RESEARCH FRONTIERS INC

Previous wording

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.

Current wording

The preparation of condensed consolidated 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 condensed consolidated financial statements, and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

Previous wording

Research and development expenditures decreased by $17,527 to $145,350 for the three months ended March 31, 2026 from $162,877 for the three months ended March 31, 2025. This decrease is primarily a result of lower allocated insurance costs ($10,000) as well as lower allocated occupancy costs ($6,000).

Current wording

Research and development expenditures decreased by $40,202 to $128,884 for the three months ended June 30, 2026 from $169,086 for the three months ended June 30, 2025. This decrease is primarily a result of lower allocated insurance costs ($14,000), lower employee compensation costs ($9,000), as well as lower allocated occupancy costs ($3,000) and lower other research and development costs ($14,000).

Previous wording

The Company’s net investment income, consisting of interest income, for the three months ended March 31, 2026 was $5,048 as compared to income of $14,533 for the three months ended March 31, 2025 with the change due to lower cash balances available for investment.

Current wording

The Company’s net investment income, consisting of interest income, for the three months ended June 30, 2026 was $9,586 as compared to income of $11,278 for the three months ended June 30, 2025 with the change due to lower cash balances available for investment.

Previous wording

As a consequence of the factors discussed above, the Company’s net loss was $525,365 ($0.02 per common share) for the three months ended March 31, 2026 as compared to net loss of $177,687 ($0.01 per common share) for the three months ended March 31, 2025.

Current wording

As a consequence of the factors discussed above, the Company’s net loss was $660,168 ($0.02 per common share) for the three months ended June 30, 2026 as compared to net loss of $803,826 ($0.02 per common share) for the three months ended June 30, 2025.

Previous wording

The Company’s fee income from licensing activities for the three months ended March 31, 2026 was $136,319 as compared to $559,776 for the three months ended March 31, 2025. This decrease in fee income was primarily the result of royalties and upfront fees recognized by the Company under ASC 606 revenue treatment from a new license agreement entered into in the first quarter of 2025 that did not recur in the first quarter of 2026. 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.

Current wording

The Company’s fee income from licensing activities for the six months ended June 30, 2026 was $222,665 as compared to $689,680 for the six months ended June 30, 2025. This decrease in fee income was primarily the result of royalties and upfront fees recognized by the Company under ASC 606 revenue treatment from a new license agreement entered into in the first six months of 2025, non-recurring royalties from two licensees that ceased operations in the first and second quarter of 2025, and what we believe to be a temporary slow-down due to non-technical issues by our licensee, Gauzy Ltd. in the production of SPD emulsion and film and other business activities, offset by higher royalties relating to the motorcycle helmet and ski/snow goggle market. 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.

Previous wording

Operating expenses decreased by $115,094 for the three months ended March 31, 2026 to $521,382 from $636,476 for the three months ended March 31, 2025. This decrease is primarily the result of lower directors fees ($120,000).

Current wording

Operating expenses decreased by $263,800 for the six months ended June 30, 2026 to $1,148,598 from $1,412,398 for the six months ended June 30, 2025. This decrease is the result of lower directors’ fees and expenses ($227,000) and lower employee compensation ($138,000), partially offset by higher legal fees ($95,000) and higher credit losses $26,000).

Previous wording

The Company recorded $47,357 of other income for the three months ended March 31, 2025 relating to an Employee Retention Credit, a refundable tax credit available under the CARES Act that was designed to keep employees on the payroll during the Covid-19 pandemic.

Current wording

The Company recorded $47,357 of other income for the six months ended June 30, 2025 relating to an Employee Retention Credit, a refundable tax credit available under the CARES Act that was designed to keep employees on the payroll during the COVID-19 pandemic.

Previous wording

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.

Current wording

On February 18, 2026, the Company entered into subscription agreements from a group of privately 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.

Previous wording

During the three months ended March 31, 2026, the Company’s cash and cash equivalents balance increased by $615,002 as a result of cash received from the sale of common stock and warrants of $1,375,000 partially offset by used to fund operations of $759,931 and cash used to purchase fixed assets of $67. As of March 31, 2026, the Company had cash and cash equivalents of approximately $1.3 million, working capital of $1.7 million and total shareholders’ equity of $1.8 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.

Current wording

During the six months ended June 30, 2026, the Company’s cash and cash equivalents balance increased by $423,657 as a result of cash received from the sale of common stock and warrants of $1,375,000 partially offset by cash used to fund operations of $951,238 and cash used to purchase fixed assets of $105. As of June 30, 2026, the Company had cash and cash equivalents of approximately $1.1 million, working capital of $1.0 million and total shareholders’ equity of $1.1 million. Based upon the Company’s current working capital, recurring losses and negative cash flow from operations, if the Company is unable to generate sufficient cash from operating activities, collect amounts owed to it by third parties, or raise additional funds for a period of 12 months from the issuance of these condensed consolidated financial statements, this raises substantial doubt about the Company’s ability to continue as a going concern. To alleviate this substantial doubt, the Company expects to generate sufficient cash flow from operations through increased use of its SPD Technology by existing licensees, through the Company entering into new license agreements, as well as through the collection of amounts owed to it, and, as a result, the Company does not expect that it will need to raise additional capital over the next 12 months. There is no assurance that the Company’s plans will be successful. The accompanying condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern and do not include any adjustments that might result from these uncertainties.