RESEARCH FRONTIERS INC Segments Disclosure

(3) Segment Information

 

The Company operates as a single1 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 80% and 70%, respectively, of the Company’s revenue was generated from sources outside of the United States.

 

The accounting policies of the Company’s single1 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 single1 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:

 Schedule of Segment Information Related to Statement of Operations

		2025				2024
		Year ended December 31,
		2025				2024
Revenue		$	1,121,248			$	1,335,531
Operating Expenses:
Employee compensation			1,118,934				1,056,190
Professional fees			269,789				232,439
Directors fees and expenses			338,272				176,340
Marketing and investor relations			235,195				167,639
Insurance**			164,023				191,852
Occupancy costs			82,121				67,366
Credit loss expense			154,253				25,001
Film purchase			39,975				-
Patent costs			73,132				83,771
Stock listing fees			70,000				65,500
Legal fees			18,460				46,324
Depreciation and amortization			11,478				14,978
Other operating expenses*			69,052				79,997
Operating expenses			2,644,684				2,207,397
Research and Development Expenses
Employee compensation			165,943				154,282
Insurance**			162,436				187,245
Occupancy costs			249,087				202,098
Depreciation and amortization			908				11,191
Other research and development costs*			30,358				15,191
Research and development expenses			608,732				570,007
Net Operating Loss		$	2,132,168			$	1,441,873

 

*	Other operating expenses and other research and development expenses consist principally of miscellaneous expenses, each of which is under the Company’s threshold to be separately presented as a significant expense.

 

**	Insurance includes all coverage including property, liability, directors and officers and employee medical.