woodbury, New York, where OEMs, architects and other stakeholders can evaluate SPD-Smart technology alongside alternative dynamic glazing technologies. The Company also operates a referral and lead-generation program directing business inquiries to appropriate licensees.
Commercial success depends primarily on licensee execution, OEM adoption decisions, certification processes and product development cycles. While the Company supports these activities, it does not control the timing or scale of product launches by licensees or their customers.
Research Frontiers believes that SPD products will be strongly preferred over competing technologies once a direct comparison is available to potential buyers. Research Frontiers continues to encourage its competitors to participate in public forums where consumers of electronically tintable products can see the relative performance of products that are available.
Licensees of Research Frontiers:
The Company’s licensees are currently categorized into four main areas: materials for making films (emulsions), film, lamination of film to glass or plastic, and end-products. Emulsion makers produce and combine the necessary materials (i.e. SPD particles and various liquids and special polymers) from which SPD-Smart films are made. The film makers coat a thin layer of emulsion between two sheets of plastic film, each of which has a transparent conductive coating. This emulsion is then partly solidified to form an SPD film that allows users to control the amount of light, glare and heat passing through this film. The end-product licensees then integrate this film into a variety of SPD-Smart products or make electronic systems to control such SPD-Smart products. Some of these end-product licensees do their own lamination of the SPD light-control film to glass or plastic, and some outsource this lamination to other companies. The names of Research Frontiers’ licensees, and the year that their license agreements were entered into, are available on the Company’s SmartGlass.com website and with its filings with the Securities and Exchange Commission.
Licensees of Research Frontiers that incorporate SPD technology into end-products will pay Research Frontiers a royalty of 10-15% of net sales of licensed products under license agreements currently in effect and may also be required to pay Research Frontiers fees and minimum annual royalties. Licensees that sell components (such as SPD emulsion or film) or lamination services to other licensees of Research Frontiers do not pay a royalty on such sale or service, and Research Frontiers will collect a royalty from the licensee incorporating these components into their own SPD-Smart end-products. Research Frontiers’ license agreements typically allow the licensee to terminate the license after some period of time and give Research Frontiers only limited rights to terminate before the license expires. The current licensees of Research Frontiers are listed on the Company’s website, and licenses granted by the Company are non-exclusive and generally last as long as Research Frontiers’ patents remain in effect. Due to their bankruptcy filings or other termination of their general business activities or for other reasons, the Company does not believe that American Glass Products, Polaroid Corporation, Kerros Limited, ThermoView Industries, BRG Group, MDV, Hanamac, SPD Technologies, SPD Systems, and Film Technologies International are pursuing business activities with respect to SPD technology. Some of the Company’s other licensees are currently inactive with respect to SPD technology, but may hereafter become active again.
The Company plans to continue to exploit its SPD-Smart light-control technology by entering into additional license and other agreements with end-product manufacturers such as manufacturers of flat glass, flat panel displays and automotive products, and with other interested companies who may wish to acquire rights to manufacture and sell the Company’s proprietary emulsions and films. Although the Company believes based upon the status of current negotiations that additional license agreements with third parties will be entered into, there can be no assurance that any such additional license agreements will be consummated, or of the extent to which any current or future licensee of the Company will produce or sell commercial products using the Company’s technology or generate meaningful revenue from sales of such licensed products.
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The Company’s plans also call for further development of its technology and the provision of additional technological and marketing assistance to its licensees to develop commercially viable SPD-Smart products and expand the markets for such products. The Company cannot predict when or if new license agreements will be entered into or the extent to which commercial products will result from its existing or future licensees because of general economic conditions and the risks inherent in the developmental process and because commercialization is dependent upon the efforts of its licensees as well as on the continuing research and development efforts of the Company.
Competitive Technologies:
The Company believes that SPD light-control technology, in which particles move under the influence of an electric field, has certain performance advantages over other “smart glass” technologies.
The Company believes that pricing and product performance are the two main factors critical to the adoption of smart glass products. Because the non-SPD smart glass technologies listed below do not have published, consistent pricing or cost data that can be relied upon, the Company cannot accurately report its price position relative to these other technologies. In terms of product performance, the Company believes that SPD-SmartGlass technology offers numerous advantages over other smart glass technologies as discussed below.
Variable light transmission technologies can be classified into two basic types: “active” technologies that can be controlled electrically by the user either automatically or manually, and “passive” technologies that can only react to ambient environmental conditions such as changes in lighting or temperature. One type of passive variable light transmission technology is photochromic technology; such devices change their level of transparency in reaction to external ultra-violet radiation. As compared to photochromic technology, the Company’s SPD technology permits the user to adjust the amount of light passing through the viewing area of the device, rather than the viewing area of the photochromic device merely reacting to external radiation without control by the user. In addition, the reaction time necessary to change from light to dark with SPD-Smart technology can be almost instantaneous, as compared to the much slower reaction time for photochromic devices. Also, unlike SPD technology, photochromic technology does not function well at the high and low ends of the temperature range in which smart windows and other devices are normally expected to operate, nor does photochromic technology perform well in vehicles or other enclosed settings where existing glass is blocking incoming ultra-violet light which is required for photochromic devices to operate.
Similarly, thermochromic smart windows are passive systems which change their light transmission properties as sunlight heats or cools the glass. Because the light transmission properties of thermochromic systems are not controlled by the user, their ability to adapt to the specific needs of occupants is very limited. For example, thermochromic glazings will remain tinted on hot days even when occupants desire more daylight to enter the building or when they want to preserve their views. SPD-Smart windows, which require very low amounts of power to operate, allow for much greater control of incoming light, glare and heat and can be adjusted to any level of light transmission from dark to clear at any time. In addition, SPD-Smart windows can block up to 99.5% of incoming light, a level many times darker than thermochromic systems. The added advantage offers much higher levels of privacy and control over incoming solar energy. Companies involved in thermochromic technology include Pleotint, Suntek and Ravenbrick.
Active, user-controllable technologies, sometimes referred to as “smart” technologies, are generally more useful than passive technologies because they allow the user to actually control the state of the window. This control is achieved with a manual adjustment, or automatically when coupled with a timer or sensing device such as a photocell, motion detector, thermostat or other intelligent building system.
There are three main types of active devices which are compared below:
| ● | Electrochromic devices (EC) |
| ● | Liquid crystal devices (LC) |
| ● | Suspended-particle devices (SPD) |
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Electrochromic Technology:
Electrochromic windows and rear-view mirrors use a direct current voltage to alter the molecular structure of electrochromic materials (which can be in the form of either a liquid, gel or solid film) causing the material to darken. When compared to electrochromic devices, SPD technology is expected to have numerous potential performance and manufacturing advantages, including some or all of the following:
| ● | significantly faster response time, especially compared to larger electrochromic glazings |
| ● | ability to precisely “tune” an infinite number of intermediate light-transmission states |
| ● | consistent and uniform switching speed regardless of size of glazing area |
| ● | more reliable performance over a wider temperature range |
| ● | higher contrast ratios and the capability of achieving darker shaded states for large area product applications |
| ● | unpowered state is dark, maximizing solar heat gain benefits when the room, office or vehicle is not in use |
| ● | lower electrical current drain |
| ● | higher estimated battery life in applications where batteries are used |
| ● | no “iris effect” (where light transmission changes first occur at the outer edges of a window or mirror and then work their way toward the center) when changing from clear to dark and back again |
| ● | SPD technology is a film-based technology that can be applied to plastic, acrylic, and chemically strengthened glass as well as glass, and which can be applied to curved as well as flat surfaces |
| ● | available in single panels for retrofitting existing windows, skylights and doors |
Many companies with substantially greater resources than Research Frontiers such as 3M, Gentex Corp., Pilkington, PPG Industries, Saint-Gobain and other large corporations have pursued or are pursuing projects in the electrochromic area. While some of these companies have reportedly discontinued or substantially curtailed their work on electrochromics due to technical problems and issues relating to the expense of these technologies, at least four companies (Gentex, PPG Industries, View (formerly known as Soladigm), and Sage Electrochromics) are or have been working to commercialize electrochromic window products. In May 2012, Saint-Gobain acquired Sage Electrochromics and combined all of their respective electrochromic manufacturing and developmental efforts. In late 2020, View announced that it was trying to become a public company by merging with a Special Purpose Acquisition Company (“SPAC”) CF Finance Acquisition Corp. II (Nasdaq: CFII). It subsequently filed for bankruptcy protection. Other electrochromic suppliers and developers include Ambilight and Halio (a joint venture between AGC and Kinestral which has also filed for bankruptcy protection or liquidation).
Liquid Crystal Technology:
To date, the main types of liquid crystal smart windows have been produced by Taliq Corp. (a subsidiary of Raychem Corp. which has since discontinued its liquid crystal operations and licensed its technology to others), Asahi Glass Co., Gauzy, Nippon Sheet Glass, Saint-Gobain Glass, iGlass Projects Pty Limited, Polytronix, Inc., DMDisplays, and 3M (which has also reportedly discontinued its liquid crystal film making operations). Additional suppliers of liquid crystal / PDLC-based ‘switchable’ glazing and films include Chiefway and Merck KGaA (through its eyrise® / Licrivision® liquid crystal window technology). Liquid crystal windows only change from a cloudy, opaque milky-white to a clear state, are hazy when viewed at an angle and have no useful intermediate states. As compared to liquid crystal windows, SPD-Smart windows are expected to have some or all of the following advantages:
| ● | have less direct and off-angle haze |
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| ● | in its intermediate tinted states provides shading without loss of view |
| ● | operates over a wider temperature range |
| ● | uses less power |
| ● | higher contrast ratios |
| ● | reduction in the amount of light transmitted rather than simply scatter it |
| ● | permits an infinite number of intermediate states between a transparent state and a dark blue state, rather than typically just two states |
| ● | offers superior solar heat gain control |
In the flat panel display market, further development (such as the achievement of faster switching speeds sufficient for full-motion video applications) is required if the Company expects to compete against display technologies that are currently being used commercially such as liquid crystal displays (“LCDs”) and organic light-emitting diodes (“OLEDs”). Some of the advantages that SPD displays might have include the ability to make displays without using sheet polarizers or alignment layers, and lower light loss and a corresponding reduction in backlighting requirements. However, such products need additional product design, engineering or testing before an evaluation of the commercial potential of such SPD-SmartGlass products can be determined and when, or if, its licensees may begin to penetrate the flat panel display market.
LCDs and other types of displays, liquid crystal windows, as well as electrochromic self-dimmable rear-view mirrors, are already on the market, whereas products incorporating SPD technology (as well as electrochromic windows) have only begun to appear in the marketplace. Therefore, the long-term durability and performance of SPD-Smart displays have not yet been fully ascertained. The companies that manufacture LCD and other display devices, liquid crystal windows, and electrochromic self-dimmable rear-view mirrors and windows, have substantially greater financial resources and manufacturing experience than the Company. There is no assurance that comparable systems having the same advantages of the Company’s SPD technology could not be developed by competitors at a lower cost or that other products could not be developed which would render the Company’s products difficult to market or otherwise render our products obsolete.
Research and Development:
As a result of the Company’s research and development efforts, the Company believes that its SPD technology is now, or with additional development will become, usable in a number of commercial products. Such products may include one or more of the following fields: “smart” windows, doors, skylights and partitions; variable light transmission eyewear such as sunglasses and goggles; self-dimmable automotive sunroofs, windows, sun visors, and mirrors; display cases/frames; and instruments and other information displays that use digits, letters, graphic images, or other symbols to supply information, including scientific instruments, aviation instruments, automobile dashboard displays and, if certain improvements can be made in various features of the Company’s SPD technology that increases switching speed to the levels needed for video applications, portable computer displays and flat panel television displays.
Even though the Company’s SPD technology has much faster switching speeds than electrochromic technology, current switching speeds are not fast enough for such video applications. The Company believes that most of its research and development efforts have applicability to products that may incorporate the Company’s technology. At its current state of development, the Company’s technology has been judged sufficiently advanced by various of its licensees and their customers for them to proceed with the development, introduction and sale of SPD-Smart products. However, the Company is continuously investing in research and development because it believes that further improvements will result in accelerated and increased market penetration. The Company intends to continue its research and development efforts for the foreseeable future to improve its SPD light-control technology and thereby assist our licensees in the product development, sales and marketing of various existing and new SPD-Smart products.
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During the past few years, the Company and/or its licensees have made significant advances relating to materials to enable (1) improved stability of SPD emulsions, (2) a wider range of light transmission, (3) improved film adhesion and cohesion and (4) increased durability of SPD films/laminates, and (5) cost reductions. These advances have resulted in patents being issued to the Company by the US Patent Office and by foreign patent offices, in addition to other patents and patent applications that are pending worldwide.
The Company has devoted most of the resources it has heretofore expended to research and development activities with the goal of producing commercially viable SPD products and has developed working prototypes of SPD-Smart products for several different applications, with primary emphasis on smart windows for various industries. In addition to working with the Company’s licensees, Research Frontiers has also expanded its efforts to also work directly with some of our licensees’ major customers.
Research Frontiers’ main goals in its research and development include:
| ● | developing wider ranges of light transmission and quicker switching speeds |
| ● | developing different colored particles |
| ● | reducing the voltage required to operate SPDs |
| ● | obtaining data and developing improved materials regarding environmental stability and longevity |
| ● | quantifying the degree of energy savings expected by users of the Company’s technology including the degree that SPD technology can control heat and its contribution to energy savings directly and through daylight harvesting strategies in sustainable building designs |
| ● | continually striving to improve the performance and reducing material/production costs associated with making SPD-Smart products |
In January 2025, the Company’s SPD-film producing licensee, announced that the introduction of engineering samples of a black particle variant of SPD-Smart film designed to improve optical uniformity, aesthetic integration, and performance in automotive and architectural applications. The Company believes this advancement enhances competitiveness versus alternative smart glass technologies.and further expands the markets, design flexibility, and aesthetic freedom for customers for SPD-Smart products. Early evaluations by automotive OEMs have been positive. Gauzy is completing the work needed to put the black SPD into mass production on its existing production lines. Commercialization timing remains dependent on OEM qualification and production validation processes. There can be no assurance that ongoing particle development efforts will result in commercially deployable products or improved performance characteristics.
Excluding non-cash expenses of approximately $21,000 and $5,000, respectively, associated with the grant of stock options to the Company’s technical personnel, Research Frontiers incurred approximately $588,000 and $565,000 during the years ended December 31, 2025 and 2024, respectively, for research and development costs. Research Frontiers plans to engage in substantial continuing research and development activities to invest in future improvements in SPD light-control technology and to expand for its licensees the capabilities of SPD-Smart technology and the markets for SPD-Smart products.
Patents and Proprietary Information:
Research Frontiers has and continues to make substantial investments to develop, license and protect its intellectual property position. The Company’s United States patents expire at various dates from 2026 through 2037, and its foreign patents expire at various dates from 2026 through 2037.
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Since 1965, Research Frontiers has actively worked to develop and license its own SPD technology, which it protects using patents, trade secrets and know-how. Although patent and trade secret protection is not a guarantee of commercial success, Research Frontiers currently has hundreds of patents and patent applications worldwide. In addition, the Company has received royalty-free perpetual licenses, with the right to sublicense others, of smart glass related intellectual property (including patents and patent applications) from various former licensees. Research Frontiers also has current patent applications worldwide that, if granted, would add a significant number of additional patents to its portfolio.
The Company believes that its SPD light-control technology is adequately protected by its patent position and by its proprietary technological know-how. However, the validity of the Company’s patents has never been contested in any litigation. The Company also possesses know-how and relies on trade secrets and nondisclosure agreements to protect its technology. The Company generally requires any employee, consultant, or licensee having access to its confidential information to execute an agreement whereby such person agrees to keep such information confidential.
Rights Plan:
In February 2013, the Company’s Board of Directors adopted a Stockholders’ Rights Plan (the “Rights Plan”) and declared a dividend distribution of one right (a “Right”) for each outstanding share of Company common stock to stockholders of record at the close of business on March 3, 2003 (“Record Time”) and authorized the issuance of one Right in respect of each share of Common Stock issued after the Record Time and prior to the Separation Time. The Rights Plan was readopted and extended in December 2022 until February 11, 2033.
“Separation Time” shall mean the earlier of the Close of Business on the tenth Business Day (or such later date as the Board of Directors may from time to time fix by resolution adopted prior to the Separation Time that otherwise would have occurred) following but not including (i) the date on which any Person commences a tender or exchange offer that, if consummated, would result in such Person’s becoming an Acquiring Person, and (ii) the date of the first event causing a Flip-in Date to occur; provided that if any tender or exchange offer referred to in clause (i) of this paragraph is cancelled, terminated or otherwise withdrawn prior to the Separation Time without the purchase of any shares of Common Stock pursuant thereto, such offer shall be deemed, for purposes of this paragraph, never to have been made.
Subject to certain exceptions listed in the Rights Plan, if a person or group has acquired beneficial ownership of, or commences a tender or exchange offer for, 15% or more of the Company’s common stock, unless redeemed by the Company’s Board of Directors, each Right entitles the holder (other than the acquiring person) to purchase from the Company $80 worth of common stock for $40. If the Company is merged into, or 50% or more of its assets or earning power is sold to, the acquiring company, the Rights will also enable the holder (other than the acquiring person) to purchase $80 worth of common stock of the acquiring company for $40. During 2022, the Company extended the expiration of the Rights which will now expire at the close of business on February 11, 2033, unless the Rights Plan is extended by the Company’s Board of Directors or unless the Rights are earlier redeemed by the Company at a price of $.0001 per Right. The Rights are not exercisable during the time when they are redeemable by the Company.
The above description highlights some of the features of the Company’s Rights Plan and is not a complete description of the Rights Plan. A more detailed description and copy of the Rights Plan has been filed with the SEC and is available from the Company upon request.
Available Information:
Our principal executive offices are located at 240 Crossways Park Drive, Woodbury, New York 11797, our telephone number is (516) 364-1902, and our Internet website address is www.SmartGlass.com. We make available free of charge on or through our Internet website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC.
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| ITEM 1A. | RISK FACTORS |
In addition to the other information in this Annual Report on Form 10-K, you should carefully consider the following factors in evaluating us and our business. This Annual Report contains, in addition to historical information, forward-looking statements that involve risks and uncertainties, some of which are beyond our control. Should one or more of these risks and uncertainties materialize or should underlying assumptions prove incorrect, our actual results could differ materially. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below, as well as those discussed elsewhere in this Annual Report, including the documents incorporated by reference.
There are risks associated with investing in companies such as ours who are primarily engaged in research and development. In addition to risks which could apply to any company or business, you should also consider the business we are in and the following:
Source and Need for Capital
As of December 31, 2025, we had approximately $0.7 million in cash and cash equivalents.
As we take steps in the commercialization and marketing of our technology or respond to potential opportunities and/or adverse events, our working capital needs may change. We anticipate that if our cash and cash equivalents are insufficient to satisfy our liquidity requirements, we will require additional funding to sustain our ongoing operations and to continue our SPD technology research and development activities.
We have funded most of our activities through sales of our common stock to investors, and upon the exercise of options and warrants. The eventual success of the Company and generation of positive cash flow will be dependent upon the extent of commercialization of products using the Company’s technology by the Company’s licensees and payments of continuing royalties on account thereof. We can give no assurances that we will generate sufficient cash in the future (through sales of our common stock, exercise of options and warrants, royalty fees, or otherwise) to satisfy our liquidity requirements or sustain future operations, or that additional funding, if required, will be available when needed or, if available, on favorable terms.
As of December 31, 2025, the Company had cash and cash equivalents of approximately $0.7 million, working capital of $0.8 million and total shareholders’ equity of $0.9 million. Based on our current operations, we expect to have sufficient working capital for the foreseeable future. Based on current operating levels and assumptions regarding future royalty growth, we believe our existing cash and working capital are sufficient to fund operations for the foreseeable future. However, actual results may differ from these expectations due to factors including licensee performance and financial stability, timing of royalty receipts, and macroeconomic conditions.
History of Operating Losses
We have experienced net losses from operations, and we may continue to incur net losses from operations in the future. We have incurred substantial costs and expenses in researching and developing our SPD technology. As of December 31, 2025, we had an accumulated deficit of $127.6 million since our inception. Our net loss was $2.0 million in 2025 and $1.3 million in 2024, (which includes non-cash accounting charges in 2025 and 2024 of $0.4 million and $0.1 million, respectively, resulting from the expensing of grants of stock options).
We may not generate sufficient cash flows to cover our operating expenses
As noted above, we have incurred recurring losses since inception and expect to continue to incur losses as a result of costs and expenses related to our research and continued development of our SPD technology and our corporate general and administrative expenses. Our limited capital resources and operations to date have been substantially funded through sales of our common stock, exercise of options and warrants and royalty fees collected. As of December 31, 2025, we had working capital of approximately $0.8 million, cash and cash equivalents of approximately $0.7 million, shareholders’ equity of approximately $0.9 million and an accumulated deficit of $127.6 million. In the event that we are unable to generate sufficient cash from our operating activities or raise additional funds, we may be required to delay, reduce or severely curtail our operations or otherwise impede our on-going business efforts, which could have a material adverse effect on our business, operating results, financial condition and long-term prospects.
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We have never declared a cash dividend and do not intend to declare a cash dividend in the foreseeable future
We have never declared or paid cash dividends on our common stock. Payment of dividends on our common stock is within the discretion of our Board of Directors and will depend upon our future earnings, capital requirements, financial condition and other relevant factors. We do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future.
We do not directly manufacture products using SPD technology. We currently depend upon the activities of our licensees and their customers in order to be profitable
We do not directly manufacture products using SPD technology. We currently depend upon the activities of our licensees in order to be profitable. Although a variety of products have been sold by our licensees, and because it is up to our licensees to decide when and if they will introduce products using SPD technology, we cannot predict when and if our licensees will generate substantial sales of such products. Our SPD technology is currently licensed to numerous companies. Other companies are also evaluating SPD technology for use in various products. In the past, some companies have evaluated our technology without proceeding further. While we expect that our licensees would be primarily responsible for manufacturing and marketing SPD-Smart products and components, we are also engaging in market development activities to support our licensees and build the smart glass industry. We cannot control whether or not our licensees will develop SPD products. Some of our licensees appear to be more active than others, some appear to be better capitalized than others, and some licensees appear to be inactive. There is no guarantee when or if our licensees will successfully produce any commercial product using SPD technology in sufficient quantities to make the Company profitable. During 2025, one of our European licensees supplying an automotive OEM filed for bankruptcy and ceased operations. Although production was transitioned to another licensee, royalty recognition during portions of 2025 was affected. We rely on independent licensees to manufacture and sell products incorporating our technology. The financial distress, insolvency or operational disruption of any significant licensee could delay production, disrupt supply chains, affect the timing of royalty income or require transition to alternative licensees, which may not occur without interruption or additional cost.
SPD-Smart products have only recently been introduced
Products using SPD technology have only recently begun to be introduced into the marketplace. Developing products using new technologies can be risky because problems, expenses and delays frequently occur, and costs may or may not come down quickly enough for such products using new technologies to rapidly penetrate mass market applications.
We have several large licensees that account for 10% or more of our annual fee income
During 2025, five licensees accounted for 21%, 20%, 20%, 19% and 13%, respectively, of fee income recognized for the year. During 2024, four licensees accounted for 34%, 28%, 11% and 11%, respectively, of fee income recognized for the year. The loss of all or a substantial portion of the fee income from any of these customers (or certain other significant customers) could have a material adverse effect on our business, financial condition, and/or results of operations.
SPD-Smart products face intense competition, which could affect our ability to increase our revenues
The market for SPD-Smart products is intensely competitive and we expect competition to increase in the future. We compete based on the functionality and the quality of our product. Many of our current and potential competitors have significantly greater financial, technical, marketing and other resources than we have. In addition, many of our competitors have well-established relationships with our current and potential customers and have extensive knowledge of our industry. If our competitors develop new technologies or new products, improve the functionality or quality of their current products, or reduce their prices, and if we are unable to respond to such competitive developments quickly either because our research and development efforts do not keep pace with our competitors or because of our lack of financial resources, we may be unable to compete effectively.
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Declining production of automobiles, airplanes, trains, boats and real estate could harm our business
Our licensees’ commercialization efforts of SPD-Smart products could be negatively impacted if the global production of automobiles, airplanes, trains, boats and real estate construction declines significantly. If such commercialization is reduced, our revenues, results of operations and financial condition could be negatively impacted.
Limited source of SPD film
Our end-product licensees require a source of SPD film to manufacture finished products. Currently, Gauzy Ltd. is the only source of commercial quantities of SPD-film. There are several other companies that are licensed to manufacture SPD-film, but they have not begun commercial production of this film. Our end-product licensees’ ability to sell SPD products could be negatively impacted if there was a prolonged disruption in SPD-film availability. Such a disruption could also negatively impact our revenues, results of operations and financial condition.
We are dependent on key personnel
Our continued success will depend, to a significant extent, on the services of our directors, executive management team, key personnel and certain key scientists. If one or more of these individuals were to leave the Company, there is no guarantee that we could replace them with qualified individuals in a timely or economically satisfactory manner or at all. The loss or unavailability of any or all of these individuals could harm our ability to execute our business plan, maintain important business relationships and complete certain product development initiatives, which would have a material adverse effect on our business, results of operations and financial conditions.
Dependence on SPD-Smart technology
Because SPD technology is the only technology we work with, our success depends upon the viability of SPD technology which has yet to be fully proven. We have not fully ascertained the performance and long-term reliability of our technology, and therefore there is no guarantee that our technology will successfully be incorporated into all of the products which we are targeting for use of SPD technology. We expect that different product applications for SPD technology will have different performance and reliability specifications. We expect that our licensees will primarily be responsible for reliability testing, but that we may also continue to do reliability testing so that we can more effectively focus our research and development efforts towards constantly improving the performance characteristics and reliability of products using SPD technology.
Our patents and other protective measures may not adequately protect our proprietary intellectual property, and we may be infringing on the rights of others
Our intellectual property, particularly our proprietary rights in our SPD technology, is critical to our success. We have received various patents, and filed other patent applications, for various applications and aspects of our SPD technology. In addition, we generally enter into confidentiality and invention agreements with our employees and consultants. Such patents and agreements and various other measures we take to protect our intellectual property from use by others may not be effective for various reasons generally applicable to patents and their granting and enforcement. In addition, the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may be expensive. Our inability to protect our proprietary intellectual property rights or gain a competitive advantage from such rights could harm our ability to generate revenues and, as a result, our business and operations.
If we fail to maintain an effective system of internal control over financial reporting, the accuracy and timing of our financial reporting may be adversely affected
Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses identified through such evaluation of those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
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If we identify material weaknesses or significant deficiencies in our internal controls or disclosure controls, we may be unable to provide required financial information in a timely and reliable manner and we may incorrectly report financial information. If our financial statements are not filed on a timely basis, we could be subject to adverse action by shareholders, Nasdaq, the SEC or other regulatory authorities. The existence of material weaknesses or significant deficiencies in internal control over financial reporting could adversely affect our reputation or investor perceptions of us, which could have a negative effect on the trading price of our stock. In addition, we may incur additional costs to remediate material weaknesses or significant deficiencies in our internal control over financial reporting.
We cannot assure you that a material weakness will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting. In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.
| ITEM 1B. | UNRESOLVED STAFF COMMENTS |
None.
ITEM 1C. Cybersecurity
Our cybersecurity risk management is based on recognized cybersecurity industry frameworks and standards, We use these frameworks, together with information collected from internal assessments, to develop policies for use of our information assets, access to specific intellectual property or technologies, and protection of personal information. We protect these information assets through industry-standard techniques, such as multifactor authentication and malware defenses. We also work with internal stakeholders at the Company to integrate foundational cybersecurity principles throughout our organization’s operations, including employment of multiple layers of cybersecurity defenses, restricted access based on business need, and integrity of our business information.
We
collaborate with industry experts and cybersecurity practitioners at other companies to exchange information about potential cybersecurity
threats, best practices and trends. Our cybersecurity risk management extends to risks associated with our use of
| ITEM 2. | PROPERTIES |
The Company currently occupies approximately 9,500 square feet of space at an annual rent which, in 2025 was approximately $268,000, for its executive office, research facility and SPD-Smart Glass Design Center at 240 Crossways Park Drive, Woodbury, New York 11797 under a lease expiring December 31, 2027, with renewal options through December 31, 2031. The Company believes that its space, including its laboratory facilities, is adequate for its present needs.
| ITEM 3. | LEGAL PROCEEDINGS |
There are no legal proceedings pending by or against the Company required to be reported under this Item 3.
| ITEM 4. | MINE SAFETY DISCLOSURES |
None.
| 19 |
PART II
| ITEM 5. | MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
(a) Market Information
| (1) | The Company’s common stock is traded on the NASDAQ Capital Market under the symbol “REFR”. As of March 4, 2026, there were 34,648,221 shares of common stock outstanding. |
| (2) | The following table sets forth the range of the high and low selling prices (as provided by the National Association of Securities Dealers) of the Company’s common stock for each quarterly period within the past two fiscal years: |
| Quarter Ended | Low | High | ||||||
| March 31, 2024 | $ | 0.93 | $ | 1.57 | ||||
| June 30, 2024 | $ | 1.16 | $ | 2.41 | ||||
| September 30, 2024 | $ | 1.79 | $ | 2.39 | ||||
| December 31, 2024 | $ | 1.53 | $ | 2.31 | ||||
| March 31, 2025 | $ | 1.10 | $ | 1.86 | ||||
| June 30, 2025 | $ | 0.93 | $ | 2.09 | ||||
| September 30, 2025 | $ | 1.21 | $ | 1.97 | ||||
| December 31, 2025 | $ | 1.26 | $ | 2.70 | ||||
These quotations may reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions.
(b) Approximate Number of Security Holders
As of March 4, 2026, there were approximately 259 holders of record of the Company’s common stock and the closing price of our common stock was $1.01 per share. The Company estimates that there are approximately 5,000 beneficial holders of the Company’s common stock.
(c) Dividends
The Company has not declared or paid cash dividends on its common stock for the two most recent fiscal years and does not expect to declare or pay any cash dividends in the foreseeable future. There are no restrictions on the payment of dividends.
(d) Issuer Purchases of Equity Securities
None.
ITEM 6.
None.
| 20 |
| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Forward-Looking Statements
Information included in this Annual Report on Form 10-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We generally use the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “will” and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in this Annual Report on Form 10-K under “Item 1A. – Risk Factors” above. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Annual Report on Form 10-K.
In reviewing Management’s Discussion and Analysis of Financial Condition and Results of Operations, you should refer to our consolidated financial statements and the notes related thereto.
Critical Accounting Policies and Estimates
The following accounting estimates are important to understanding our financial condition and results of operations and should be read as an integral part of the discussion and analysis of the results of our operations and financial position. For additional accounting policies, see Note 2 to our Consolidated Financial Statements, “Summary of Significant Accounting Policies.”
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.
The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers”. The Company determined that its license agreements provide for three performance obligations: (i) Grant of Use, (ii) Technical Support, and (iii) New Improvements.
The best method for determining the standalone selling price of our Grant of Use performance obligation is through a comparison of the average royalty rate for comparable license agreements as compared to our license agreements. Based on the royalty rate comparison referred to above, any pricing above and beyond the average royalty rate would relate to the Technical Support and New Improvements performance obligations.
We recognize revenue when or as the performance obligations in the contract are satisfied. For performance obligations that are fulfilled at a point in time, revenue is recognized at the fulfillment of the performance obligation. Since the IP is determined to be a functional license, the value of the Grant of Use is recognized in the first period of the contract term in which the license agreement is in force. Since the costs incurred to satisfy the Technical Support and New Improvements performance obligations are incurred evenly throughout the year, the value of the Technical Support and New Improvements services are recognized throughout the contract period as these performance obligations are satisfied.
The Company has entered into license agreements covering products using the Company’s SPD technology. When royalties from the sales of licensed products by a licensee exceed its contractual minimum annual royalties, the excess amount is recognized by the Company as fee income in the period that it was earned. Certain of the fees are accrued by, or paid to, the Company in advance of the period in which they are earned, resulting in deferred revenue. Certain license agreements contain minimum annual royalty provisions and prepaid royalty structures. In periods where sales volumes increase rapidly or supply transitions occur, royalty income attributable to such sales may be absorbed by previously paid minimum royalties and not recognized until thresholds are exceeded. As a result, our reported revenues in a particular period may not directly correspond to underlying product sales volumes, which could increase volatility in our reported results.
Royalty receivables are stated less allowance for credit losses. The allowance represents estimated uncollectible receivables usually due to licensees’ potential insolvency. The allowance includes amounts for certain licensees where risk of default has been specifically identified. The Company evaluates the collectability of its receivables on at least a quarterly basis and records appropriate allowances for credit losses when necessary.
| 21 |
Results of Operations
Overview
The majority of the Company’s fee income comes from the activities of several licensees participating in the automotive market. The Company currently believes that the automotive market will be the largest source of its royalty income over the next several years. The Company’s royalty income from this market may be influenced by numerous factors including various trends affecting demand in the automotive industry and the rate of introduction of new technology in OEM product lines. In addition to these macro factors, the Company’s royalty income from the automotive market could also be influenced by specific factors such as whether the Company’s SPD-SmartGlass technology appears as standard equipment or as an option on a particular vehicle, the number of additional vehicle models that SPD-SmartGlass appears on, the size of each window on a vehicle and the number of windows on a vehicle that use SPD-SmartGlass, fluctuations in the total number of vehicles produced by a manufacturer, and in the percentage of cars within model like produced with SPD-SmartGlass, and changes in pricing or exchange rates. Certain license fees, which are paid to the Company in advance of the accounting period in which they are earned resulting in the recognition of deferred revenue for the current accounting period, which will be recognized as fee income in future periods. Also, licensees offset some or all of their royalty payments on sales of licensed products for a given period by applying these advance payments towards such earned royalty payments.
In 2025 and 2024, the Company received royalty revenues from sales of SPD-SmartGlass products for various car models that were accretive to the Company’s royalty revenue. Production efficiencies are expected to continue and accelerate with the introduction of the higher vehicle production volumes for various car models going forward, and the Company expects that lower pricing per square foot of the Company’s technology could expand the market opportunities, adoption rates, and revenues for its technology in automotive and non-automotive applications. The Company expects to generate additional royalty income from the near-term introduction of additional new car and aircraft models from other OEMs (original equipment manufacturers), continued growth of sales of products using the Company’s technology for the marine industry in yachts and other watercraft, in trains, in museums, and in larger architectural projects.
Year ended December 31, 2025 Compared to the Year ended December 31, 2024
The Company’s fee income from licensing activities for the year ended December 31, 2025 was $1,121,248 compared to $1,335,531 for the year ended December 31, 2024. This decrease in fee income in 2025 by $214,283, a decrease of 16%, was primarily the result of lower royalties from the automotive and aircraft markets. The Company expects revenue in all market segments to increase as new car models and other products using the Company’s SPD-SmartGlass technology are introduced into the market.
Automotive royalty income during 2025 was negatively impacted by the bankruptcy and replacement of a European licensee supplying Ferrari. While underlying Ferrari vehicle sales were strong in 2025, royalty income recognition was reduced due to (i) the cessation of operations by the former licensee and (ii) the application of minimum annual royalty credits under the replacement licensee agreement. Beginning in the third and fourth quarters of 2025, these minimum thresholds were exceeded, allowing additional Ferrari-related royalty income to be recognized.
Operating expenses increased by $437,287 for the year ended December 31, 2025 to $2,644,684 from $2,207,397 for the year ended December 31, 2024. The increase is the result of higher credit loss expense ($129,000), higher directors fees and expenses ($162,000, consisting of non-cash costs of stock options granted to directors), higher marketing and investor relations costs ($68,000) as well as higher film purchase costs ($40,000) and higher professional fees ($37,000). Operating expenses for the years ended December 31, 2025 and 2024 include $354,000 and $84,000, respectively, of non-cash charges for stock options granted to employees, directors and consultants.
Research and development expenditures increased by $38,725 for the year ended December 31, 2025 to $608,732 from $570,007 for the year ended December 31, 2024. This increase was the result of higher occupancy costs ($47,000) as well as higher employee compensation costs ($12,000) partially offset by lower insurance costs ($25,000). Research and development costs include non-cash charges for stock options granted to employees of $21,000 and $5,000 in 2025 and 2024, respectively.
The Company’s net investment income for the year ended December 31, 2025 was $39,227 as compared to net investment income of $95,339 for the year ended December 31, 2024. This difference was primarily due to lower cash balances available for investment.
| 22 |
The Company recorded $47,357 and $35,152 of other income during the years ended December 31, 2025 and 2024, respectively, relating to an Employee Retention Credit, a refundable payroll tax credit available under the Coronavirus Aid, Relief, and Economic Security Act (“Cares Act”) that was designed to keep employees on the payroll during the COVID-19 pandemic.
No income tax benefit or expense was recorded for the years ended December 31, 2025 and 2024.
As a consequence of the factors discussed above, the Company’s net loss was $2,045,584 ($0.06 per common share) for the year ended December 31, 2025, as compared to the net loss of $1,311,382 ($0.04 per common share) for the year ended December 31, 2024.
Financial Condition, Liquidity and Capital Resources
On February 18, 2026, the Company entered into subscription agreements from a group of private accredited investors, which included family members of a director of the Company, as well as the owner of a licensee of the Company licensed to produce SPD-SmartGlass products including for the retrofit architectural glass market.
The investors purchased 1.1 million shares of common stock of the Company at a price of $1.00 per share (which represents the closing market price of the Company’s common stock on February 13, 2026 which was the date that the transaction was agreed to). The Company received $1.1 million in proceeds from the sale of common stock to the investors. For each share received, the investor also received one warrant (expiring on February 28, 2031) to purchase one share of common stock at an exercise price of $1.10 for warrant exercises occurring on or before February 28, 2027, $1.20 for warrant exercises occurring between March 1, 2027 through February 29, 2028, $1.30 for warrant exercises occurring between March 1, 2028 through February 28, 2029, and $1.50 for warrant exercises occurring after February 28, 2029 and prior to the expiration of the warrants.
The shares were issued to the investors in a private placement and, along with the shares issued in connection with the exercise of any warrants in the future, are not registered and therefore currently subject to at least a six-month holding period by the investor.
The Company has primarily utilized its cash, cash equivalents and proceeds from sales of our common stock, proceeds from the exercise of options and warrants, and royalty fees collected to fund its research and development, for marketing initiatives, and for other working capital purposes. The Company’s working capital and capital requirements depend upon numerous factors, including, but not limited to, the results of research and development activities, competitive and technological developments, the timing and costs of patent filings, and obtaining new licensees and changes in the Company’s relationship with existing licensees. The degree of dependence of the Company’s working capital requirements on each of the foregoing factors cannot be quantified; increased research and development activities and related costs would increase such requirements; the addition of new licensees may provide additional working capital or working capital requirements, and changes in relationships with existing licensees would have a favorable or negative impact depending upon the nature of such changes.
During 2025, the Company’s cash and cash equivalents balance decreased by $1,329,887 principally as a result of cash used for operations of $1,329,161 and for the purchase of property and equipment of $726. At December 31, 2025, the Company had cash and cash equivalents of $0.7 million, working capital of $0.9 million and total shareholders’ equity of $1.0 million. Based on current operations, we expect to have sufficient working capital for a period of at least 12 months from the date of this filing.
The Company expects to use its cash to fund its research and development of SPD light valves, its expanded marketing initiatives, and for other working capital purposes. The Company believes that its current cash and cash equivalents would fund its operations for more than the foreseeable future. There can be no assurances that expenditures will not exceed the anticipated amounts or that additional financing, if required, will be available when needed or, if available, that its terms will be favorable or acceptable to the Company. The eventual success of the Company and generation of positive cash flow will be dependent upon the extent of commercialization of products using the Company’s technology by the Company’s licensees and payments of continuing royalties on account thereof.
| 23 |
During 2024, the Company’s cash and cash equivalents balance decreased by $481,772 principally as a result of cash used for operations of $788,819 and for the purchase of property and equipment of $1,623, partially offset by cash generated from the issuance of capital stock and warrants of $300,000 as well as cash generated from the exercise of options of $8,670. At December 31, 2024, the Company had cash and cash equivalents of $2.0 million, working capital of $2.5 million and total shareholders’ equity of $2.6 million. Based on current operations, we expect to have sufficient working capital for more than the foreseeable future.
Inflation
The Company does not believe that inflation has a significant impact on its business.
Contractual Obligations
The Company has an operating lease for its facility with a remaining lease term of 6.0 years, including renewal options as of December 31, 2025. The maturities over time of the operating lease obligations as of December 31, 2025 were as follows:
| December 31, 2025 | ||||
| Year 1 | $ | 223,000 | ||
| Years 2-3 | 464,000 | |||
| Years 4-5 | 496,000 | |||
| Thereafter | 259,000 | |||
| Total lease payments | $ | 1,442,000 | ||
See Note 9 to our Consolidated Financial Statements for further discussion of the Company’s lease obligations.
Off-Balance Sheet Arrangements
The Company has no variable interest entities or other off-balance sheet obligation arrangements.
Forward Looking Statements
The information set forth in this report and in all publicly disseminated information about the Company, including the narrative contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” above, includes “forward-looking statements” within the meaning of 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by that section. Readers are cautioned not to place undue reliance on these forward-looking statements as they speak only as of the date hereof and are not guaranteed.
| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
The consolidated financial statements listed in Item 15(a)(1) and (2) are included in this report beginning on page F-1.
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None
| 24 |
| ITEM 9A. | CONTROLS AND PROCEDURES |
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report on Form 10-K, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and acting interim Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) and 15d-15(e). Based upon that evaluation, the Company’s Chief Executive Officer and acting interim Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiary) required to be included in the Company’s periodic SEC filings. Our Chief Executive Officer and acting interim Chief Financial Officer has concluded that as of December 31, 2025 our disclosure controls and procedures are designed, and are effective, to ensure that information required to be disclosed by our Company in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the commission’s rules and forms, and are also effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and acting interim Chief Financial Officer, to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control system is designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements. Under the supervision and with the participation of our management, including our Chief Executive Officer and acting interim Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013), or the COSO Framework. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Acting Interim Chief Financial Officer concluded that, as of such date, our internal control over financial reporting was effective.
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting because such attestation report is not required by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission.
Changes in Internal Control Over Financial Reporting
There were no changes to controls during the three months ended December 31, 2025 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
| ITEM 9B. | OTHER INFORMATION |
| 25 |
PART III
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
The Company has adopted a Code of Ethics applicable to its Chief Executive Officer, Chief Operating Officer, Treasurer and Chief Financial Officer, Vice Presidents and other employees of the Company with important roles in the financial reporting process. This Code of Ethics was adopted by the entire Board of Directors of the Company, including all of its Audit Committee members, in March 2004 in accordance with the requirements of the Sarbanes Oxley Act. The Code of Ethics is available on the Company’s website at www.SmartGlass.com and was also filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company intends to satisfy the disclosure requirement under Item 10 of Form 8-K regarding any amendment to, or waiver from, a provision of this Code of Ethics by posting such information on the website specified above.
The other information required by this Item 10 is incorporated by reference to the Company’s definitive Proxy Statement to be filed with the Commission on or before April 30, 2026.
| ITEM 11. | EXECUTIVE COMPENSATION |
The information required by this Item 11 is incorporated by reference to the Company’s definitive Proxy Statement to be filed with the Commission on or before April 30, 2026. Notwithstanding anything to the contrary set forth herein or in any of the Company’s past or future filings with the SEC that might incorporate by reference the Company’s definitive Proxy Statement, in whole or in part, the report of the compensation committee and the stock price performance graph contained in such definitive Proxy Statement shall not be incorporated by reference into this Annual Report on Form 10-K or in any other such filings.
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The information required by this Item 12 is incorporated by reference to the Company’s definitive Proxy Statement to be filed with the Commission on or before April 30, 2026.
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE. |
The information required by this Item 13 is incorporated by reference to the Company’s definitive Proxy Statement to be filed with the Commission on or before April 30, 2026.
| ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Our independent registered public accounting firm is CohnReznick LLP, Melville, NY, Auditor Firm ID No: 596. The information required by this Item 14 is incorporated by reference to the Company’s definitive Proxy Statement to be filed with the Commission on or before April 30, 2026.
| 26 |
PART IV
| ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K |
(a)(1) and (2) Financial Statements and Financial Statement Schedules
The following consolidated financial statements of Research Frontiers Incorporated are filed under “Item 8. Financial Statements and Supplemental Data” of this Report.
All other schedules have been omitted because they are not applicable, or not required, or the required information is disclosed elsewhere in this Annual Report.
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| EX-101.INS | Inline XBRL INSTANCE DOCUMENT | |
| EX-101.SCH | Inline XBRL TAXONOMY EXTENSION SCHEMA | |
| EX-101.PRE | Inline XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE | |
| EX-101.LAB | Inline XBRL TAXONOMY EXTENSION LABEL LINKBASE | |
| EX-101.CAL | Inline XBRL TAXONOMY EXTENSION CALCULATION LINKBASE | |
| EX-101.DEF | Inline XBRL TAXONOMY EXTENSION DEFINITION LINKBASE | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Executive Compensation Plan or Arrangement.
| ITEM 16. | FORM 10-K SUMMARY |
None.
| 34 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| RESEARCH FRONTIERS INCORPORATED | |
| (Registrant) | |
| /s/ Joseph M. Harary | |
| Joseph M. Harary, President, CEO and Acting Interim CFO | |
| (Principal Executive Officer and Principal Financial and Accounting Officer) |
Dated: March 5, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
| Signature | Position | Date | ||
| /s/ Darryl Daigle | Director | March 5, 2026 | ||
| Darryl Daigle | ||||
| /s/ Joseph M. Harary | Director, President, CEO and Acting Interim CFO | March 5, 2026 | ||
| Joseph M. Harary | ||||
| /s/ Alexander Kaganowicz | Director | March 5, 2026 | ||
| Alexander Kaganowicz | ||||
| /s/ Eyal Peso | Director | March 5, 2026 | ||
| Eyal Peso |
| 35 |
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
Research Frontiers Incorporated
Opinion on the Consolidated Financial Statements
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/
We have served as Research Frontiers Incorporated’s auditor since 2019.
March 5, 2026
| F-1 |
RESEARCH FRONTIERS INCORPORATED
Consolidated Balance Sheets
December 31, 2025 and 2024
| Assets | December 31, 2025 | December 31, 2024 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Royalties receivable, net of reserves of $ | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Fixed assets, net | ||||||||
| Operating lease ROU assets | ||||||||
| Deposits and other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of operating lease liability | $ | $ | ||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Total current liabilities | ||||||||
| Operating lease liability, net of current portion | ||||||||
| Total liabilities | ||||||||
| Shareholders’ equity: | ||||||||
| Common stock, par value $ per share; authorized shares, issued and outstanding in 2025 and 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-2 |
RESEARCH FRONTIERS INCORPORATED
Consolidated Statements of Operations
Years ended December 31, 2025 and 2024
| 2025 | 2024 | |||||||
| Fee income | $ | $ | ||||||
| Operating expenses | ||||||||
| Research and development | ||||||||
| Total expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Net investment income | ||||||||
| Other income | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted net loss | ||||||||
| per common share | $ | ) | $ | ) | ||||
| Weighted average number of | ||||||||
| common shares outstanding | ||||||||
See accompanying notes to consolidated financial statements.
| F-3 |
RESEARCH FRONTIERS INCORPORATED
Consolidated Statements of Shareholders’ Equity
Years ended December 31, 2025 and 2024
| Common Stock | Additional Paid-in | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Exercise of options | ||||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||
| Issuance of common stock and warrants | ||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, December 31, 2024 | ( | ) | ||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
See accompanying notes to consolidated financial statements.
| F-4 |
RESEARCH FRONTIERS INCORPORATED
Consolidated Statements of Cash Flows
Years ended December 31, 2025 and 2024
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Share-based compensation | ||||||||
| Credit loss expense | ||||||||
| ROU asset amortization | ||||||||
| Change in assets and liabilities: | ||||||||
| Royalty receivables | ||||||||
| Prepaid expenses and other assets | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of fixed assets | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from exercise of options | ||||||||
| Proceeds from issuance of common stock and warrants | ||||||||
| Net cash provided by financing activities | ||||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents, at beginning of year | ||||||||
| Cash and cash equivalents, at end of year | $ | $ | ||||||
| Supplemental disclosure of noncash items: | ||||||||
| Operating lease assets obtained for operating lease liabilities | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-5 |
RESEARCH FRONTIERS INCORPORATED
Notes to Consolidated Financial Statements
(1) Business and Basis for Presentation
Research Frontiers Incorporated (“Research Frontiers” or the “Company”) operates in a single business segment which is 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 colloidal particles that are either incorporated within a liquid suspension or a film, which is usually enclosed between two sheets of glass or plastic having transparent, electrically conductive coatings on the facing surfaces thereof. At least one of the two sheets is transparent. SPD technology, made possible by a flexible light-control film invented by Research Frontiers, allows the user to instantly and precisely control the shading of glass/plastic manually or automatically. SPD technology has numerous product applications, including SPD-Smart™ windows, sunshades, skylights and interior partitions for homes and buildings; automotive windows, sunroofs, sun visors, sunshades, rear-view mirrors, instrument panels, heads up displays and navigation systems; aircraft windows; museum display panels; eyewear products; and flat panel displays for electronic products. SPD-Smart light control film is now being developed for, or used in, architectural, automotive, marine, aerospace and appliance applications.
The
Company has primarily utilized its cash, cash equivalents, and investments generated from sales of our common stock, proceeds from the
exercise of stock options and warrants, and royalty fees collected to fund its research and development of SPD light valves, for marketing
initiatives, and for other working capital purposes. The Company’s working capital and capital requirements depend upon numerous
factors, including the results of research and development activities, competitive and technological developments, the timing and cost
of patent filings, and the development of new licensees and changes in the Company’s relationships with its existing licensees.
The degree of dependence of the Company’s working capital requirements on each of the foregoing factors cannot be quantified; increased
research and development activities and related costs would increase such requirements; the addition of new licensees may provide additional
working capital or working capital requirements, and changes in relationships with existing licensees would have a favorable or negative
impact depending upon the nature of such changes. We have incurred recurring losses since inception and expect to continue to incur losses
as a result of costs and expenses related to our research and continued development of our SPD technology and our corporate general and
administrative expenses. Our limited capital resources and operations to date have been substantially funded through sales of our common
stock, exercise of stock options and warrants and royalty fees collected. As of December 31, 2025, we had working capital of approximately
$
On February 18, 2026, the Company entered into subscription agreements from a group of private accredited investors, which included family members of a director of the Company, as well as the owner of a licensee of the Company licensed to produce SPD-SmartGlass products including for the retrofit architectural glass market.
The
investors purchased million shares of common stock of the Company at a price of $ per share (which represents the closing market
price of the Company’s common stock on February 13, 2026 which was the date that the transaction was agreed to). The Company received $
The shares were issued to the investors in a private placement and, along with the shares issued in connection with the exercise of any warrants in the future, are not registered and therefore currently subject to at least a six-month holding period by the investor.
In the event that we are unable to generate sufficient cash from our operating activities or raise additional funds, we may be required to delay, reduce or severely curtail our operations or otherwise impede our on-going business efforts, which could have a material adverse effect on our business, operating results, financial condition and long-term prospects. The Company may seek to obtain additional funding through future equity issuances. There can be no assurance as to the availability or terms upon which such financing and capital might be available. The eventual success of the Company and generation of positive cash flow will be dependent upon the commercialization of products using the Company’s technology by the Company’s licensees and payments of continuing royalties on account thereof.
(2) Summary of Significant Accounting Policies
(a) Cash and Cash Equivalents
The Company considers securities purchased with original maturities of three months or less to be cash equivalents. Cash equivalents consist of short-term investments in money market accounts at December 31, 2025 and 2024.
| F-6 |
Cash
and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits and at times consist of federally uninsured money market funds. We have
never experienced any losses related to these balances. FDIC insurance coverage is $
(b) Leases
Lease assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term, using the Company’s incremental borrowing rate commensurate with the lease term, since the Company’s lessor did not provide an implicit rate, nor is one readily available. The Company has a lease that includes an option to renew and when it is reasonably probable that such option would be exercised, the Company will include the renewal option terms in determining the lease asset and lease liability. Lease assets represent the Company’s right-to-use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating lease assets are shown as right-of-use assets and financing lease assets are a component of fixed assets on the consolidated balance sheets. The current and long-term portions of operating and financing lease liabilities are shown separately as such on the consolidated balance sheets.
(c) Royalties Receivable
Royalties
receivable from licensees are recorded at the amounts specified within the license agreements when the collectability of the receivable
is reasonably assured. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in
the Company’s existing royalties receivable. The Company determines the allowance based on historical write-off experience as well
as the current status of the Company’s customers. The Company reviews its allowance for credit losses periodically. Past due accounts
are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have
been exhausted and the potential for recovery is considered remote. As of December 31, 2025, two companies accounted for
(d) Fixed Assets
Fixed assets are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets.
| F-7 |
(e) Revenue Recognition/Fee Income
The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The standard provides a single comprehensive revenue recognition model for all contracts with customers and supersedes existing revenue recognition guidance. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services.
ASC 606 follows a five-step approach to determining revenue recognition including: 1) Identification of the contract; 2) Identification of the performance obligations; 3) Determination of the transaction price; 4) Allocation of the transaction price; and 5) Recognition of revenue.
The Company determined that its license agreements provide for three performance obligations which include: (i) the Grant of Use to its Patent Portfolio (“Grant of Use”), (ii) Stand-Ready Technical Support (“Technical Support”) including the transfer of trade secrets and other know-how, production of materials, scale-up support, analytical testing, etc., and (iii) access to new Intellectual Property (“IP”) that may be developed sometime during the course of the contract period (“New Improvements”). Given the nature of IP development, such New Improvements are on an unspecified basis and can occur and be made available to licensees at any time during the contract period.
When a contract includes more than one performance obligation, the Company needs to allocate the total consideration to each performance obligation based on its relative standalone selling price or estimate the standalone selling price if it is not observable. A standalone selling price is not available for our performance obligations since we do not sell any of the services separately and there is no competitor pricing that is available. As a consequence, the best method for determining standalone selling price of our Grant of Use performance obligation is through a comparison of the average royalty rate for comparable license agreements as compared to our license agreements. Comparable license agreements must consider several factors including: (i) the materials that are being licensed, (ii) the market application for the licensed materials, and (iii) the financial terms in the license agreements that can increase or decrease the risk/reward nature of the agreement.
Based on the royalty rate comparison referred to above, any pricing above and beyond the average royalty rate would relate to the Technical Support and New Improvements performance obligations. The Company focuses a significant portion of its time and resources to provide the Technical Support and New Improvements services to its licensees, which further supports the conclusions reached using the royalty rate analysis.
The Technical Support and New Improvements performance obligations are co-terminus over the term of the license agreement. For purposes of determining the transaction price, and recognizing revenue, the Company combined the Technical Support and New Improvements performance obligations because they have the same pattern of transfer and the same term. We maintain a staff of scientists and other professionals whose primary job responsibilities throughout the year are: (i) being available to respond to Technical Support needs of our licensees, and (ii) developing improvements to our technology which are offered to our licensees as New Improvements. Since the costs incurred to satisfy the Technical Support and New Improvements performance obligations are incurred evenly throughout the year, the value of the Technical Support and New Improvements services are recognized throughout the initial contract period as these performance obligations are satisfied. If the agreement is not terminated at the end of the initial contract period, it will renew on the same terms as the initial contract for a one-year period. Consequently, any fees or minimum annual royalty obligations relating to this renewal contract will be allocated similarly to the initial contract over the additional one-year period.
We recognize revenue when or as the performance obligations in the contract are satisfied. For performance obligations that are fulfilled at a point in time, revenue is recognized at the fulfillment of the performance obligation. Since the IP is determined to be a functional license, the value of the Grant of Use is recognized in the first period of the contract term in which the license agreement is in force. The value of the Technical Support and New Improvements obligations is allocated throughout the contract period based on the satisfaction of its performance obligations. If the agreement is not terminated at the end of the contract period, it will renew on the same terms as the original agreement for a one-year period. Consequently, any fees or minimum annual royalties (“MAR”) relating to this renewal contract will be allocated similarly over that additional year.
| F-8 |
The
Company’s license agreements have a variable royalty fee structure (meaning that royalties are a fixed percentage of sales that
vary from period to period) and frequently include a minimum annual royalty commitment. In instances when sales of licensed products
by its licensees exceed the MAR, the Company recognizes fee income as the amounts have been earned. Typically, the royalty rate for such
sales is
Because of the immediate recognition of the Grant of Use performance obligation: (i) the first period of the contract term will generally have a higher percent allocation of the transaction price under ASC 606 and (ii) the remaining periods will have less of the transaction price recognized under ASC 606. After the initial period in the contract term, the revenue for the remaining periods will be based on the satisfaction of the Technical Support and New Improvements obligations. Since most of our license agreements start as of January 1st, the revenue recognized for the contract under ASC 606 in our first quarter will tend to be higher subsequent quarters in the fiscal year.
Certain of the contract fees are accrued by, or paid to, the Company in advance of the period in which they are earned, resulting in deferred revenue. Such excess amounts are recorded as deferred revenue and are recognized as revenue in future periods as earned.
The Company operates in a single business segment which is engaged in the development and marketing of technology and devices to control the flow of light. Our revenue source comes from the licensing of this technology and all of these license agreements have similar terms and provisions. The majority of the Company’s licensing fee income comes from the activities of several licensees participating in the automotive market. The Company currently believes that the automotive market will be the largest source of its royalty income over the next several years. The Company’s royalty income from this market may be influenced by numerous factors including various trends affecting demand in the automotive industry and the rate of introduction of new technology in OEM product lines. In addition to these macro factors, the Company’s royalty income from the automotive market could also be influenced by specific factors such as whether the Company’s SPD-SmartGlass technology appears as standard equipment or as an option on a particular vehicle, the number of additional vehicle models that SPD-SmartGlass appears on, the size of each window on a vehicle and the number of windows on a vehicle that use SPD-SmartGlass, fluctuations in the total number of vehicles produced by a manufacturer, and in the percentage of cars within each model produced with SPD-SmartGlass, and changes in pricing or exchange rates.
The
Company has entered into a number of license agreements covering its light control technology. The Company received minimum annual
royalties under certain license agreements and recorded fee income based on ASC 606 revenue recognition each quarter. In instances
when sales of licensed products by its licensees exceed minimum annual royalties, the Company recognized additional fee income as
the amounts have been earned. Certain of the fees are accrued by, or paid to, the Company in advance of the period in which they are
earned, resulting in deferred revenue. Such excess amounts are recorded as deferred revenue and are typically recognized as fee
income when earned. As of December 31, 2025 and 2024, there was
Fee
income represents amounts earned by the Company under various license and other agreements relating to technology developed by the Company.
During 2025, five licensees accounted for
| F-9 |
Basic loss per share excludes any dilution. It is based upon the weighted average number of common shares outstanding during the period. Dilutive loss per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company’s dilutive loss per share equals basic loss per share for years ended December 31, 2025 and 2024, because all potentially dilutive securities (i.e., options and warrants) were antidilutive in those periods. The number of options and warrants that were not included because their effect is antidilutive was and for 2025 and 2024, respectively.
(g) Research and Development Costs
Research and development costs are charged to expense as incurred.
(h) Patent Costs
The Company expenses costs relating to the development or acquisition of patents due to the uncertainty of the recoverability of these items.
(i) Use of Estimates
The preparation of the Company’s consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during this period. Actual results could differ from those estimates.
(j) Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled.
In
accordance with ASC Topic 740, we recognize tax benefits only for tax positions that are more likely than not to be sustained upon examination
by tax authorities. The amount recognized is measured as the largest amount of benefit that is
The tax years subject to examination by major tax jurisdictions include the years 2022 and forward by the U.S. Internal Revenue Service and certain states. The Company is not currently being audited by any tax jurisdiction.
On
July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA includes provisions that restore
We recognize all stock-based compensation as an expense in the consolidated financial statements at the fair value of the award at the date of grant.
The exercise prices for stock options granted are generally set at the average for the high and low trading prices of the Company’s common stock on the trading date immediately prior to the date of grant, and the related numbers of shares granted are fixed at the date of grant.
| F-10 |
In order to determine the fair value of stock options on the date of grant, the Company uses the Black-Scholes option-pricing model. Inherent in this model are assumptions related to expected stock-price volatility, option term, risk-free interest rate and dividend yield. While the risk-free interest rate and dividend yield are less subjective assumptions that are based on factual data derived from public sources, the expected stock-price volatility and option term assumptions require a greater level of judgment.
In connection with employee, director and consultant stock options, the Company charged to compensation expense $ and $ during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, these awards were fully vested.
(l) Impairment of Long-Lived Assets
The
Company reviews long-lived assets to determine whether an event or change in circumstances indicates the carrying value of the asset
may not be recoverable. The Company bases its evaluation on such impairment indicators as the nature of the assets, the future economic
benefit of the assets and any historical or future profitability measurements, as well as other external market conditions or factors
that may be present. There was
(m) Fair Value Measurements
As of December 31, 2025 and 2024, the fair value of the Company’s financial assets and liabilities including cash and cash equivalents, royalties receivable, accounts payable approximated carrying value due to the short-term maturity of these instruments.
(n) Recent Accounting Pronouncements
New Accounting Standards
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes – Improvements to Income Tax Disclosures”. The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. We adopted this ASU on a prospective basis effective January 1, 2025. Refer to Note 6 for the inclusion of the new required disclosures.
In 2024, the Company adopted the provisions of ASU 2023-07, “Segment Reporting”. The standard requires public companies to provide enhanced disclosures regarding operating segments (Note 3).
| F-11 |
(3) Segment Information
The
Company operates as a single operating segment which is engaged in the development and marketing of technology and devices to control
the flow of light (as described in Note 1). The Company develops and licenses our patented suspended particle device (“SPD-Smart”)
light-control technology to other companies that manufacture and/or market the: (i) SPD-Smart chemical emulsion, (ii) light-control film
made from the chemical emulsion, (iii) the light-control panels made by laminating the film, (iv) electronics to power end-products incorporating
the film, or (v) lamination services for, and the end-products themselves such as “smart” windows, skylights and sunroofs.
The Company currently has numerous licensees that, in the aggregate, are licensed to primarily serve five major SPD-Smart application
areas (aerospace, architectural, automotive, marine and display products) in every country of the world. The Company derives revenue
from licensees in North America, Europe and Asia. The Company’s Chief Operating Decision Maker (CODM) reviews revenue and consolidated
net operating loss as a total and not by industry of licensees and the royalty rates that we charge our licensees are consistent when
measuring the Company’s profitability and allocating resources across geographical location and by industry. The Company does not
have intra-entity sales or transfers. The Company’s long-lived assets consist of property and equipment and operating lease right-of-use
assets, all of which are located in the United States. In 2025 and 2024, approximately
The accounting policies of the Company’s single operating segment are the same as those described in Note 2.
The CODM is the Company’s Chief Executive Officer and acting Chief Financial Officer. The CODM assesses performance for the single operating segment and decides how to allocate resources based on consolidated net operating loss that is also reported on the Company’s consolidated statements of operations.
Consolidated net operating loss is used by the Company’s CODM to monitor budget versus actual results; conducting this monitoring on at least a quarterly basis as a part of the Company’s quarterly 10-Q and annual 10-K filing processes. Included in the review process is a detailed review and discussion related to the Company’s Management’s Discussion and Analysis. In addition, meetings of the Company’s Audit Committee are also held at least quarterly and those meetings include a review of consolidated operating results.
The following table illustrates the information about the Company’s single reportable segment, which the Company’s CODM regularly evaluates in addition to the information already presented on the Company’s statements of operations and identifies expense items exceeding the Company’s significant expense thresholds described above:
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Operating Expenses: | ||||||||
| Employee compensation | ||||||||
| Professional fees | ||||||||
| Directors fees and expenses | ||||||||
| Marketing and investor relations | ||||||||
| Insurance** | ||||||||
| Occupancy costs | ||||||||
| Credit loss expense | ||||||||
| Film purchase | ||||||||
| Patent costs | ||||||||
| Stock listing fees | ||||||||
| Legal fees | ||||||||
| Depreciation and amortization | ||||||||
| Other operating expenses* | ||||||||
| Research and Development Expenses | ||||||||
| Employee compensation | ||||||||
| Insurance** | ||||||||
| Occupancy costs | ||||||||
| Depreciation and amortization | ||||||||
| Other research and development costs* | ||||||||
| Net Operating Loss | $ | $ | ||||||
| * |
| ** |
| F-12 |
(4) Fixed Assets
Fixed assets and their estimated useful lives as of December 31, 2025 and 2024 are as follows:
| 2025 | 2024 | Estimated useful life | ||||||||
| Equipment and furniture | $ | $ | ||||||||
| Trade show materials | ||||||||||
| Autos | ||||||||||
| Leasehold improvements | ||||||||||
| Less accumulated depreciation | ||||||||||
| and amortization | ( | ) | ( | ) | ||||||
| $ | $ | |||||||||
(5) Accrued Expenses and Other
Accrued expenses consist of the following at December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Payroll, bonuses and related benefits | $ | $ | ||||||
| Professional services | ||||||||
| Other | ||||||||
| $ | $ | |||||||
(6) Income Taxes
Since inception, the Company has incurred losses from operations and as a result has not recorded income tax expense. Benefits related to net operating loss carryforwards and deferred items have been fully reserved because it is not more likely than not that the Company will achieve profitable operations. The difference between the total income taxes at the federal statutory rate for each of the years ended December 31, 2025 and 2024 and the fact that income tax benefit was recorded in each of these years is attributable to the change in the valuation allowance recorded in each year.
| F-13 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at December 31, 2025 and 2024 are presented below:
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Depreciation | $ | $ | ||||||
| Allowance for credit losses | ||||||||
| Net operating loss carry-forwards | ||||||||
| Stock option expense | ||||||||
| Research and other credits | ||||||||
| Lease liability | ||||||||
| Amortization | ||||||||
| Other | ||||||||
| Total gross deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Lease liability | ||||||||
| Total gross deferred tax liabilities | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax | $ | $ | ||||||
Upon adoption of ASU 2023-09, Improvements in Income Tax Disclosures, as described in Note 2, the reconciliation of income taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 was as follows:
| 2025 | ||||||||
| Amount | Percent of Net Loss | |||||||
| Income tax provision at federal statutory rate | $ | ( | ) | ( | )% | |||
| Valuation allowance | % | |||||||
| $ | ||||||||
The reconciliation of income taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2024, in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:
| 2024 | ||||
| Income tax provision at federal statutory rate | $ | ( | ) | |
| Expired carryforwards and other | ||||
| Change in valuation allowance | ( | ) | ||
| $ | ||||
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future taxable income during the period in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon its historical operating losses, utilization of deferred tax assets cannot currently be determined. Accordingly, the Company has recorded a full valuation allowance against the deferred tax assets due to the uncertainty regarding the future utilization of the deferred tax assets for all periods presented.
At
December 31, 2025, the Company had net operating loss carryforwards for federal income tax purposes of approximately $
No cash was paid, in federal, state or foreign jurisdictions, for income taxes for the years ended December 31, 2025 and 2024.
| F-14 |
(7) Shareholders’ Equity
(a) Common Stock and Warrants
On
September 16, 2022, the Company entered into subscription agreements from a group of private accredited investors to sell them million
shares of common stock of the Company at a price of $ per share (which represents the closing market price of the Company’s
common stock on September 14, 2022 which was the date that the transaction was agreed to). As of December 31, 2022, the Company received
$
On February 18, 2026, the Company entered into subscription agreements from a group of private accredited investors, which included family members of a director of the Company, as well as the owner of a licensee of the Company licensed to produce SPD-SmartGlass products including for the retrofit architectural glass market.
The
investors purchased million shares of common stock of the Company at a price of $ per share (which represents the closing market
price of the Company’s common stock on February 13, 2026 which was the date that the transaction was agreed to). The Company received
$
The shares were issued to the investors in a private placement and, along with the shares issued in connection with the exercise of any warrants in the future, are not registered and therefore currently subject to at least a six-month holding period by the investor.
(b) Options and Warrants
(i) Employee Options
In 2019, the shareholders approved the Company’s 2019 Equity Incentive Plan, which provides for the granting of both incentive stock options at the fair market value at the date of grant and nonqualified stock options at the fair market value at the date of grant to employees or non-employees who, in the determination of the Board of Directors, have made or may make significant contributions to the Company in the future. The Company may also award stock appreciation rights, restricted stock, or restricted stock units under this plan. The Company initially reserved shares of its common stock for issuance under this plan, and at its annual shareholders’ meeting in June 2025, increased the number of shares reserved by to an aggregate of shares. As of December 31, 2025 approximately shares remain available to grant under this Plan.
At the discretion of the Board of Directors, options expire in or less from the date of grant and are generally fully exercisable upon grant but in some cases may be subject to vesting in the future. Full payment of the exercise price may be made in cash or in shares of common stock valued at the fair market value thereof on the date of exercise, or by agreeing with the Company to cancel a portion of the exercised options.
The Company granted fully vested stock options during 2025 and recorded share-based compensation to employees, directors and consultants of $.
| 2025 | 2024 | |||||||
| Fair value on grant date | $ | $ | ||||||
| Expected dividend yield | ||||||||
| Expected volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Expected term of the option | years | years | ||||||
| F-15 |
| Number of Shares | Weighted Average | Weighted Average Remaining | ||||||||||||||
| Subject to Option | Exercise Price | Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Balance at January 1, 2024 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Cancelled | ( | ) | ||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Balance at December 31, 2024 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Cancelled | ( | ) | ||||||||||||||
| Exercised | ||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ||||||||||||||
All options are exercisable at December 31, 2025.
(ii) Warrants and Non-Employee Options
Activity in warrants is summarized below:
| Number of Shares Underlying | Weighted Average | |||||||
| Warrants Granted | Exercise Price | |||||||
| Balance at January 1, 2024 | $ | |||||||
| Exercised | ||||||||
| Terminated | ( | ) | ||||||
| Issued | ||||||||
| Balance at December 31, 2024 | ||||||||
| Exercised | ||||||||
| Terminated | ||||||||
| Issued | ||||||||
| Balance at December 31, 2025 | $ | |||||||
There
are
Warrants generally expire in from the date of issuance. At December 31, 2025, all warrants and non-employee options outstanding were exercisable.
| F-16 |
(8) License and Other Agreements
The
Company has entered into a number of license agreements covering various products using the Company’s SPD technology. Some of these
license agreements are limited to specific countries and/or markets. Licensees of Research Frontiers who incorporate SPD technology into
end products pay Research Frontiers an earned royalty of
(9) Commitments
The
Company has an employment agreement with its chief executive officer which provides for an annual base salary of $
The Company has a defined contribution profit sharing (401k) plan covering employees who have completed one year of service. Contributions are made at the discretion of the Company. The Company did not make any contributions to this plan for 2025 or 2024.
The Company determines if an arrangement is a lease at its inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration. Control of an underlying asset is conveyed if the Company obtains the rights to direct the use of, and to obtain substantially all of the economic benefits from the use of, the underlying asset. Lease expense for variable leases and short-term leases is recognized when the obligation is incurred.
The
Company has an operating lease for its facility, with a remaining lease term of
| F-17 |
Maturities of operating lease liabilities as of December 31, 2025 were as follows:
| December 31, 2025 | ||||
| Year 1 | $ | |||
| Years 2-3 | ||||
| Years 4-5 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: Imputed lease interest | ( | ) | ||
| Present value of lease liabilities | ||||
| Less: Current portion of operating lease liability | ( | ) | ||
| Operating lease liability, net of current portion | $ | |||
(10) Rights Plan
In February 2013, the Company’s Board of Directors adopted a Stockholders’ Rights Plan (the “Rights Plan”) and declared a dividend distribution of one right (a “Right”) for each outstanding share of Company common stock to stockholders of record at the close of business on March 3, 2003 (“Record Time”) and authorized the issuance of one Right in respect of each share of Common Stock issued after the Record Time and prior to the Separation Time. The Rights Plan was readopted and extended in December 2022 until February 11, 2033.
“Separation Time” shall mean the earlier of the Close of Business on the tenth Business Day (or such later date as the Board of Directors may from time to time fix by resolution adopted prior to the Separation Time that otherwise would have occurred) following but not including (i) the date on which any Person commences a tender or exchange offer that, if consummated, would result in such Person’s becoming an Acquiring Person, and (ii) the date of the first event causing a Flip-in Date to occur; provided that if any tender or exchange offer referred to in clause (i) of this paragraph is cancelled, terminated or otherwise withdrawn prior to the Separation Time without the purchase of any shares of Common Stock pursuant thereto, such offer shall be deemed, for purposes of this paragraph, never to have been made.
Subject
to certain exceptions listed in the Rights Plan, if a person or group has acquired beneficial ownership of, or commences a tender or
exchange offer for,
The above description highlights some of the features of the Company’s Rights Plan and is not a complete description of the Rights Plan. A more detailed description and copy of the Rights Plan has been filed with the SEC and is available from the Company upon request.
(11) Related Party
Effective
June 4, 2023, the Chairman and CEO of Gauzy, Ltd. one of the Company’s licensees, joined the Board of the Company. Gauzy’s
license agreement has been in effect since September 17, 2017 and provides for minimum annual royalties and earned royalties relating
to sales of SPD-SmartGlass architectural window products. Because the Company collects a
On March 14, 2019, the Company suspended its VariGuard SmartGlass business unit activities. Instead, the Company licensed a new entity to pursue the business opportunities previously pursued by the Company’s VariGuard SmartGlass business unit. This new licensee continues to use the VariGuard SmartGlass name. In addition to other employees at VariGuard SmartGlass Inc., two of the Company’s former officers (Michael R. LaPointe and Seth L. Van Voorhees) are shareholders of VariGuard SmartGlass Inc. and, as consequence, this transaction is a related party relationship which has been reviewed and approved by the Company’s Board of Directors pursuant to the requirements of Delaware corporate law and the Company’s Code of Ethics. In October 2021, the Company entered into an amendment to the license agreement with VariGuard modifying its scope and terms. As of December 31, 2025, VariGuard is no longer a related party to the Company.
(12) Other Income
During
the years ended December 31, 2025 and 2024, the Company received $
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