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Item 9A. Controls and Procedures

2022-03-09 compared with 2021-03-11 · 751 added, 764 removed, 276 unchanged (85% of the section changed)

1 unchanged sentence

Regarding the Effectiveness of Disclosure Controls and Procedures

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, 2020 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

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

Our Chief Executive Officer and acting interim Chief Financial Officer has concluded that as of December 31, 2021 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.

of Material Weakness in Internal Control Over Financial Reporting

previously disclosed, the Company’s management, including its Chief Executive Officer and Acting Interim Chief Financial Officer

identified a material weakness in the Company’s internal control over financial reporting during the three months ended June 30,

2021 and the three months ended September 30, 2021.

The Company’s controls over proper classification of cash and cash equivalents

failed to operate during those two quarters and the Company failed to properly account for investments that were not eligible for classification

as cash equivalents.

The misclassification was identified by management during procedures related to the year ending December 31, 2021.

As a result, the Company filed restatements of its quarterly reports on Form 10-Q for each of the Quarters ended June 30, 2021 and September

address the material weakness described above, the Company has expanded its quarterly controls to include procedures around cash equivalents

that are consistent with its year end procedures.

The enhanced controls were implemented immediately upon identification of the material

weakness and the Company’s management, including its Chief Executive Officer and Acting Interim Chief Financial Officer, determined

that we fully remediated the material weakness as of December 31, 2021.

We will continue to monitor the effectiveness of these controls

and will make any further changes management determines necessary.

Annual Report on Internal Control over Financial Reporting

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

Based on the evaluation of our disclosure controls and procedures as of December 31, 2020, our Chief Executive Officer

and acting interim Chief Financial Officer concluded that, as of such date, our internal control over financial reporting was

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, 2021, our Chief Executive Officer and Acting Interim Chief Financial Officer concluded

that, as of such date, our internal control over financial reporting was effective.

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.

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.

in Internal Control Over Financial Reporting

were no changes to controls during the three months ended December 31, 2020 that have materially affected or are reasonably

likely to materially affect our internal control over financial reporting.

than the remediation of the material weakness described above, there

were no changes to controls during the three months ended December 31, 2021 that have materially affected or are reasonably likely to

materially affect our internal control over financial reporting.

EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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.

of Ethics was adopted by the entire Board of Directors of the Company, including all of its Audit Committee members, in March

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

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.

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, 2021.

information required by this Item 11 is incorporated by reference to the Company’s definitive Proxy Statement to be filed

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

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.

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, 2022.

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.

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, 2022.

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.

OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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, 2021.

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, 2022.

RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

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, 2021.

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, 2022.

ACCOUNTANT FEES AND SERVICES

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, 2021.

independent registered public accounting firm is CohnReznick LLP, Melville, NY, Auditor Firm ID No:

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, 2022.

FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

and (2) Financial Statements and Financial Statement Schedules

following consolidated financial statements of Research Frontiers Incorporated are filed under “Item 8.

Financial Statements

and Supplemental Data”

of this Report.

Report of Independent Registered Public Accounting Firm

following consolidated financial statements of Research Frontiers Incorporated are filed under “Item 8.

Financial Statements and

Supplemental Data” of this Report.

of Independent Registered Public Accounting Firm (PCAOB ID 596 )

Financial Statements:

Consolidated Balance Sheets, December 31, 2020 and 2019

Consolidated Statements of Operations, Years ended December 31, 2020 and 2019

Consolidated Statements of Shareholders’

Equity, Years ended December 31, 2020 and 2019

Consolidated Statements of Cash Flows, Years ended December 31, 2020 and 2019

Notes to Consolidated Financial Statements

Balance Sheets, December 31, 2021 and 2020

Statements of Operations, Years ended December 31, 2021 and 2020

Statements of Shareholders’ Equity, Years ended December 31, 2021 and 2020

Statements of Cash Flows, Years ended December 31, 2021 and 2020

to Consolidated Financial Statements

other schedules have been omitted because they are not applicable, or not required, or the required information is disclosed elsewhere

1 unchanged sentence

Certificate of Incorporation of the Company.

Previously filed as Exhibit 3.1 to the Company’s Quarterly Report on Form

10-Q for the fiscal quarter ended June 30, 1994, and incorporated herein by reference.

Previously filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q

for the fiscal quarter ended June 30, 1994, and incorporated herein by reference.

Amended and Restated Bylaws of the Company.

Previously filed as Exhibit 99.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and incorporated herein by reference.

of Common Stock Certificate.

Previously filed as an Exhibit to the Company’s Registration Statement on Form S-18 (Reg.

33-5573NY), declared effective by the Commission on July 8, 1986, and incorporated herein by reference.

Rights Agreement dated as of February 18, 2003 between Research Frontiers Incorporated and Continental Stock Transfer & Trust Company, as Rights Agent, which includes as Exhibit A thereto the Form of Rights Certificate.

Previously filed as an Exhibit to the Company’s Registration Statement on Form 8-A dated February 13, 2013, and incorporated herein by reference.

Employment Agreement effective as of January 1, 2009 between the Company and Joseph M.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated April 30, 2009 and incorporated herein by reference.

Amendment to Employment Agreement effective as of June 12, 2014 between the Company and Joseph M.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated June 13, 2014 and incorporated herein by reference.

Amendment to Employment Agreement effective as of September 26, 2019 between the Company and Joseph M.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated September 26, 2019 and incorporated herein by reference.

Employment Agreement effective as of January 1, 2014 between the Company and Seth L.

Van Voorhees Previously filed as an Exhibit to the Company’s Current Report on Form 10-K dated December 31, 2013 and incorporated herein by reference.

and Restated 1992 Stock Option Plan.

Previously filed as Exhibit 4 to the Company’s Registration Statement on Form S-8

Previously filed as Exhibit 4 to the Company’s Registration Statement on Form S-8 (Reg.

33-86910) filed with the Commission on November 30, 1994, and incorporated herein by reference.

1998 Stock Option Plan, as amended.

Previously filed as an Exhibit to the Company’s Definitive Proxy Statement dated April 30, 1998 filed with the Commission on April 29, 1998, 1994, and incorporated herein by reference.

2008 Equity Incentive Plan.

Previously filed as an Exhibit to the Company’s Definitive Proxy Statement dated April 30, 2008 filed with the Commission on April 29, 2008, and incorporated herein by reference.

2019 Equity Incentive Plan.

Previously filed as an Exhibit to the Company’s Definitive Proxy Statement dated April 29, 2019 filed with the Commission on April 29, 2019, and incorporated herein by reference.

of Stock Option Agreement between the Company and recipients of stock options issued pursuant to the Company’s Stock

Option Plans.

Previously filed as part of Exhibits 4.1, 4.2, and 4.3 to the Company’s Registration Statement on Form

Previously filed as an Exhibit to the Company’s Definitive Proxy Statement dated April 29, 2019 filed with the Commission on April 29, 2019, and incorporated herein by reference.

of Stock Option Agreement between the Company and recipients of stock options issued pursuant to the Company’s Stock Option

Previously filed as part of Exhibits 4.1, 4.2, and 4.3 to the Company’s Registration Statement on Form S-8 (Reg.

33-53030) filed with the Commission on October 6, 1992, and incorporated herein by reference.

Agreement dated November 7, 1986, between the Company and Industrial & Research Associates Co.

Previously filed as an

exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1986 and incorporated herein

by reference.

Previously filed as an exhibit

to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1986 and incorporated herein by reference.

Amendment to Lease dated November 26, 1991 between the Company and Industrial and Research Associates Co.

Previously filed

as an Exhibit to Amendment No.

1 to the Company’s Registration Statement on Form S-1 (Reg.

33-43768) declared effective

by the Commission on December 17, 1991, and incorporated herein by reference.

Previously filed as an

Exhibit to Amendment No.

1 to the Company’s Registration Statement on Form S-1 (Reg.

33-43768) declared effective by the

Commission on December 17, 1991, and incorporated herein by reference.

Amendment to Lease dated March 11, 1994 between the Company and Industrial and Research Associates Co.

Previously filed as

an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 and incorporated

herein by reference.

Previously filed as an exhibit

to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 and incorporated herein by reference.

Third Amendment to Lease dated July 14, 1998 between the Company and Industrial and Research Associates Co.

Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 and incorporated herein by reference.

Fourth Amendment to Lease dated January 13, 2004 between the Company and Industrial and Research Associates Co.

Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and incorporated herein by reference.

Fifth Amendment to Lease dated February 21, 2014 between the Company and CLK-HP 230-240 CROSSWAYS PARK LLC and LAKE PARK 230-240 CROSSWAYS PARK LLC.

Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and incorporated herein by reference.

Agreement effective as of August 2, 1995 between the Company and General Electric Company.

Previously filed as an Exhibit

to the Company’s Current Report on Form 8-K dated August 2, 1995 with portions omitted pursuant to the Registrant’s

request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein

by reference.

Previously filed as an Exhibit to the

Company’s Current Report on Form 8-K dated August 2, 1995 with portions omitted pursuant to the Registrant’s request

for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of April 29, 1996 between the Company and Glaverbel, S.A.

Previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1996 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of January 18, 1997 between the Company and Material Sciences Corporation.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated March 3, 1997 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of March 31, 1997 between the Company and Hankuk Glass Industries, Inc.

Previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1997 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of August 8, 1997 between the Company and Orcolite, a Unit of Monsanto Company.

License Agreement effective as of June 25, 1999 between the Company and Dainippon Ink and Chemicals, Incorporated.

Previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1999 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of August 9, 1999 between the Company and Hitachi Chemical Co., Ltd.

Previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1999 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of December 3, 1999 between the Company and Global Mirror GmbH & Co.

Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of December 13, 1999 between the Company and Global Mirror GmbH & Co.

License Agreement effective as of March 21, 2000 between the Company and ThermoView Industries, Inc.

License Agreement effective as of May 23, 2000 between the Company and Polaroid Corporation.

Previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2000 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of February 16, 2001 between the Company and AP Technoglass Co.

Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of March 21, 2001 between the Company and InspecTech Aero Service, Inc.

License Agreement effective as of March 28, 2001 between the Company and Film Technologies International, Inc.

License Agreement effective as of November 29, 2001 between the Company and Avery Dennison Corporation.

License Agreement effective as of February 4, 2002 between the Company and BOS GmbH & Co.

License Agreement effective as of March 11, 2002 between the Company and Isoclima S.p.A.

License Agreement effective as of July 2, 2002 between the Company and Isoclima S.p.A.

Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of August 19, 2002 between the Company and Razor’s Edge Technologies, Inc.

License Agreement effective as of October 7, 2002 between the Company and American Glass Products (Glass Technology Investment Ltd.).

License Agreement effective as of October 7, 2002 between the Company and SPD Systems, Inc.

License Agreement effective as of October 24, 2002 between the Company and Cricursa Cristales Curvados S.A.

License Agreement effective as of October 24, 2002 between the Company and CricursaCristalesCurvados S.A.

License Agreement effective as of December 9, 2002 between the Company and BRG Group, Ltd.

License Agreement effective as of December 13, 2002 between the Company and Laminated Technologies Inc.

License Agreement effective as of April 17, 2003 between the Company and Custom Glass Corporation.

Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2003 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of May 2, 2003 between the Company and Air Products and Chemicals, Inc.

License Agreement effective as of May 30, 2003 between the Company and Kerros Limited.

License Agreement effective as of June 6, 2003 between the Company and Traco, Inc.

License Agreement effective as of June 16, 2003 between the Company and Saint-Gobain Glass France S.A.

License Agreement effective as of August 1, 2003 between the Company and Vision (Environmental Innovation) Limited.

License Agreement effective as of November 13, 2003 between the Company and Innovative Glass Corporation.

License Agreement effective as of December 11, 2003 between the Company and Leminur Limited.

License Agreement effective as of March 25, 2004 between the Company and Pilkington plc.

Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of April 5, 2004 between the Company and SmartGlass Ireland Ltd.

License Agreement effective as of April 8, 2004 between the Company and Prelco Inc.

License Agreement effective as of April 13, 2004 between the Company and E.

Dupont De Nemours and Company.

License Agreement effective as of September 3, 2004 between the Company and Nippon Sheet Glass Co., Ltd.

License Agreement effective as of October 25, 2005 between the Company and SPD Control Systems Corporation.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated October 31, 2005 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of March 30, 2006 between the Company and Dainippon Ink and Chemicals.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated April 4, 2006 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of May 11, 2006 between the Company and Asahi Glass Company.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated May 15, 2006 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of March 19, 2007 between the Company and SmartGlass International Ltd.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated March 19, 2007 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of October 16, 2007 between Research Frontiers Incorporated and Glass Wholesalers, Ltd.

d/b/a Craftsman Fabricated Glass, Ltd.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated October 18, 2007 and incorporated herein by reference.

License Agreement effective as of December 14, 2007 between Research Frontiers Incorporated and AGC Flat Glass Europe SA.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated December 17, 2007 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of February 21, 2008 between Research Frontiers Incorporated and GKN Aerospace Transparency Systems Inc.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated March 5, 2008 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of September 29, 2008 between Research Frontiers Incorporated and PPG Industries, Inc.

(now known as Pittsburgh Glass Works, LLC).

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated October 6, 2008 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of September 10, 2009 between Research Frontiers Incorporated and Pilkington Group Ltd.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated September 15, 2009 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of January 25, 2010 between Research Frontiers Incorporated and Vision Systems.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated January 25, 2010 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of February 8, 2010 between Research Frontiers Incorporated and ID Research Pty Ltd.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated February 16, 2010 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of December 13, 2010 between Research Frontiers Incorporated and Diamond Sea-Glaze Manufacturing Ltd.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated December 14, 2010 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of December 22, 2010 between Daimler AG, Research Frontiers Incorporated and SPD Control Systems Corp.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated February 9, 2011 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of February 19, 2013 between Tint-It JSC and Research Frontiers Incorporated.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated March 5, 2013 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

License Agreement effective as of August 6, 2012 between Advnanotech LLC and Research Frontiers Incorporated.

Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated March 12, 2013 with portions omitted pursuant to the Registrant’s request for confidential treatment and filed separately with the Securities and Exchange Commission and incorporated herein by reference.

Code of Ethics of Research Frontiers Incorporated.

Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and incorporated herein by reference.

Subsidiaries of the Registrant - SPD Enterprises, Inc.

Consent of CohnReznick LLP - Filed herewith.

Rule 13a-14(a)/15d-14(a) Certification of Joseph M.

Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and incorporated herein by reference.

Subsidiary of the Registrant - SPD Enterprises, Inc.

of CohnReznick LLP - Filed herewith.

13a-14(a)/15d-14(a) Certification of Joseph M.

Harary - Filed herewith.

Section 1350 Certification of Joseph M.

1350 Certification of Joseph M.

Harary - Filed herewith.

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Executive Compensation Plan or Arrangement.

Form 10-K Summary

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.

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.

FRONTIERS INCORPORATED

Harary, President, CEO and Acting Interim CFO

Executive Officer and Principal Financial Officer)

Executive Officer and Principal Financial and Accounting Officer)

March 9, 2022

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:

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:

Darryl Daigle

2 unchanged sentences

William Graham Settle

of Independent Registered Public Accounting Firm

2 unchanged sentences

on the Financial Statements

have audited the accompanying balance sheets of Research Frontiers Incorporated (the “Company”) as of December 31,

2020 and December 31, 2019, and the related statements of operations, shareholders’

equity and cash flows for each of the

years in the two-year period ended December 31, 2020, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position

of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in

the two-year period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s 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.

have audited the accompanying consolidated balance sheets of Research Frontiers Incorporated (the “Company”) as of

December 31, 2021 and 2020, and the related consolidated statements of operations, shareholders’ equity and cash flows for

each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year

period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

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.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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 financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

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 Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

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 report, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the 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 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 financial statements.

We believe that our audits provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was

communicated or required to be communicated to the audit committee and that:

(i) related to accounts or disclosures that are material

to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication

of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not,

by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts

or disclosures to which they relate.

described in Note 1 to the financial statements, the Company has incurred recurring losses since inception and expects to continue

to incur losses as a result of costs and expenses related to its research and continued development of its technology.

has funded most of its activities through sales of its common stock to investors, and upon the exercise of options and warrants.

The Company’s projected cash flow shortfall based on its current operations adjusted for any non-recurring cash expenses

for the next 12 months, is approximately $400,000-$450,000 per quarter.

Based on the Company’s current expectations of its

cash flow, the Company’s working capital would support the Company’s activities for approximately 33 months subsequent

to December 31, 2020.

Management performs a liquidity analysis quarterly to determine the Company’s ability to continue

as a going concern.

The determination of the projected cash flow shortfall required management to make assumptions and estimates

about the future undiscounted cashflows associated with operations.

principal considerations for our determination that performing procedures relating to the liquidity analysis of the Company is

a critical audit matter, is the significant judgment required of management when determining the projected cash flow shortfall,

which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s

significant assumptions related to projected operating results.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the

financial statements.

The procedures include, among others, testing management’s process for determining the cash flow shortfall,

which include (i) evaluating the reasonableness of the projected operating results, (ii) testing the completeness and accuracy

of underlying data used to determine the projected operating results, and (iii) evaluating the significant assumptions used by

management related to the projected operating results.

Evaluating management’s assumptions related to projected operating

results, involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance

of the Company, (ii) the consistency with external market and industry data and (iii) whether these assumptions were consistent

with evidence obtained in other areas of the audit.

audits included performing procedures to assess the risks of material misstatement of the 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 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 financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that:

(i) related to accounts or disclosures that are material to the financial

statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.

described in Note 1 to the financial statements, the Company has incurred recurring losses since inception and expects to continue to

incur losses as a result of costs and expenses related to its research and continued development of its technology.

The Company has funded

most of its activities through sales of its common stock to investors, and upon the exercise of options and warrants.

The Company’s

projected cash flow shortfall based on its current operations adjusted for any non-recurring cash expenses for the next 12 months, is

approximately $385,000 per quarter.

Based on the Company’s current expectations of its cash flow, the Company’s working capital

would support the Company’s activities for approximately 22 months subsequent to December 31, 2021.

Management performs

a liquidity analysis quarterly to determine the Company’s ability to continue as a going concern.

The determination of the projected

cash flow shortfall required management to make assumptions and estimates about the future undiscounted cashflows associated with operations.

principal considerations for our determination that performing procedures relating to the liquidity analysis of the Company is a critical

audit matter, is the significant judgment required of management when determining the projected cash flow shortfall, which in turn led

to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s significant assumptions

related to projected operating results.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial

The procedures include, among others, testing management’s process for determining the cash flow shortfall, which include

(i) evaluating the reasonableness of the projected operating results, (ii) testing the completeness and accuracy of historical

data used to determine the projected operating results, and (iii) evaluating the significant assumptions used by management related to

the projected operating results.

Evaluating management’s assumptions related to projected operating results involved evaluating

whether the assumptions used by management were reasonable considering (i) the current and past performance of the Company, (ii) the

consistency with external market and industry data and (iii) whether these assumptions were consistent with evidence obtained in other

areas of the audit.

CohnReznick LLP

have served as Research Frontiers Incorporated’s auditor since 2019.

FRONTIERS INCORPORATED

1 unchanged sentence

31, 2021 and 2020

Current assets:

and cash equivalents

Royalties receivable,

net of reserves of $972,202 in 2020 and $1,135,598 in 2019

receivable, net of reserves of $ 1,016,678 in 2021 and $ 972,202 in 2020

expenses and other current assets

current assets

Fixed assets, net

Operating lease ROU assets

and Shareholders’

lease ROU assets

and other assets

and Shareholders’ Equity

portion of operating lease liability

expenses and other

current liabilities

Current portion

of operating lease liability

Accounts payable

Accrued expenses

Total current liabilities

lease liability, net of current portion

Shareholders’

Common stock, par

value $0.0001 per share;

Shareholders’

Common stock, par value $ 0.0001 per share;

authorized 100,000,000 shares, issued and outstanding 31,650,396 in 2021 and 31,575,786 in 2020

Additional paid-in

paid-in capital

( 119,687,128 )

( 117,840,776 )

shareholders’

liabilities and shareholders’

shareholders’ equity

liabilities and shareholders’ equity

accompanying notes to consolidated financial statements.

2 unchanged sentences

ended December 31, 2021 and 2020

and development

market adjustment

on disposal of fixed asset

loan forgiveness

investment income

Operating expenses

Research and development

Operating loss

( 1,838,815 )

( 2,577,389 )

and diluted net loss per common share

average number of common shares outstanding

PPP loan forgiveness

Net investment income

$ ( 1,846,352 )

$ ( 2,340,864 )

Basic and diluted net loss per common share

Weighted average number of common shares outstanding

accompanying notes to consolidated financial statements.

FRONTIERS INCORPORATED

Statements of Shareholders’

Statements of Shareholders’ Equity

ended December 31, 2021 and 2020

Paid-in Capital

Balance, January 1, 2020

2 unchanged sentences

Exercise of options and warrants

Issuance of capital stock

Warrants converted to equity

Exercise of options

Exercise of options, shares

Share-based compensation

( 2,340,864 )

Balance, December 31, 2020

( 117,840,776 )

Exercise of options and warrants

Exercise of options

Share-based compensation

( 1,846,352 )

Balance, December 31, 2021

8 unchanged sentences

$ ( 2,340,864 )

Adjustments to reconcile

net loss to net cash used in operating activities:

Depreciation and

Warrant market adjustment

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Unrealized loss on marketable

Share-based compensation

Loss on disposal

of fixed asset

Other income - PPP

loan forgiveness

Change in assets

and liabilities:

Other income - PPP loan

Change in assets and liabilities:

Royalty receivables

Prepaid expenses

and other current assets

Accounts payable

and accrued expenses

Prepaid expenses and other

current assets

Accounts payable and accrued

cash used in operating activities

( 1,804,293 )

( 2,252,691 )

Cash flows from investing activities:

Purchases of fixed

Purchases of fixed assets

Purchases of marketable

( 3,433,633 )

Sales of marketable securities

from sale of fixed asset

cash used in investing activities

( 2,784,710 )

Cash flows from financing activities:

Net proceeds from

issuances of common stock and warrants and exercise of options and warrants

Net proceeds from exercise

of options and warrants

from PPP loan

cash provided by financing activities

Net (decrease) increase in cash and

cash equivalents

Cash and cash

equivalents at beginning of year

Cash and cash

equivalents at end of year

Net decrease in cash and cash equivalents

( 4,502,741 )

( 1,819,255 )

Cash and cash equivalents

at beginning of year

Cash and cash equivalents

at end of year

accompanying notes to consolidated financial statements

2 unchanged sentences

Business and Basis for Presentation

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.

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™

sunshades, skylights and interior partitions for homes and buildings;

automotive windows, sunroofs, sun visors, sunshades, rear-view

mirrors, instrument panels and navigation systems;

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 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.

Company has primarily utilized its cash, cash equivalents, and investments generated from sales of our common stock, proceeds

from the exercise of 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 options and warrants and

royalty fees collected.

As of December 31, 2020, we had working capital of approximately $5.2 million, cash and cash equivalents

of approximately $4.8 million, shareholders’

equity of approximately $5.3 million and an accumulated deficit of approximately

$117.8 million.

Our projected cash flow shortfall based on our current operations adjusted for any non-recurring cash expenses

for the next 12 months is approximately $400,000-$450,000 per quarter.

Based on our current expectations of our cash flow

shortfall for the next 12 months, our working capital would support our activities for the next 33 months.

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.

Company has primarily utilized its cash, cash equivalents, and investments generated from sales of our common stock, proceeds from the

exercise of 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;

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 options and warrants and royalty fees collected.

As of December 31, 2021, we had working capital of approximately

$ 3.7 million, cash and cash equivalents and marketable securities of approximately $ 3.0 million, shareholders’ equity of approximately

$ 3.8 million and an accumulated deficit of approximately $ 119.7 million.

Our projected cash flow shortfall based on our current operations

adjusted for any non-recurring cash expenses for the next 12 months is approximately $ 385,000 per quarter.

Based on our current expectations

of our cash flow shortfall for the next 12 months, our working capital would support our activities for the next 22 months.

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.

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.

To date, the Company has not generated sufficient revenue from its licensees to fund its operations.

Global Events:

March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic

and recommended containment and mitigation measures worldwide.

As a result, the Company expects operations at its facility to

continue to be affected in some capacity, as the COVID-19 virus continues to proliferate and the federal, state and local governments

under which we operate continue to adopt new rules.

The Company has put in place enhanced procedures, such as restricting international

and domestic travel, adopting a variety of steps designed to ensure social distancing in our facilities, including working remotely

where available, and increasing our cleaning and sanitizing procedures in our facilities, in an effort to protect its employees

and communities.

were negatively impacted in our second, third and fourth quarters due to delays in manufacture of products using our technology.

Most of the products using our technology are manufactured by licensees overseas in Europe and Asia who have been similarly affected

by the pandemic.

The disruption caused by public health crises, such as COVID-19, could result in lower levels of sale activity

for products using our technology resulting in lower level of royalties owed to us from the sale of these products.

of the potential business disruptions and related financial impact cannot be reasonably estimated at this time, but could materially

adversely affect our business, financial condition, results of operations, and cash flows.

Net of amounts previously reserved

which were fully written off in 2020, the Company has increased its allowance for uncollectible royalty receivables in 2020 until

the collectability from certain licensees can be better ascertained in the regions affected by COVID-19.

connection with the COVID-19 crisis, Congress passed, and the president signed, the Coronavirus Aid, Relief, and Economic Security

Act (“CARES Act”) which, among other things, provides relief for businesses impacted by the pandemic.

applied for and received $202,052 in proceeds from the Paycheck Protection Program (“PPP Loan”) made available under

the CARES Act.

The PPP Loan is intended to offer businesses hurt by the COVID-19 pandemic economic assistance with the potential

for the principal to be forgiven based on certain expenses incurred during the first 24 weeks after the issuance of the PPP Loan.

The Company estimated that the $194,140 of the PPP Loan principal will be forgiven based on payroll and other expenses incurred

through June 30, 2020.

The Company estimated that all of the loan will be forgiven when the additional payroll and other expenses

incurred from July 1, 2020 to September 30, 2020 are included.

Consequently, the Company recorded $202,052 as other income for

the year ended December 31, 2020 representing the PPP loan estimated to be forgiven.

March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic and

recommended containment and mitigation measures worldwide.

As a result, the Company expects operations at its facility to continue to

be affected in some capacity, as the COVID-19 virus continues to proliferate and the federal, state and local governments under which

we operate continue to adopt new rules.

The Company has put in place enhanced procedures, such as restricting international and domestic

travel, adopting a variety of steps designed to ensure social distancing in our facilities, including working remotely where available,

and increasing our cleaning and sanitizing procedures in our facilities, in an effort to protect its employees and communities.

were negatively impacted in 2020 and 2021 due to delays in manufacture of products using our technology.

Most of the products using our

technology are manufactured by licensees overseas in Europe and Asia who have been similarly affected by the pandemic.

The disruption

caused by public health crises, such as COVID-19, could result in lower levels of sale activity for products using our technology resulting

in lower level of royalties owed to us from the sale of these products.

The duration of the potential business disruptions and related

financial impact cannot be reasonably estimated at this time, but could materially adversely affect our business, financial condition,

results of operations, and cash flows.

Net of amounts previously reserved which were fully written off in 2020, the Company has increased

its allowance for uncollectible royalty receivables in 2020 until the collectability from certain licensees can be better ascertained

in the regions affected by COVID-19.

connection with the COVID-19 crisis, Congress passed, and the president signed, the Coronavirus Aid, Relief, and Economic Security Act

(“CARES Act”) which, among other things, provides relief for businesses impacted by the pandemic.

The Company applied for

and received $ 202,052

in proceeds from the Paycheck Protection Program (“PPP Loan”)

made available under the CARES Act.

The PPP Loan is intended to offer businesses hurt by the COVID-19 pandemic economic assistance with

the potential for the principal to be forgiven based on certain expenses incurred during the first 24 weeks after the issuance of the

The Company recorded $ 202,052

as other income for the year ended December 31, 2020 representing

the PPP Loan which was expected to be forgiven in 2021.

Final PPP Loan forgiveness was received in 2021.

Summary of Significant Accounting Policies

1 unchanged sentence

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, 2020 and 2019.

Cash equivalents consist

of short-term investments in money market accounts at December 31, 2021 and 2020.

and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits.

have never experienced any losses related to these balances.

FDIC insurance coverage is $250,000 per depositor at each financial

institution, and our non-interest bearing cash balances may again exceed federally insured limits.

Amounts on deposit in excess

of federally insured limits at December 31, 2020 and 2019 are approximately $4.5 million and $6.3 million, respectively.

We have never

experienced any losses related to these balances.

FDIC insurance coverage is $ 250,000 per depositor at each financial institution, and

our non-interest bearing cash balances may again exceed federally insured limits.

Amounts on deposit in excess of federally insured limits

at December 31, 2021 and 2020 are approximately $ 0 and $ 4.5 million, respectively.

Marketable Securities

Company classifies investments in marketable securities as trading, available-for-sale or held-to-maturity at the time of purchase and

periodically re-evaluates such classification.

Trading securities are carried at fair value, with unrealized holding gains and losses

included in earnings.

Held-to-maturity securities are recorded at cost and are adjusted for the amortization or accretion of premiums

or discounts over the life of the related security.

Unrealized holding gains and losses of available-for-sale securities are excluded

from earnings and are reported as a separate component of accumulated other comprehensive income (loss) until realized.

In determining

realized gains and losses, the cost of the securities sold is based on the specific identification method.

Interest and dividends on

the investments are accrued at the balance sheet date.

value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”)

in an orderly transaction between market participants at the measurement date.

Fair value measurements are broken down into three levels

based on the reliability of inputs as follows:

Level 1 inputs are quoted prices in active markets for identical assets or liabilities

that the Company has the ability to access at the measurement date.

An active market for the asset or liability is a market in which

transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly

or indirectly.

Level 2 inputs include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices

that are observable for the asset or liability (e.g., interest rates and yield curves observable at commonly quoted intervals or current

market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures.

Level 3 inputs are

unobservable inputs for the asset or liability.

Unobservable inputs are used to measure fair value to the extent that observable inputs

are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the

measurement date.

December 31, 2021 all investments are Level 1 and were classified as trading and consisted of the following:

Schedule of Unrealized Loss on Investments

December 31, 2021

Value of trading

Putnam Short Duration Bond

Putnam Ultra Short Duration Income

Unrealized loss

Royalties Receivable

1 unchanged sentence

is reasonably assured.

The allowance for doubtful accounts 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 doubtful accounts

periodically.

The allowance for doubtful accounts 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 doubtful accounts 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, 2020,

three companies accounted for 16%, 11% and 10%, respectively, of the Company’s outstanding receivables.

As of December 31,

2019, two companies accounted for 14% and 13%, respectively, of the Company’s outstanding receivables.

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, 2021, two companies accounted

and 11 % of the Company’s outstanding receivables.

As of December 31, 2020, three companies accounted for 16 %,

of the Company’s outstanding receivables.

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.

Depreciation and amortization are computed using the straight-line

method over the estimated useful lives of the assets.

Revenue Recognition/Fee Income

4 unchanged sentences

contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized.

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.

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.

606 follows a five-step approach to determining revenue recognition including:

1) Identification of the contract;

2) Identification

of the performance obligations;

2) Identification of

the performance obligations;

3) Determination of the transaction price;

4) Allocation of the transaction price and 5) Recognition

4) Allocation of the transaction price and 5) Recognition of

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 some time 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.

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.

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.

(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 some time 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.

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.

(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.

on the royalty rate comparison referred to above, any pricing above and beyond the average royalty rate would relate to the Technical

1 unchanged sentence

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 services to its licensees, which further supports the conclusions reached using the royalty

rate analysis.

Technical Support and New Improvements performance obligations are co-terminus over the term of the license agreement.

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

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.

recognize revenue when or as the performance obligations in the contract are satisfied.

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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.

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 10-15% of the selling price.

While this is variable consideration, it is subject to the sales/usage royalty

exception to recognition of variable consideration in ASC 606 10-55-65 and therefore is not recognized until the subsequent sales

or usage occurs or the MAR period commences.

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.

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 10 - 15 % of the selling price.

While this is variable consideration, it is subject to the sales/usage royalty exception to recognition

of variable consideration in ASC 606 10-55-65 and therefore is not recognized until the subsequent sales or usage occurs or the MAR period

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.

(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.

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 (contract liabilities).

Such excess amounts are recorded as deferred revenue and are recognized as revenue in future

periods as earned.

Contract assets represent unbilled receivables and are presented within accounts receivable, net on the

consolidated balance sheets.

Such excess amounts are recorded as deferred revenue and are recognized as revenue in future periods as earned.

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.

of December 31, 2020, the Company has three license agreements that are in their initial multiyear term (“Initial Term”)

with continuing performance obligations going forward.

The Initial Term of one of these agreements will end as of December 31,

2021, one will end as of December 31, 2022, and one will end as of December 31, 2024.

The Company currently expects all three

of these agreements will renew annually at the end of the Initial Term.

As of December 31, 2020, the aggregate amount of the revenue

to be recognized upon the satisfaction of the remaining performance obligations for the three license agreements is $490,000.

The revenue for these remaining performance obligations for each of the three license agreements is expected to be recognized

evenly throughout their remaining period of the Initial Term.

the years ended December 31, 2020 and 2019, the Company entered into a number of license agreements covering its light control

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, 2020, there was no balance in deferred

As of December 31, 2019, the deferred revenue balance was $7,734.

income represents amounts earned by the Company under various license and other agreements relating to technology developed by

During 2020, five licensees accounted for 18%, 16%, 12%, 12% and 12% of fee income recognized during the year.

2019, three licensees accounted for 38%, 12% and 10% of fee income recognized for the year.

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.

of December 31, 2021, the Company has four license agreements that are in their initial multiyear term (“Initial Term”) with

continuing performance obligations going forward.

The Initial Term of three of these agreements will end as of December 31, 2022 and

one will end as of December 31, 2024, The Company currently expects all four of these agreements will renew annually at the end of the

Initial Term.

As of December 31, 2021, the aggregate amount of the revenue to be recognized upon the satisfaction of the remaining performance

obligations for the four license agreements is $ 273,000 .

The revenue for these remaining performance obligations for each of the four license agreements is expected to be recognized evenly

throughout their remaining period of the Initial Term.

the years ended December 31, 2021 and 2020, the Company 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, 2021 and 2020, there was no balance in deferred revenue.

income represents amounts earned by the Company under various license and other agreements relating to technology developed by the Company.

During 2021, four licensees accounted for 20 %, 18 %, 18 % and 12 % of fee income recognized during the year.

During 2020, five licensees

accounted for 18 %, 16 %, 12 %, 12 % and 12 % of fee income recognized during the year.

Basic and Diluted Loss Per Common Share

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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 each

of the years in the two-year period ended December 31, 2020 because all potentially dilutive securities ( i.e., options

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 each of the years in the

two-year period ended December 31, 2021 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 2,697,251 and 3,031,494 for 2020 and 2019, respectively.

The number of options and warrants that were not included because their effect is antidilutive

was 2,599,701

and 2,697,251

for 2021 and 2020, respectively.

Research and Development Costs

and development costs are charged to expense as incurred.

Company expenses costs relating to the development or acquisition of patents due to the uncertainty of the recoverability of these

Company expenses costs relating to the development or acquisition of patents due to the uncertainty of the recoverability of these items.

Use of Estimates

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.

results could differ from those estimates.

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.

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 financial statement carrying amounts of existing assets and liabilities

and their respective tax bases and operating loss and tax credit carry-forwards.

Deferred tax assets and liabilities are measured

using enacted tax rates expected to be recovered or settled.

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 greater than 50

percent likely to be realized upon ultimate settlement.

Unrecognized tax benefits are tax benefits claimed in tax returns that

do not meet these recognition and measurement standards.

We classify accrued interest and penalties related to any unrecognized

tax benefits in our income tax provision.

At December 31, 2020 and 2019, we do not have accrued interest and penalties related

to any unrecognized tax benefits.

We do not believe we have any uncertain tax positions as of December 31, 2020 and 2019.

Deferred tax assets and liabilities are recognized for the future tax consequences

attributable to differences between the financial statement 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.

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 greater than 50 percent likely to be realized

upon ultimate settlement.

Unrecognized tax benefits are tax benefits claimed in tax returns that do not meet these recognition and measurement

We classify accrued interest and penalties related to any unrecognized tax benefits in our income tax provision.

31, 2021 and 2020, we do not have accrued interest and penalties related to any unrecognized tax benefits.

We do not believe we have

any uncertain tax positions as of December 31, 2021 and 2020.

tax years subject to examination by major tax jurisdictions include the years 2016 and forward by the U.S.

Internal Revenue Service

and certain states.

Internal Revenue Service and

certain states.

The Company is not currently being audited by any tax jurisdiction.

Equity-Based Compensation

recognize all stock-based compensation as an expense in the consolidated financial statements and such costs are measured at the

fair value of the award at the date of grant.

In addition to reflecting compensation expense for new share-based payment awards,

expense is also recognized to reflect the remaining vesting period of awards that had been granted in prior periods.

related to stock option exercises are reflected as financing cash inflows.

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.

recognize all stock-based compensation as an expense in the consolidated financial statements and such costs are measured at the fair

value of the award at the date of grant.

In addition to reflecting compensation expense for new share-based payment awards, expense is

also recognized to reflect the remaining vesting period of awards that had been granted in prior periods.

Tax benefits related to stock

option exercises are reflected as financing cash inflows.

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

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

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.

connection with employee and director stock options, the Company charged to compensation expense $327,554 and $790,339 during

the years ended December 31, 2020 and 2019, respectively.

in this model are assumptions related to expected stock-price volatility, option term, risk-free interest rate and dividend yield.

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.

connection with employee and director stock options, the Company charged to compensation expense $ 217,008 and $ 327,554 during the years

ended December 31, 2021 and 2020, respectively.

As of December 31, 2021, these awards were fully vested.

higher cash compensation, the Company has granted warrants and non-employee options to consultants.

These warrants and non-employee

options vested fully on the date of grant.

During the year ended December 31, 2019, the Company charged $51,273 to expense in

connection with options granted to a consultant.

There were no such charges for the year ended December 31, 2020.

In lieu of higher cash compensation,

the Company has granted warrants and non-employee options to consultants.

These warrants and non-employee options vested fully on the

date of grant.

There were no such charges for the year ended December 31,2021 and 2020.

Restricted Stock

cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common

stock is granted.

cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock

The compensation cost is recognized over the period between the issue date and the vesting period for such shares.

Restricted stock is included in total common shares outstanding upon the lapse of any vesting conditions.

stock is included in total common shares outstanding upon the lapse of any vesting conditions.

Impairment of Long-Lived Assets

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.

In 2019, the Company incurred a loss from the impairment of a fixed asset of $50,666

in value of an automobile which was subsequently sold to an employee at fair market value.

There was no impairment of long-lived

assets recorded during 2020.

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 no impairment of long-lived assets recorded during 2021 and 2020.

Fair Value Measurements

of December 31, 2020 and 2019, the fair value of the Company’s financial assets and non-warrant liabilities including cash

and cash equivalents, royalties receivable, accounts payable and accrued expenses approximated carrying value due to the short-term

maturity of these instruments.

of December 31, 2021 and 2020, the fair value of the Company’s financial assets and non-warrant liabilities including cash and

cash equivalents, marketable securities, royalties receivable, accounts payable and accrued expenses approximated carrying value due

to the short-term maturity of these instruments.

Recent Accounting Pronouncements

Accounting Standards

August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement:

Disclosure Framework –

Changes to the Disclosure

Requirements for Fair Value Measurement,”

which eliminates, amends and adds disclosure requirements for fair value measurement.

The standard is effective for the interim and annual periods beginning after December 15, 2019, with early adoption permitted.

The Company adopted this standard as of January 1, 2020 and it did not have a material impact on the consolidated financial statements.

June 2018, the FASB issued ASU 2018-07 “Compensation—Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based

Payment Accounting”

(“ASU 2018-07”), which simplifies the accounting for share-based payments to nonemployees

by aligning it with the accounting for share-based payments to employees, with certain exceptions.

ASU 2018-07 was effective for

the Company in the first quarter of fiscal 2020 and it did not have a material impact on the consolidated financial statements.

January 1, 2019, the Company adopted the Financial Accounting Standards Board’s Standard, “Leases”

842) , as amended.

The standard requires all leases to be recorded on the balance sheet as a right of use asset and a lease

The standard provides practical expedients in order to simplify adoption, including the following:

entity need not reassess whether any expired or existing contracts are or contain leases.

entity need not reassess the lease classification for any expired or existing leases.

Instead, any leases previously classified

as operating leases will continue to be classified as operating leases, while any leases previously classified as capital

leases will be classified as finance leases.

entity need not reassess initial direct costs for any leases.

Company used the above practical expedients as the transition method in the application of the new lease standard at January 1,

The Company applied a policy election to exclude short-term leases from balance sheet recognition and elected certain practical

expedients at adoption.

As permitted, the Company did not reassess whether existing contracts are or contain leases, the lease

classification for any existing leases or the initial direct costs for any existing leases which were not previously accounted

for as leases, are or contain a lease.

At adoption on January 1, 2019, an operating lease liability of $1,134,000 and an operating

lease right of use asset of $941,000 were recorded (most of this liability relating to the Company’s lease for its facilities

in Woodbury, New York).

The operating lease liability was $193,000 more than the operating lease right of use asset due to unamortized

lease incentive from periods prior to the adoption of the new lease standard.

There was no cumulative earnings effect adjustment.

June 2016, the FASB issued ASU 2016-13, “Financial Instruments”

Credit Losses (Topic 326):

Measurement of

Credit Losses on Financial Instruments”

(“ASU 2016-13”), which requires entities to use a new impairment model

based on expected losses.

Under this new model an entity would recognize an impairment allowance equal to its current estimate

of credit losses on financial assets measured at amortized cost.

ASU 2016-13 was effective for us beginning January 1, 2020.

adoption of this standard did not have a material impact on the consolidated financial statements.

and amortization expense for the years ended December 31, 2020 and 2019 was $67,082 and $195,377, respectively.

Fixed assets and

their estimated useful lives as of December 31, 2020 and 2019 are as follows:

and furniture

show materials

of lease or estimated

of asset if shorter

accumulated depreciation and amortization

Company believes that no new accounting standards that are not yet effective will have a material effect on the Company’s consolidated

financial statements.

assets and their estimated useful lives as of December 31, 2021 and 2020 are as follows:

Schedule of Fixed Assets

Equipment and furniture

Trade show materials

Life of lease or estimated

Leasehold improvements

life of asset if shorter

Less accumulated depreciation

and amortization

( 2,712,525 )

( 2,682,630 )

Accrued Expenses and Other

expenses consist of the following at December 31, 2021 and 2020:

Payroll, bonuses and related

Schedule of Accrued Expenses and Other

Payroll, bonuses and related benefits

Professional services

Accrued expenses

inception, the Company has incurred losses from operations and as a result has not recorded income tax expense.

Benefits related

to net operating loss carry-forwards 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, 2020 and 2019 and the fact that no income tax benefit was recorded in each of these years are

attributable to the change in the valuation allowance recorded in each year.

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, 2021 and 2020 and the fact that no income tax benefit was recorded in each of these years is attributable to the

change in the valuation allowance recorded in each year.

tax effects of temporary differences that give rise to significant portions of the deferred tax assets at December 31, 2021 and 2020

are presented below:

Schedule of Deferred Tax Assets

Deferred tax assets:

Allowance for bad

Net operating loss

carry-forwards

Allowance for bad debts

Net operating loss carryforwards

Stock option expense

Research and other

Research and other credits

temporary differences

Total gross deferred

Total gross deferred tax

valuation allowance

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( 16,444,000 )

tax assets, net

reconciliation of the income tax expense (benefit) computed at the federal statutory tax rates to income tax expense (benefit)

is as follows:

tax provision at federal statutory rate

carryforwards and other

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.

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, 2020, the Company

had net operating loss carryforwards for federal income tax purposes of approximately $68,951,000.

Net operating loss carryforwards

accumulated through December 31, 2017 of approximately $62,129,000 will expire in varying amounts from 2021 through 2037.

operating losses generated in 2018, 2019 and 2020, totaling approximately $6,822,000, will carryforward indefinitely, but cannot

offset more than 80 percent of taxable income.

Research and other credit carryforwards of approximately $952,000 are available

to the Company to reduce income taxes payable in future years principally through 2039.

The Company’s ability to utilize

its net operating loss carryforwards and its current year tax credits in future periods could be subject to the 382 limitation.

The Company will need to complete an analysis to determine whether its net operating losses are subject to the 382 limitation.

Shareholders’

Schedule of Reconciliation Income Tax Expenses Benefit

Income tax provision at federal

statutory rate

$ ( 388,000 )

$ ( 485,000 )

Permanent differences

Expired carryforwards and other

Valuation allowance

Total income tax provision

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.

December 31, 2021, the Company had net operating loss carryforwards for federal income tax purposes of approximately $ 65,953,000 .

Net operating loss carryforwards accumulated through December 31, 2017 of approximately $ 57,118,000

in varying amounts from 2022 through 2037.

Net operating losses generated in 2018, 2019, 2020 and 2021, totaling

approximately $ 8,835,000 ,

will carry forward indefinitely, but cannot offset more than 80

percent of taxable income.

Research and other credit carryforwards of approximately $ 945,000

are available to the Company to reduce income taxes payable in future years principally through 2040.

The Company’s ability to

utilize its net operating loss carryforwards and its current year tax credits in future periods could be subject to the 382

The Company will need to complete an analysis to determine whether its net operating losses are subject to the 382

Shareholders’ Equity

Common Stock and Warrants

or around May 30, 2019, the Company sold to accredited investors a total of 1,276,599 shares of common stock and warrants expiring

May 31, 2024 to purchase 638,295 shares of common stock at an exercise price of $3.384, $3.666 or $4.23 per share depending on

the exercise date.

Research Frontiers Incorporated also sold to Gauzy, at a price of $1.38 per unit, with each unit comprised

of one share of unregistered common stock and one half of one warrant.

The warrant can be converted into one share of unregistered

common stock at an exercise price of $1.656, $1.794 or $2.07 per share depending on the exercise date.

Gauzy received a total

of 724,638 shares of unregistered common stock and warrants expiring May 31, 2024 to purchase 362,319 shares of common stock.

The aggregate proceeds from these stock offerings was $4.6 million.

that participated in the May 30, 2019 offering agreed to amending/clarifying language to the terms of the warrants that they received

in the September 7, 2018 offering.

Those investors that received warrants in the September 7, 2018 offering that did not participate

in the May 30, 2019 offering, separately agreed as of June 27, 2019 to the same amending/clarifying language used in the May 30,

2019 offering.

The amending/clarifying language relating to the September 7, 2018 warrants does not allow for a net cash settlement

option for the warrants even if no registered shares of common stock are available upon the exercise of the warrant.

liability was valued at $1,153,439 (including all valuation adjustments since their issuance) through the date of these new agreements

and amendments and, based on the amended warrant terms, the warrant liability was reclassified to equity as of these dates.

Company recorded a non-cash expense $652,025 for the twelve-month period ended December 31, 2019 to mark these warrants to their

estimated market value as of their respective amendment/clarification date when they were reclassified as equity.

2019, the Company received proceeds of $1,170,546 and issued 1,587,814 shares of common stock in connection with the exercise

of outstanding options and warrants.

During 2020, the Company received proceeds of $284,207 and issued 321,524 shares of common

stock in connection with the exercise of outstanding options and warrants.

2021, the Company received proceeds of $ 86,262 and issued 74,610 shares of common stock in connection with the exercise of outstanding

options and warrants.

During 2020, the Company received proceeds of $ 284,207 and issued 321,524 shares of common stock in connection

with the exercise of outstanding options and warrants.

Options and Warrants

Employee Options

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 1,400,000 shares of its common stock for issuance under this plan,

and 683,500 options and other awards were available for issuance under this plan as of December 31, 2020.

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 1,400,000 shares of its common stock for issuance under this plan, and 485,500 options and other awards

were available for issuance under this plan as of December 31, 2021.

the discretion of the Board of Directors, options expire in ten years 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.

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.

Company granted 198,000 fully vested options during 2021 and recorded share-based compensation of $ 217,008 .

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fully vested options during 2020 and recorded share-based compensation of $ 327,554 .

The Company valued these grants using

the Black-Scholes option pricing model with the following weighted average assumptions:

The Company valued these grants using the Black-Scholes

option pricing model with the following weighted average assumptions:

Schedule of Assumptions Used to Value Options Granted to Employees

Fair value on grant date

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options are exercisable at December 31, 2021.

Schedule of Option Activity

Number of Shares

Weighted Average

Balance at December

Weighted Average Remaining

Contractual Term

Aggregate Intrinsic

Subject to Option

Exercise Price

Balance at January 1, 2020

Balance at December 31, 2020

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in warrants is summarized below:

Schedule of Warrant Activity

Number of Shares Underlying

Weighted Average

Balance at December

Balance at January 1, 2020

Balance at December 31, 2020

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lieu of cash compensation, the Company has granted warrants to investors and non-employee options to consultants.

These warrants

and non-employee options vested ratably over various terms ranging from 12 to 59 months.

The non-employee options are valued at

fair value at the time that the related services are provided using the Black-Scholes option valuation model and marked to market

quarterly using the Black-Scholes option valuation model.

There are 1,399,991 warrants issued to investors that are outstanding

that are accounted for as equity.

These warrants and

non-employee options vested ratably over various terms ranging from 12 to 59 months.

The non-employee options are valued at fair value

at the time that the related services are provided using the Black-Scholes option valuation model and marked to market quarterly using

the Black-Scholes option valuation model.

There are 1,399,991 warrants issued to investors that are outstanding that are accounted for

and non-employee options generally expire in five years from the date of issuance.

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License and Other Agreements

Company has entered into a number of license agreements covering various products using the Company’s SPD technology.

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 5-15% 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.

who sell products or components to other licensees of Research Frontiers do not pay a royalty on such sale;

Research Frontiers

will collect such royalty from the licensee incorporating such products or components into its own 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.

Most licenses are non-exclusive and generally last as long as our

patents remain in effect.

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 5 - 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 who sell products or components

to other licensees of Research Frontiers do not pay a royalty on such sale;

Research Frontiers will collect such royalty from the licensee

incorporating such products or components into its own 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

Most licenses are non-exclusive and generally last as long as our patents remain in effect.

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., one of the Company’s

officers (Michael R.

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., one of the Company’s officers

LaPointe) and one former officer (Seth L.

Van Voorhees) are shareholders of VariGuard SmartGlass Inc.

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 Mr.

LaPointe also remains

a full-time employee at the Company.

Company has an employment agreement with its chief executive officer which provides for an annual base salary of $500,000 for

calendar year 2021.

This employment agreement has an evergreen provision that extends the term by one year on the expiration date

unless either the Company or the employee has given notice that they will not be renewing the agreement upon the expiration of

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.

LaPointe also remains a full-time employee

at the Company.

In October 2021, the Company entered into an amendment to the license agreement with VariGuard modifying its scope

Company has an employment agreement with its chief executive officer which provides for an annual base salary of $ 600,000 for calendar

This employment agreement has an evergreen provision that extends the term by one year on the expiration date unless either

the Company or the employee has given notice that they will not be renewing the agreement upon the expiration of its term.

Company has a defined contribution profit sharing (401k) plan covering employees who have completed one year of service.

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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.

Company has operating leases for certain facilities, vehicles and equipment with a weighted average remaining lease term of 4.2

years as of December 31, 2020.

Operating leases are included in right of use lease assets, other current liabilities and long-term

lease liabilities on the consolidated balance sheet.

Right of use lease assets and liabilities are recognized at each lease’s

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.

Company has operating leases for certain facilities, vehicles and equipment with a weighted average remaining lease term of 3.2 years

as of December 31, 2021.

Operating leases are included in right of use lease assets, other current liabilities and long-term lease

liabilities on the consolidated balance sheet.

Right of use lease assets and liabilities are recognized at each lease’s

commencement date based on the present value of its lease payments over its respective lease term.

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readily determinable.

When the interest rate implicit in its lease agreements are not readily determinable, the Company uses an

interest rate based on the marketplace for public debt.

The weighted-average discount rate associated with operating leases as

of December 31, 2020 is 5.5%.

to the Company’s adoption of the new lease accounting guidance on January 1, 2019, the Company recorded new right of use

lease assets of approximately $900,000 and associated lease liabilities of approximately $1.1 million.

When the interest rate implicit in its lease agreements is not readily determinable, the Company uses

an interest rate based on the marketplace for public debt.

The weighted average discount rate associated with operating leases as of

December 31, 2021 is 5.5 %.

to the Company’s adoption of the new lease accounting guidance on January 1, 2019, the Company recorded new right of use lease

assets of approximately $ 900,000 and associated lease liabilities of approximately $ 1.1 million.

of operating lease liabilities as of December 31, 2021 were as follows:

Schedule of Minimum Annual Future Rental Commitments

Total lease payments

lease interest

imputed lease

Present value of lease liabilities

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.

“Separation

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.

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.

The Rights will expire at the close of business on February 11, 2023, 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.

above description highlights some of the features of the Company’s Rights Plan and is not a complete description of the

A more detailed description and copy of the Rights Plan has been filed with the SEC and is available from the Company

upon request.

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.

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

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 .

The Rights will expire at the

close of business on February 11, 2023 , 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.

above description highlights some of the features of the Company’s Rights Plan and is not a complete description of the Rights

A more detailed description and copy of the Rights Plan has been filed with the SEC and is available from the Company upon request.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures