RESEARCH FRONTIERS INC
For the period ended Mar 31, 2025. Filed May 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
REFR$0.37-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001493152-24-044002
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001641172-25-009244
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 36 previous paragraphs and 25 current paragraphs.
9 unchanged; 15 reworded; 1 added; 7 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
Critical Accounting Policies and Estimates
Removed paragraphs (7)
Previous report
Critical Accounting Policies
Previous report
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.
Previous report
On occasion, the Company may issue to consultants either options or warrants to purchase shares of common stock of the Company at specified share prices. These options or warrants may vest based upon specific services being performed or performance criteria being met. In accounting for equity instruments that are issued to other than employees for acquiring, or in conjunction with selling, goods or services, the Company is required to record consulting expenses based upon the fair value of such options or warrants on the earlier of the service period or the period that such options or warrants vest as determined using a Black-Scholes option pricing model and are marked to market quarterly using the Black-Scholes option valuation model.
Previous report
Because the Company’s license agreements typically provide for the payment of royalties by a licensee on product sales within 45 days after the end of the quarter in which a sale of a licensed product occurs (with some of the Company’s more recent license agreements providing for payments on a monthly basis), and because of the time period which typically will elapse between a customer order and the sale of the licensed product and installation in a home, office building, automobile, aircraft, boat or any other product, there could be a delay between when economic activity between a licensee and its customer occurs and when the Company gets paid its royalty resulting from such activity.
Previous report
Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Previous report
Operating expenses decreased by $129,977 for the nine months ended September 30, 2024 to $1,565,152 from $1,695,129 for the nine months ended September 30, 2023. This decrease is the result of lower credit loss expense ($70,000) as well as lower investor relations and marketing costs ($47,000), lower payroll and related costs ($13,000) as well as lower patent costs ($24,000), partially offset by higher foreign withholding tax expenses ($24,000).
Previous report
Research and development expenditures decreased by $20,333 to $409,817 for the nine months ended September 30, 2024 from $430,150 for the nine months ended September 30, 2023. This decrease is a result of lower allocated insurance costs ($11,000), lower allocated facility costs ($6,000), as well as lower equipment rental costs ($4,000).
Reworded paragraphs (15)
Previous wording
The following accounting policies 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 December 31, 2023 consolidated financial statements, “Summary of Significant Accounting Policies.”
Current wording
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.
Previous wording
The preparation of condensed consolidated financial statements in conformity with GAAP 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.
Current 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.
Previous wording
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. 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.
Current wording
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.
Previous wording
Royalty receivables are stated less allowance for credit loss. 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 uncollectible accounts when necessary.
Current wording
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.
Previous wording
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 produced with SPD-SmartGlass, and changes in pricing or exchange rates.
Current wording
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 new car models 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, 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.
Previous wording
The Company has received royalty revenues from sales of products using the Company’s technology 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.
Current wording
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.
Previous wording
The Company’s fee income from licensing activities for the three months ended September 30, 2024 was $354,408 as compared to $164,146 for the three months ended September 30, 2023. This increase in fee income of $190,262 (116%) was primarily the result of higher royalties from the automotive and aircraft markets as compared to the third quarter of 2023. The Company expects revenue in all market segments to increase further 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 three months ended March 31, 2025 was $559,776 as compared to $313,378 for the three months ended March 31, 2024. This increase in fee income of $246,398 (79%) was primarily the result of higher royalties from the automotive market as compared to the first quarter of 2024. The Company expects revenue in all market segments to increase further 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 $87,769 for the three months ended September 30, 2024 to $454,866 from $542,635 for the three months ended September 30, 2023. This decrease is the result of lower credit loss expense ($75,000), as well as lower marketing and investor relations costs ($22,000), lower patent costs ($21,000) and lower allocated insurance costs ($5,000), partially offset by higher payroll and related costs ($30,000).
Current wording
Operating expenses increased by $3,089 for the three months ended March 31, 2025 to $636,476 from $633,387 for the three months ended March 31, 2024. This increase is the result of higher payroll costs ($40,000) as well as higher allocated occupancy costs ($8,000) partially offset by lower marketing and investor relations costs ($20,000), lower patent costs ($8,000) and lower allocated insurance costs ($8,000).
Previous wording
Research and development expenditures decreased by $4,073 to $131,246 for the three months ended September 30, 2024 from $135,319 for the three months ended September 30, 2023. This decrease is primarily a result of lower allocated insurance costs ($5,000).
Current wording
Research and development expenditures increased by $13,136 to $162,877 for the three months ended March 31, 2025 from $149,741 for the three months ended March 31, 2024. This increase is primarily a result of higher allocated occupancy costs ($18,000) partially offset by lower allocated insurance costs ($6,000).
Previous wording
The Company’s net investment income, consisting of interest income, for the three months ended September 30, 2024 was $29,736 as compared to income of $41,642 for the three months ended September 30, 2023 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 March 31, 2025 was $14,533 as compared to income of $27,146 for the three months ended March 31, 2024 with the change due to lower cash balances available for investment.
Previous wording
The Company recorded $35,152 of other income for the three months ended September 30, 2024 relating to an Employee Retention Credit, a refundable tax credit available under the Coronavirus Aid, Relief, and Economic Securities Act (“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 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.
Previous wording
As a consequence of the factors discussed above, the Company’s net loss was $166,816 ($0.00 per common share) for the three months ended September 30, 2024 as compared to net loss of $472,166 ($0.01 per common share) for the three months ended September 30, 2023.
Current wording
As a consequence of the factors discussed above, the Company’s net loss was $177,687 ($0.01 per common share) for the three months ended March 31, 2025 as compared to net loss of $442,604 ($0.01 per common share) for the three months ended March 31, 2024.
Previous wording
During the nine months ended September 30, 2024, the Company’s cash and cash equivalents balance decreased by $827,971 as a result of cash used to fund operations of $835,899 partially offset by cash generated from the exercise options of $8,670. As of September 30, 2024, the Company had cash and cash equivalents of approximately $1.6 million, working capital of $2.7 million and total shareholders’ equity of $2.8 million.
Current wording
During the three months ended March 31, 2025, the Company’s cash and cash equivalents balance decreased by $641,381 as a result of cash used to fund operations of $641,271 and cash used to purchase fixed assets of $110. As of March 31, 2025, the Company had cash and cash equivalents of approximately $1.4 million, working capital of $2.3 million and total shareholders’ equity of $2.4 million.
Previous wording
Our quarterly projected cash flow shortfall, based on our current operations, adjusted for any non-recurring cash expenses for the next 12 months and adjusted for additional royalties expected to be received for use of our products in new production, for the next 12 months, is approximately $200,000 to $250,000 per quarter. We may eliminate some operating expenses in the future, which will further reduce our cash flow shortfall if needed. Based on these assumptions, we currently expect to have sufficient working capital for more than the next five years of operations.
Current wording
We currently expect to have sufficient working capital for more than the next five years of operations.
Previous wording
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 next five years. 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. 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. To date, the Company has not generated sufficient revenue from its licensees to fully fund its operations.
Current wording
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 next five years. 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. 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.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
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, 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.
Previous report — wording carried elsewhere
The Company’s fee income from licensing activities for the nine months ended September 30, 2024 was $1,157,380 as compared to $597,362 for the nine months ended September 30, 2023. This increase in fee income of $560,018 (94%) was the result of higher royalties from the automotive, aircraft and architectural markets as compared to the first nine months of 2023. The Company expects revenue in all market segments to increase further as new car models and other products using the Company’s SPD-SmartGlass technology are introduced into the market.
Previous report — wording carried elsewhere
The Company’s net investment income, consisting of interest income, for the nine months ended September 30, 2024 was $78,995 as compared to income of $99,463 for the nine months ended September 30, 2023 with the change due to lower cash balances available for investment.
Previous report — wording carried elsewhere
The Company recorded $35,152 of other income for the nine months ended September 30, 2024 relating to an Employee Retention Credit, a refundable tax credit available under the Coronavirus Aid, Relief, and Economic Securities Act (“CARES Act”) that was designed to keep employees on the payroll during the COVID-19 pandemic.
Previous report — wording carried elsewhere
As a consequence of the factors discussed above, the Company’s net loss was $703,442 ($0.02 per common share) for the nine months ended September 30, 2024 as compared to net loss of $1,428,454 ($0.04 per common share) for the nine months ended September 30, 2023.