Research Frontiers Incorporated

Good afternoon, ladies and gentlemen. Welcome to Research Frontiers investor conference call to discuss the fourth quarter and year end 2021 results of operations and recent developments. During today's presentation, all parties will be in a listen only mode. And following the presentation, the conference will be open for questions by pressing star one. This conference is being recorded today. A replay of this conference will be available starting later today in the investor section of Research Frontier's website at www.smartglass.com and will be available for replay for the next 90 days. Please note that some of the comments made today may contain forward-looking information. The words expect, anticipate, plans, forecast, and similar expressions are intended to identify forward-looking statements. Statements that are not historical facts are forward-looking statements that are pursuant to the safe harbor provisions that are part of the Securities Litigation Reform Act of 1995. These statements reflect the company's current beliefs, and a number of important factors could cause actual results for future periods to differ materially from those expressed. Significant factors that could cause results to differ from those anticipated are described in our filings with the SEC. Research Frontiers undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. The company will be answering many of the questions that were emailed to it prior to this conference call, either in their presentation or as a part of the Q&A session at the end. In some cases, the company has responded directly to email questions prior to this call or will do so afterwards in order to answer more questions of general interest to shareholders on this call. If you find that your question has been substantially answered as a courtesy and to allow time for other shareholders to ask their questions, please remove yourself from the queue by pressing star two. Also, we ask that you keep your questions brief in the interest of time. I would now like to turn the conference over to Joel Harari, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Thank you, Paul. And hello, everyone, and welcome to our fourth quarter and year-end 2021 investor conference call. I also want to welcome our board of directors, Daryl Bagel, Alex Gavranovic, and Graham Settle, who are joining us today as well. Let's review the past year together and look forward to this year and some exciting developments that we expect to happen in the next nine months. This year, we showed our lowest loss in 27 years. For the third quarter, we even earned a profit. something no other smart window company has ever done. The company's C income from licensing activities increased by $434,584 or 52% for 2021. Total annual expenses decreased by 304,000 or approximately 9% in 2021. 2021 was the seventh consecutive year that expenses were lower than the year before at Research Frontiers. The company's net loss decreased by $494,512 to six cents per common share. The net loss for 2021 was Research Frontier's lowest net loss in 27 years. We're also in strong financial condition. We continue to have no debt. And as of December 31st, 2021, we had liquid assets of about $3 million and working capital of approximately $3.7 million. The company expects to have sufficient working capital for at least the next 22 months of operations. And as you'll hear later, this will probably last longer because we expect increased revenues from automotive in the second half of this year. That 22-month estimate does not factor in these additional revenues. Some of the highlights from this past year include increased revenue from automotive. Also, now that Gauzy is shipping wider SPD film, we saw the beginning of shipments of SPD smart glass for architectural projects. This year, there are also significant new projects in the aircraft industry, including the ACJ-220 program by Airbus, Comlux, and Vistons. Airbus has already announced orders for 15 of these transportation category-sized jets. Each of these A220 aircraft will have SPD electronically dimmable windows covering 50 structural windows. Aircraft manufacturer Epic also started delivering jets to customers with SPD Smart EDWs. And last month, a merger between two of our licensees, Gauzy and Vision Systems, was announced. This was a transaction that had our full support and one that I had personally worked on with Gauzy and Vision Systems for the past two years. it created the largest internationally diversified smart glass technologies manufacturing company in the world. Gauzy raised $60 million in a series of de-financing to acquire and fund the growth of the newly combined company. The combined entity now has over 70 certified industrial partners, five dedicated manufacturing sites, 14 global offices, international subsidiary six continents, and customers in over 50 countries. It also has over 60 patents and 20 unique categories. It has 180 employees globally, plus $50 million in 2021 revenues. So let's discuss now some of the other developments in 2021. Let's start with our largest market. In autumn, we kicked off 2021 with an announcement in January by Cadillac at CES which highlighted a four-quadrant SPD smart glass roof and their flagship all-electric Celestique. Also in automotive, there was a new government contract in the area of specialty automotive. We also had continued and growing use of our SPD smart glass technology in serial production with McLaren, and more upcoming models are also being discussed with them. McLaren has told me that the SPD smart glass roof has very high take rates, and is quite popular with customers. Prestigious publications with millions of readers each have highlighted the range-extending benefits of SPD's smart glass in this, the Celestique, and other electric vehicles with a highly coveted 5.5% increase in driving range. They also noted the significance of grams per kilometer reduction to emissions when SPD's smart glass is used in internal combustion engine vehicles. And these are not the only benefits. We also make people more comfortable and safer and protect the interior of cars. And Bentley noted that SPD's smart glass used in fixed non-movable panoramic roofs in cars, which is the trend, can also reduce weight in the roof by up to 13 pounds and eliminate the need for 54 . This reduces costs and increases driving range and reliability while contributing to the stability of the car on the road. The benefits of SPD Smart Glass were discussed in many prestigious automotive publications, such as Automotive News, Autoline, the Detroit Free Press, Wards, Automotive News, and others. More recently, we've been on the Automotive News daily news program, First Shift, so on the widely followed Daily Drive podcast. And just last week, we had an article here in Wards Automotive. And I invite all of you to check out some of these articles and videos on our website and social media platforms. And with our strategic benefits in the areas of electric vehicle range extension and reducing CO2 emissions in internal combustion engine vehicles, we have certainly gotten the attention of the automotive industry, both car manufacturers and their suppliers. I note that Hyundai and Sekisui and others heavily involved in the automotive industry made substantial investments in our industry through equity investments in our license Gauzy. Now let's talk about other important developments and other key markets for our SPD smart technology. This year, you also saw a giant display manufacturer, LD Display of Syria, combine their transparent OLED display technology with SPD film to make vibrant, high-definition displays and televisions that turn into clear windows at the touch of a button. These were exhibited at the Munich Auto Show, showing use of these products in automotives. and at the January 22 CES in Las Vegas, showing the consumer electronics use of this product. One recent report indicates that LG has moved forward with plans for a new TV with a 55-inch transparent OLED SPD screen that's intended for the home entertainment market and slated for release in 2023. This fall, you also saw BMW introduce in Munich a stunning concept car using SPD Smart Glass to control the look and output of the car's headlights. Other new areas such as more yachts, consumer electronics, and architectural applications have also grown. And in trains, our licensee Gauzy delivered SPD Smart Train Glass to their customer Rehau for the Deutsche Bahn Idea train. Rehau is a large supplier to the train and other industries. with over 20,000 employees. And trains use a lot of glass, and SPD Smart Glass has preserved views on such iconic luxury and sightseeing trains as the Shikishima train in Japan and the Rocky Mountaineer trains in North America. And the Deutsche Bahn train opens up SPD to a much larger new market, commuter and regional transport trains. And since our last conference call together, SPD Smart Glass was shipped to yet another large train project for a series of commuter trains. Now, let me pause and take some other questions that our shareholders have sent me by email.

Some of them I addressed in our general presentation, but here are the additional questions that were emailed to us.