Research Frontiers, Inc. (“RFI”) filed Exhibit 10.16, WINDOW LICENSE AGREEMENT BETWEEN RESEARCH FRONTIERS INCORPORATED AND THERMOVIEW INDUSTRIES, INC. with their 1999 Form 10-K filed 3/30/2000. KPMG signed off on the audited financial statements on March 27, 2000, six days after the agreement was effective. No subsequent event was noted in the 1999 Form 10-K, although RFI listed the ThermoView Industries, Inc. (“TII”) agreement in Note 10, License and Other Agreements, where they described TII as one of five Licensees that “currently have active programs for developing SPD products.”

RFI made no mention of the TII agreement in Form 10-Q for the three months ended March 41, 2000. The company did issue a press release on the agreement on March 22, 2000:

http://www.smartglass.com/pressreleases/press60.html

On March 30, 2001, RFI filed an amended Form 10-Q for the Quarter ended March 31, 2000, “TO REFLECT A NON-CASH ACCOUNTING CHARGE RESULTING FROM WARRANTS GRANTED TO A CONSULTANT IN 1994 TO PURCHASE 25,000 SHARES OF COMMON STOCK. SUCH WARRANTS VESTED DURING MARCH OF 2000.” This charge was described in the Notes to Financial Statements as follows:

“Vesting of Performance Warrants”

“The accompanying financial results for the first quarter of the year ended December 31, 2000 have been restated from amounts originally reported to reflect a non-cash accounting charge of $528,198 ($0.04 per basic and diluted share) that resulted in an increase in operating expenses and net loss resulting from warrants granted to a consultant in 1994 to purchase 25,000 shares of common stock which only vested when certain performance criteria were met. Such warrants vested during March 2000, based upon the performance criteria being achieved as a result of the Company’s license agreement with Thermoview Industries, Inc. In accordance with EITF Issue 96-18 “Accounting for Equity Instruments that are issued to Other than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” the Company recorded consulting expense of $528,198 based upon the fair value of such warrants on the date the warrants vested as determined using a Black-Scholes option pricing model.”

The TII agreement caused the company to report a non-cash charge of $528,198. A reasonable interpretation of this is the company paid a commission to a consultant who participated in procuring the agreement with TII.

When RFI filed their Form 10-K for the year ended 2000 on March 31, 2001, the Exhibit re-indexed to 10.15 became the TII agreement. No reference to “any active spd programs” was made in Note 10, License and Other Agreements. The company did state “Although the Company may receive minimum annual royalties under certain of these licenses, to date no products have been sold resulting in earned royalties under these license agreements.”

In the 2001 Form 10-K filed on March 28, 2002, RFI stated “another licensee of RFI, ThermoView Industries, has begun demonstrating SPD-Smart windows to the public in Times Square, New York and at their annual shareholders meeting, and ThermoView expects to begin sales of SPD variable light transmission windows to residential customers in the third quarter of 2002.”  RFI made no mention of amounts accrued from or paid by TII under the agreement in the Form 10-K.

In the 2002 Form 10-K filed March 28, 2003, RFI stated, “During 2002, marketing campaigns and product launches by our licensees have been announced under their indicated trademarks for their SPD-Smart products” and listed TII as one such Licensee. For the first time in their Form 10-K filings, RFI disclosed the percentages of fee income from significant customers for the years they presented their Results of Operations Statements.

In the 2003 Form 10-K filed March 15, 2004, RFI noted “During 2002, 2003, and to date in 2004, marketing campaigns and product launches by our licensees have been announced under the indicated trademarks for their SPD-Smart products” and again listed TII as one such Licensee. No other mention of TII was found in the 10-K apart from Licensee listings.

In the 2004 Form 10-K filed March 16, 2005, RFI wrote “During 2002, 2003, 2004 and to date in 2005, marketing  campaigns and product launches by our licensees have been announced under the indicated trademarks for their SPD-Smart products” and once again listed TII as one such Licensee. RFI mentioned writing down the company’s investment in TII of $12,500 in 2004, which fully reserved the value of the asset.

In contrast with RFI, ThermoView Industries, Inc, (“TII”) disclosed the agreement with RFI in their 1999 Form 10-K as a Subsequent Event, as follows:

“In March 2000, we entered into a license agreement with Research Frontiers Incorporated (Research Frontiers), a Delaware corporation with headquarters located in Woodbury, New York, for the non-exclusive rights to market windows which utilize variable light transmission technology developed by Research Frontiers. The agreement provides for the payment of a royalty of 5% of the net selling price of the licensed products as defined in the agreement to Research Frontiers for products sold by us that incorporate such technology. Additionally, we have agreed to pay Research Frontiers a minimum royalty annually for each year of the period of the agreement. The initial term of the license period terminates on December 31, 2003, unless sooner terminated or extended pursuant to the terms of the agreement. The minimum royalty is $50,000 for 2000, $75,000 for 2001 and 2002, and $100,000 for 2003, and is payable in cash or shares of the company’s common stock at the company’s option.”

TII filed the agreement with their 10-Q for the period ended March 31, 2000 as Exhibit 10.10 and described as “Window License Agreement, dated as of March 21, 2000, as amended on April 14, 2000, by and between the registrant and Research Frontiers Incorporated”.

Unlike RFI, TII did not request confidential treatment of the terms contained in the original agreement. The agreement made no mention of Registration Rights in the event payments were made in common shares:   http://tinyurl.com/3oe24  Selected excerpts from the nonredacted filing follow:

3.2 MINIMUM ROYALTIES. Except as otherwise specifically provided for in Section 3.3, during the term of this Agreement LICENSEE agrees to pay LICENSOR the non-refundable minimum royalties (in U.S. Dollars) specified below for each of the stated periods:

PERIOD                                  MINIMUM ROYALTY

          ------                                  ---------------

From the Effective Date of this Agreement

  to December 31, 2000                              $ 50,000

From January 1, 2001 to December 31, 2001           $ 75,000

From January 1, 2002 to December 31, 2002           $ 75,000

From January 1 to December 31 of each

  license year thereafter                           $100,000

3.3 ALTERNATIVE MINIMUM ROYALTIES IF TRAINING OPTION HAS BEEN EXERCISED. If LICENSEE has exercised the Training Option set forth in Section 8.l, during the term of this Agreement LICENSEE agrees to pay LICENSOR the non-refundable minimum royalties (in U.S. Dollars) specified below for each of the stated periods:

          PERIOD                                  MINIMUM ROYALTY

          ------                                  ---------------

From the Effective Date of this Agreement

  to December 31, 2000                              $ 50,000

From January 1, 2001 to December 31, 2001           $150,000

From January 1 to December 31 of each

  license year thereafter                           $225,000

3.4 TIME AND METHOD OF PAYMENT. The initial payment under Section 3.2 or Section 3.3, as applicable, shall be paid to LICENSOR within 10 days of the Effective Date of this Agreement and may be made, at LICENSEE's option either in cash or by delivering to LICENSOR 12,500 shares of common stock of LICENSEE issued in the name of Research Frontiers Incorporated, and each subsequent payment under either Section 3.2 or Section 3.3, as applicable, to LICENSOR shall be made on or before January 31 of each license year commencing January 1, 2001. With respect to minimum annual royalty payments dues under Section 3.2 or 3.3 for the calendar years beginning January 1, 2001, 2002, and, 2003, payment may be made at LICENSEE's option either in cash or, if LICENSEE is a public company and current in all of its reporting requirements under the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder, by delivering to LICENSOR of the number of shares of common stock of LICENSEE issued in the name of Research Frontiers Incorporated and rounded up to the nearest 100 shares equal to: (A) the dollar amount of the payment to be made in stock, divided by (B) the lesser of (X) 80% of the average closing price per share of common stock of LICENSEE on the principal exchange on which such shares of common stock are principally traded for the five trading days immediately prior to the date LICENSEE instructs its stock transfer agent to issue such shares, and (Y) $4.00 per share. All such shares delivered to LICENSOR in payment hereunder shall be considered fully paid and non-assessable. All other payments shall be due on the date specified in this Agreement, or if no date is specified, within 30 days of invoice. All payments made to LICENSOR (except the initial minimum royalty payment if made by delivery of LICENSEE's common stock as aforesaid) shall be paid by wire transfer of immediately available funds to the account of Research Frontiers Incorporated at Chase Manhattan Bank, 1064 Old Country Road, Plainview, New York 11803, Account No.: 904-709361, ABA Wire Code No.: 021 000 021, or to such other account or place, as LICENSOR may specify in a notice to LICENSEE.

14.10 BANKRUPTCY CODE. In the event that either party should file a petition under the federal bankruptcy laws, or that an involuntary petition shall be filed against such party, the parties intend that the non-filing party shall be protected in the continued enjoyment of its rights hereunder to the maximum feasible extent including, without limitation, if it so elects, the protection conferred upon licensees under section 365(n) of Title 17 of the U.S. Code. Each party agrees that it will give the other party immediate notice of the filing of any voluntary or involuntary petition under the federal bankruptcy laws.

In Form 10-Q filed for the period ended June 30, 2000, TII disclosed in Financial Note 9, Stockholders’ Equity, “In March 2000, 12,500 shares of common stock having a fair value of $50,000 were issued to satisfy the Company’s obligation for royalty payments under a license agreement with Research Frontiers Incorporated.”

In Form 10-K for the year 2000, TII in Note 15, Contingencies and Commitments, wrote “In March 2000, the Company entered into a license agreement with Research Frontiers Incorporated (Research Frontiers), a Delaware corporation with headquarters located in Woodbury, New York, for the non-exclusive rights to market windows which utilize variable light transmission developed by Research Frontiers. The agreement provides for the payment of a royalty of 5% of the net selling price of the licensed products as defined in the agreement to Research Frontiers for products sold by us that incorporate such technology. Additionally, the Company has agreed to pay Research Frontiers an annual minimum royalty of $75,000 for 2001 and 2002, and $100,000 for 2003. The royalty is payable in cash or shares of the Company’s common stock at the Company’s option.”

In Form 10-K for the year ended December 31, 2001, the agreement with RFI was described in Financial Note 13 as follows: “In March 2000, the Company entered into a license agreement with Research Frontiers Incorporated (Research Frontiers), a Delaware corporation with headquarters located in Woodbury, New York, for the non-exclusive rights to market windows which utilize variable light transmission technology developed by Research Frontiers. The agreement provides for the payment of a royalty of 5% of the net selling price of the licensed products as defined in the agreement to Research Frontiers for products sold by us that incorporate such technology. Additionally, the Company has agreed to pay to Research Frontiers an annual minimum royalty of $37,500 for 2002 and $100,000 for 2003. The royalty is payable in cash or shares of the Company’s common stock at the Company’s option. Expense related to this agreement totaled $50,000 and $37,500 for 2000 and 2001, respectively.

In Form 10-K for the year ended December 31, 2002, the agreement with RFI was described in Financial Note 13 as follows: “In March 2000, the Company entered into a license agreement with Research Frontiers Incorporated (Research Frontiers), a Delaware corporation with headquarters located in Woodbury, New York, for the non-exclusive rights to market windows which utilize variable light transmission technology developed by Research Frontiers. The agreement provides for the payment of a royalty of 5% of the net selling price of the licensed products as defined in the agreement to Research Frontiers for products sold by us that incorporate such technology. Additionally, the Company has agreed to pay Research Frontiers an annual minimum royalty of $100,000 for 2003. The royalty is payable in cash or shares of the Company’s common stock at the Company’s option. Expense related to this agreement totaled $50,000, $37,500, and $37,500 for 2000, 2001, and 2002, respectively.”

No reference to Research Frontiers was made in the Form 10-K’s filed by TII for the year ended December 31, 2003 or 2004.

On March 31, 2005 TII filed an amended Form 10-Q for the period ended September 30, 2004 and disclosed the following: “In March 2000, the Company entered into a license agreement with Research Frontiers Incorporated (Research Frontiers), a Delaware corporation with headquarters located in Woodbury, New York, for the non-exclusive rights to market windows which utilize variable light transmission technology developed by Research Frontiers. The agreement provides for the payment of a royalty of 5% of the net selling price of the licensed products as defined in the agreement to Research Frontiers for products sold by the Company that incorporate such technology. Additionally, the Company has agreed to pay to Research Frontiers an annual minimum royalty. On December 31, 2003, the Company amended the agreement to reflect the following schedule of annual minimum royalties: $75,000 in 2003, zero in 2004, $35,000 in 2005 and $100,000 in 2006. The royalty is payable in cash or shares of the Company’s common stock at the Company’s option.”

TII filed for the trademark of “Alter-Lite” on June 12, 2002, Serial Number 78135170 and was published for opposition on November 9, 2004.

The consultant compensation paid in connection with the TII agreement was not paid to Michael R. LaPointe, although one might think otherwise, as Mr. LaPointe was not an employee of RFI at the time. No transaction involving Mr. LaPointe as a consultant was identified as material in the Proxy filings.

In the 2002 Proxy, the following biography was provided for Mr. LaPointe: “Michael R. LaPointe, age 44, who is the Company’s Vice President-Marketing since March 2002, joined the Company as its Director of Marketing for Architectural Windows and Displays in March 2000. Mr. LaPointe, as a graduate of Brown University with a B.A. in Organizational Behavior & Management snd a B.A. in Psychology, worked in a marketing capacity for IBM Corporation in the early 1980’s. He subsequently founded and developed several companies involved in the application and licensing of new technologies for various consumer products. During that period Mr. LaPointe also worked as a management consultant, where in 1994 he began his relationship with Research Frontiers, assisting the Company with its marketing strategy. In accordance with applicable rules of the S.E.C., information contained herein regarding Mr. LaPointe covers the period starting when he became an executive officer of the Company in March 2002, except that compensation information listed covers Mr. LaPointe’s compensation for the entire 2002 fiscal year.”

RFI issued a press release announcing Mr. LaPointe’s promotion:

http://www.smartglass.com/pressreleases/press97.html

It may have been purely coincidence that Mr. LaPointe first became affiliated with RFI in 1994, the same year the company entered into a contingent stock option agreement with a consultant to purchase 25,000 shares of common stock that vested in 2000 when the TII agreement was signed, causing the company to incur the non-cash charge of $528,198.

When RFI determined it necessary to file an amended 10-Q for the period ended March 31, 2000 on March 31, 2001, they did not issue a press release, yet five days earlier the company announced the Board of Directors had authorized a 500,000 share buy back:  http://www.smartglass.com/pressreleases/press75.html

The following tabular recap summarizes the minimum royalties paid or agreed to be paid by TII as disclosed in TII’s Form 10-K’s or, in the case of the FYE 2003 data, in the amended Form 10-Q. No information was provided in the 2004 Form 10-K filed by TII:

A review of significant customers of RFI as reported in their 10-K’s for the years ended yield revenue approximations from these customers as follows, with TII highlighted in yellow:

Notice none of the reported significant customer amounts reported by RFI for 2003 agree with the amount reported by TII for 2003. Represents a known minimum royalty payment from Hankuk Glass Industries Inc., Korea's largest glass manufacturer. Hankuk also owed a minimum royalty amount for 2002 RFI has not identified. 

In the above tables I have highlighted the amounts that agree between the two SEC reporting companies.

In the year ended December 31, 2003, RFI established a reserve for uncollectible royalty receivables in the amount of $50,000 and increased this reserve by $32,522 in the year ended December 31, 2004. It is unknown whether any of the reserves is related to the TII agreement.