Research Frontiers Incorporated

Good afternoon, ladies and gentlemen. Welcome to Research Frontier's investor conference call to discuss the fourth quarter of 2022 and year-end 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 1. This conference is being recorded today. A replay of this conference call will be available starting later today in the Investors 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 made 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 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 pound one. Also, we ask that you keep your question brief in the interest of time. I would now like to turn the conference over to Joe 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 of 2022 and year-end investor conference call. I'm going to keep things more informal than usual today because I want to open up the floor to questions and discussion. We built off a number of very positive developments in 2022 and started 2023 off quite strongly. Gauzy had their largest booth ever at CES this past January and moved into the prestigious Automotive West Hall. Major worldwide customers such as Boss, LG Display, OST, Talgo, and Continental joined them with various products, mostly for automotive aircraft, trains, and boats, but also showing architectural applications. And that was just the first day of the show. That night, the CEO of BMW at his opening keynote speech at CES, aided by Arnold Schwarzenegger in person, and David Hasselhoff remotely, showcased BMW's iVision. The car was equipped with its glass all around being SPD smart glass. Also highlighted prominently in Oliver Zipsy's keynote and BMW's press releases was a heads-up display that added vast functionality and readability because of the SPD component. You can read more details in the press releases about this, but I was there at CES from the beginning, and some of our shareholders had even visited. You could see SPD at the Gauzy booth as well as other places, and it was impressive and prevalent. Moving to another active licensee, AGP has visibly expanded its operations to now be headquartered in Belgium, close to many of its European customers. They have several SPD car models coming out this year. They also expanded in Flanders, and they also have an amazing highly automated smart glass factory in Ghent, Belgium. I visited it, and it was really impressive. We also focused on position your company well over the past several years. I mentioned in one of the previous calls in response to questions about economic uncertainty how research frontiers had positioned itself to be somewhat recession-proof and certainly inflation-proof, and that continues, and I guess it's been well that we have done that because those things seem to be lurking or here. We are also patient and because of that we ultimately went over the customer. Many of you that have followed the smart glass industry might be aware that both Mercedes and Ferrari both used another smart glass technology before switching to SPD. And this year we expect another OEM that originally selected another switchable pin technology to switch over to SPD. Usually the OEM ultimately understands that not all smart glass technologies or the company supplying them are created equal, and we foster this by education, continuous improvement, data, having a high-performing technology, focusing on being a profitable business, and constant refinement of our business model, as well as good partnerships and cooperation with our licensees and a drive to reduce costs and to diversify the industries we're in. We and our licensees are constantly tapping into and fulfilling the need of customers to offer solutions to their customers and enable them to deliver new and improved and innovative products. And with that brief introduction and recap, I will now turn to some of the questions that we received by email.

Tom had asked,

Last conference call, you said that, quote, all indications are that GM is growing SPD or will pretty much in those words. Can you give some details on this and why do you believe this? Do you have any specifics on that that would be important to investors? Well, let me first by saying that General Motors has adopted SPD's smart glass and their flagship electric, the Celestic. And they've announced... continuously now their EV strategy, which is to really introduce a number of much higher volume EV vehicles, you know, starting this year. Why am I confident that they're going to expand into other things? Well, simply put, they told me. I'll give you a little bit of the background. Initially, I spoke at a conference on switchable, well, on glass in general, automotive glass in general, And the head of GM's glass and roof systems attended my presentation and then attended the breakout session that I had hosted. And we spoke afterwards. And about a year later, he told me that they had several car models that they had slated SPD for and asked my advice as to how to proceed with that. And, of course, I gave it to them. And, you know, they have a number of vehicles that are coming out after the Celestique, but This is their flagship. This is their bespoke model. It's hand-built, and, you know, it's a beautiful car. Another question Tom had asked, please talk more about Hyundai, the magic roof, as this was out on the Internet. I know you can't get too specific. And basically, I spent a lot of time on the last conference call speaking about Hyundai as a company and about, you know, the Grandeur, the GM7, and some other vehicles that they have. What I'd like to do now is just focus on what's in it for them, what's in it for Hyundai. First of all, to the extent they put this on internal combustion engine vehicles, they're going to save four grams per kilometer in CO2 emissions, which is very important, especially in Europe where there's penalties for not hitting CO2 targets. And in general, their fleet will have better gas mileage by using SPD smart glass. If they put it in the electric vehicle area, you're going to get an estimated 5.5% increase in the driving range. And then, of course, you get the halo effect of having what's on Mercedes, McLaren, Cadillac, and Ferrari. So those are reasons that I think Hyundai is on a good path with that. Another question came from Chuck. I'm going to try just to use first names here just to preserve some privacy. With the dynamic Glass Act passed and other progress happening, when are we going to see a significant number of SPD windows in offices and other buildings? And I'm going to ask you, Chuck, to hold that question because I will answer it in my closing remarks. But then the other question you asked, you know you had is about the dynamic glass act itself and certainly that changes the dynamics for the better because it's offering a 30 to 50 tax credit for adoption of smart windows such as spd so it makes the economic equation that much better for people adopting it this is from david many licensees have patents for various spd uses do these license licensee patents significantly hinder the implementation of SPD by other licensees. Well, one of the things that we wanted to make sure of is that it wouldn't hinder other licensees from using improvements that develop over the years. So every one of our license agreements has, and you can look at Section 10.4, usually, of the license agreement. There's a license back, David, that that basically when the license terminates or expires, we get rights in all of the IP related to smart glass and SPD.

Another question came from William.

It says, the CHIPS Act with the focus on Made in America brought about by the CHIPS Act, are there any ramifications for research frontiers? Well, we have a number of U.S.-based manufacturers, so to the extent that there's economic advantages for manufacturing in the U.S., our licensees all have operations here, and also we have some licensees that are only in America. So that's good. Okay. This comes from Jeff. Several of the EV makers are in financial difficulty and some will not last long. This will limit use to the major automotive companies, which are harder to gain entry as their planning starts years ago. How do you assess the current market? And then Vue is in financial difficulty. How does that affect you? Okay, well, let me kind of take both questions. So one of the advantages of being in the licensing business is that we can afford to be nice to everybody in the electronic, you know, the electric vehicle industry. So we really don't have to pick and choose who we work with because, quite frankly, nobody knows which EV makers are going to be successful and which ones aren't. There was even doubt years ago whether Tesla was going to be able to make more than 10,000 or 20,000 cars a year. And You know, they've gotten their act together, you know, quite nicely. We expect there to be shakeouts, and, you know, I'm a student of business history, and you probably, if you think back to the turn of the 20th century, there were so many car makers, most didn't make it. So you want to cast a wide net, but being a licensing company, we can. The other part of your question is about if this starts moving only towards established car companies, how does that affect us? Well, one thing I would say is that our bread and butter has been the established car companies, Mercedes, McLaren, General Motors, Ferrari now. So the fact that we've proven ourselves both from a reliability standpoint, which is something that the existing car makers certainly admire and respect, has been very beneficial to us. You know, we have a long track record, and it's one that is a prestigious track record. And if the electric vehicle market ends up going to the established carmakers, we'll do well. If it goes to some newcomers, we'll also benefit. As far as your question about review and their financial difficulty, yeah, they are not doing very well financially, and we'll probably learn more on March 29th when they have their year-end conference call, which is pretty much the last minute. But they've been somewhat of a negative force for the entire architectural smart glass industry. First, they've had financial and accounting issues. Plus, it's very hard to figure out what a smart window should cost because they've been heavily subsidizing their sales to customers, which is why they ended up losing $260 million last year. So, You know, they are doing what they can as well. Not too much to say other than I wish all of our competitors well. They create a great reference point for a better performing technology and a real business. Another one comes from Judy. I recently came across this TechCrunch article claiming that the passenger's display portion of the Celestique mega screen is will incorporate SPD privacy blinds to minimize driver distraction. Is this fact or fiction? Well, you can't always read what reporters will say, but I will say this. Some OEMs are working with SPD to minimize driver distraction. And for now, the only thing I'm sure of is that SPD Smart Glass will be standard on the Celestic roof, but we certainly have had broad discussions with GM about the benefits of SPD. So, Nothing here would surprise me on that.

Okay, I think we answered most of those questions from John.

Robert, is Resinec previously known as Shoah Danko and Hitachi Chemical an active licensee producing and selling HPD film? Also with the passing of the IRA, REFR architectural glass licensees experienced a material increase in inquiries and sales. Bob, thank you for the questions. Yeah, the Inflation Reduction Act, or as it was titled when it was introduced, the Dynamic Glass Act, certainly changes the economics of buying smart glass or putting it into small and large office buildings and residential buildings. buildings and also homes. As far as your question about Hitachi Chemical, as we noted in our 10-K, Hitachi Chemical had sold their division that was doing the SPD film to Showa Danko, and it's now been rebranded as Resonac Corporation, and they continue to sell film into late 2022, but we think that, you know, because this division is part of something that just kind of moved from company to company to company, there's the possibility that they may reduce or wind down that business because of this. However, that shouldn't affect us because of Gauzy, whose film is comparable in performance and in many cases better than the original film, and it's certainly less expensive, which expands the market. But thank you for that question, Bob. Okay. This is from... Claire, I recently saw an ad for an electric BMW that had a sunroof that appeared to be using SPD technology, although the technology was not mentioned in the ad. Do you know if this was SPD technology? Originally, they were using something else, but more often than you could imagine, and I kind of alluded to this before, the OEMs soon realized that other switchable glass technologies like PDLC or electrochromic has problems, and as I mentioned, we're selling a new OEM this year for this very reason. So I think that's good that they're experimenting with things. I think ultimately when they do the high-volume production and they want the real stuff, they'll use SPV. And I also just want to thank Matt for his kind words about a dear friend who we lost, Ron Rosato. Ron was a long-time shareholder and broker and really was an amazing person and I've spoken to Ron many, many times and I wish his family well and that he rest in peace. I think at this point we've answered most of the questions or all the questions that were emailed to us. So what I'd like to do now is have Paul open up the floor to any live Q&A that people might have that we haven't touched on already. And then afterwards, I'm going to make some closing remarks here.

If you would like to ask a question, please press star 1 on your telephone keypad now. You will be placed into the queue and the order received. Please be prepared to ask your question when prompted. Once again, to ask a question, press star 1 on your phone now. And our first question comes from Leonard Lietzow from West Planning and Design.

Your line is open.

Thank you very much. Good afternoon, Joe. Hey, Len. How are you? I'm doing well. Thank you very much. A question. I think I was reading that Gauzy was going to be going public. with an IPO probably in the first quarter. Number one, is that true and will it happen?

I read the same article you did, Len. And I think ultimately, Jouzy's goal is to go public. I think it has many benefits, one being it gives visibility into their strength as a company and provides expansion capital. And a lot of large OEMs like to know who they're dealing with. And, you know, Gauzy has, you know, some very well-heeled investors such as Hyundai and others that I think, you know, would welcome a strong supplier like that. I can't comment on the timing of that. I think that For a long time, I think we all realized that the IPO market has dried up, but we're also seeing that it's beginning to thaw out, and good companies like Gauzy, I think, will do very, very well when they do go public. So I'm going to limit my comments to that. I probably know more about this than anyone outside of Gauzy and maybe even more than some people within Gauzy. Let me just limit my comments to that at this point.

A second question, then. I know that they have increased the amount of emulsion that they have been making. That was announced almost a year ago. Right, the 5x increase. Yeah, the 5x increase in their capacity. It has to be going someplace. So, you know, isn't that going to push us towards positive earnings per share relatively soon?

Yeah, I'm delighted that they're making that investment that's going to benefit not only their investors but our investors as well. And, you know, I can't say enough nice things about Galsy. They really are an amazing company that, you know, really is doing smart glass the right way, and that's what originally attracted us to them is that we both shared the same vision as to where this market can go if it was done right.

And are you content with where it's going and the speed with which it's getting there?

I'm never content with that. I was born in six months, Len. So, you know, for me, waiting is not top on my list of virtues. But on the other hand, I think it was very important that we and GALSY does, you know, do things the right way. You know, you don't want to have either bad starts or false starts with a new technology. And I think that that has proven, you know, to be a good approach for us. And when companies haven't done this, we've seen companies like you that, you know, really run into tremendous problems and, you know, some of them can end up killing the company. So I think it, you know, you want to do it right, and they're doing it right, and they're making the investment to do it right, and they're hiring people to do it right. And if you look at kind of their hiring patterns, I think you'll get a real good feel as to not only what they're doing but where they're planning to do it.

With the Glass Act having passed, I think the credits start hitting in January of 2024. Is that still accurate, or if they order now, do they get the benefit of this?

I think you have to put it in service by then. So, yeah, so you won't miss out if you do it in 2023.

Oh, but that would be very good for us.

Yeah, very much so. Very much so. Okay. Thank you, Joe. Thanks, Juan.

Thank you. And our next question comes from John Nelson, private investor. Your line is open, sir.

Hi, Joe. Hey, John. How are you doing today?

I'm great. Thank you very much.

Mike, I've got a couple of questions, but the first one is kind of a broken record question as far as any updates on the visor. The windshield visor?

Right. So that actually has started to incorporate itself into some vehicles already in a built-in sun visor. And a lot of the test vehicles that we do, the concept vehicles that we do, have that kind of concept already built into it. And, you know, in McLaren's case, they actually put it into the windshield itself. As far as the fold-down sun visor, you know, that's moving forward, but mostly... targeting the aftermarket. And until that gets introduced, there's not much I could say about it other than it's being worked on by several licensees, and I think it's a good application. Okay.

Great. And then this next one you may or may not be able to comment on, but it looks like we're set up at REFR for a significant jump in revenues in 2023. Is that a reasonable assessment?

I think if you look at the, and this is, by the way, I don't know if anyone noticed, but in prior conference calls, I used the F word without mentioning the name of the car company. But for the first time in our 10K and in our press release today, I mentioned Ferrari. And I was really pleased that earlier this week, Ferrari started saying that cars are being delivered to customers. And actually, one of the Puro Sangue customers reached out to me indirectly to say how excited he was to get this smart glass in his car. It's between what we have with McLaren and what we have with Cadillac and what we have with Ferrari and what, you know, is coming out in Asia. And as I mentioned, it's not just one carmaker now. It's two over there that are unrelated to each other. I think a lot of people have assumed that, you know, Hyundai and Kia, you know, I view those kind of as joined at the hip, even though, you know, they're separate companies. But I'm talking about yet another company in a different part of Asia that also looks like it's coming out with, an SPD product as well. So, yeah, I think we're going to have a good year. The jump in revenues, because a lot of these cars don't come out until towards the end of the year, may happen in the third or fourth quarter. Okay.

But, yeah, I think we're on a positive trajectory here.

Excellent. Thanks very much. Thanks, John. And our next question comes from Michael Kay from Kay Associates.

Your line is open.

Okay. Hello?

Hey, Michael.

Hello, Joe. You know, I'll tell you, I've been a shareholder for well over 20 years and a very, you know, proselytizing the SPD and the company. But, you know, it's getting a little tired and old because it seems that even though you indicated you've reached a sweet spot regarding the cost of SBD film and we have Gauzy, but it seems, you know, quarter after quarter, the fee income really is pathetic. And given the fact that SBD is the best flight control technology on the market, and that the costs have been down to the extent that it's a sweet spot, using your words, I still can't understand why there aren't, you know, architectural firms, other car manufacturers. Many of these car manufacturers, many of them, it's just like concept cars. What about getting SBD into the lower-priced cars that you indicate could be the case?

Yeah.

Yeah. Okay. You know?

Yeah, well, every car maker I mentioned is not a concept car this year. These are actual serial production cars. And I think people that are following the industry will look at a mid-level car manufacturer like Hyundai as being the potential to vastly increase the volumes. Now, if you're a farmer and you plant crops, you could stare at the ground for a long time, but each crop takes a certain amount of time to grow. And we've planted a lot of seeds, and this year three or four of them have already started to grow, and one or two unexpected ones also came in that, you know, I think you'll hear about. So, you know, all good stuff. But I think you'll hear in my closing comments, you know, some things that you might find also useful with respect to all of the markets but also architectural.

Okay. don't most companies want there to be more than one source of film? And if you said that Hitachi basically, you know, most of the film production would be from Galaxy, which is fine. Previously, you said you were looking for a U.S.-based company that could manufacture the film.

So is that still... Well, I never said U.S.-based. What I said in the past is that you're looking for a second source and it's probably going to be you know, co-located near their major customers. So that may be in Asia, maybe in South Korea, maybe in Europe, maybe in the United States, depending on where the volumes are. But the licensees make those kind of decisions about where to put their production facilities. And I think that part of this also is that if you have competition among the glass laminators, you know, which we do, we have pretty much the who's who of the glass industry, then you'll – then you'll satisfy the diversity requirement that a lot of people in the automotive industry feel comfortable with.

What about Panasonic? Has there been any progress regarding displays and their use of SPD?

Yeah, I think when you look at Panasonic, you should really look at who's supplying Panasonic, and that's LG Display, and we've spoken about that. You know, they've had a very strong presence. with SPD and their transparent OLED, which is a remarkable technology. I mean, if you see this in action, it's mind-boggling how good it is. And it certainly is an attention-getter. And, you know, typically LG makes the displays for Panasonic and a number of other, you know, display manufacturers as well. So being there is very helpful for us.

Going with the market and planes and trains that – Seem to be on the upbeat, but it hasn't been.

All going very well. All going very well. I mean, if you look at CES, for example, Talgo, the Spanish train operator, had SPD. We were in the Deutsche Bahn train. We're in a number of things. We were in Japanese trains. So, you know, pretty much around the world you're seeing SPD adopted for trains and other transits. I must say that having Vision Systems as a licensee in that area has been extremely helpful because their focus from day one has been on trains and transit and buses and all of their other ancillary businesses, whether it's the safety tech business or their electronics business, they all focus on providing high-end solutions to those industries. It's really good to have someone that is that knowledgeable about trains and mass transit vehicles involved.

Okay. I hope that we wouldn't have to wait another 20 years before the stock, you know, performs in a way that correlates with people's confidence in the technology and your management.

Okay, thank you. And, you know, it could be worse. You could be involved with either View or Crown and lose 95% of your value in the last year. But, you know, we're holding steady in a market that's very difficult, and we're in an industry that we seem to be, you know, the dominant player in now. So, you know, whether we have competition or not, we're going to continue to do things the right way.

Okay, thank you.

Thanks. And as a reminder, if you do have a question, please press star 1 on your touch-tone keypad now. And our next question comes from Gerard Sherman from Strategic Planning Group. Your line is open.

Hey, Joe. Thanks for taking my call. The question for you is just surrounding the revenues. I was hoping you could kind of help me understand, not necessarily from a guidance standpoint, but what it's going to look like going forward being that if we're in some planes and trains and yachts and a few, you know, high-end cars that produce probably very little numbers and we're pulling in $130,000 in revenue, you know, what does it look like if we get somebody that moves 50,000 cars a year or 100,000 cars a year from, like, a price point? What does that look like from a revenue-wise for us?

Okay, great. So... First of all, let me just kind of back into the question a little bit. So revenue this year, when you exclude one time and special events and things like that, was roughly the same as the prior year. And all of the cars that are coming out haven't been reflected yet in our revenue for 2023 yet, because they're all coming out in 2023. They weren't in series production in 2022. Okay. If we took the original kind of estimates that we had when Mercedes was doing this, we were getting between $150 and $225 per car in revenue, in royalties for that. Since then, fortunately, the price of the technology has come down quite a bit. And I'm thinking that probably a good estimate to use for your back of the envelope calculations you know, would be anywhere from, you know, $75 to $150 per car now in terms of royalty per car. So if you multiply that by someone putting in 50,000 cars, you know, you'll see that that can make us profitable.

Now, isn't the size of the glass, I mean, the original ones we were just looking at a standard sunroof. Now the entire roof is glass. That doesn't improve the numbers for us?

It could, in that you're dealing with a larger piece of glass, but on the other hand, a lot of the cost that goes into any kind of glass product, whether it's switchable or not, is the fabrication, so the interlayers and things that go into it. If you're spending labor dollars to lay up a laminate piece of film, whether it's smart or not, that's going to cost you money, and it won't be as much on a larger piece of glass as a smaller one but there'll be some difference but yeah it's certainly a benefit that you know sunroofs are becoming bigger and bigger so you get the panoramic roofs or the the ones that go from the um you know the windshield all the way to the back of the car like you see on the model y and some other vehicles and what's good about those panoramic sunroofs that are basically all glass roofs is that the car makers have realized sometimes after the car goes into production, which is another opportunity for us, that you can't shade something that big with a traditional mechanical shade that pulls across, like you see on a typical sunroof. So you need something else that can shade it. Now, in the beginning, they used heavily tinted glass to do that. But if you're putting such a heavy tint as to manage the solar heat gain inside of a car, you might as well just have a metal roof. So they're beginning to realize that they need a switchable. And the switchable also has the added advantage in that you're actually reducing weight. So even with a normal, Bentley did these calculations years ago, a typical roof, if it went from a moving roof to a stationary roof that had smart, SPD smart glass in it, and that's the example they used at their presentation, would save about 56 components and about 13 pounds of weight in the roof. And saving the components is actually a significant cost saving because it's really the cost of assembly that's the cost of a car, not necessarily the cost of the components. So, you know, we are not only more reliable because there's no moving parts in a SPD sunroof, but, you know, we should also help save, you know, money for the carmaker. And then, of course, you get the other benefits, increased headroom, you know, reducing the cabin temperature by 18 degrees Fahrenheit and other things like that.

So the slow adoption of it you don't think has anything to do with it being too costly of an item because they're saving it elsewhere? It just seems like such a good product. It's taken forever to be adopted. And Tesla, you know, how does Tesla not use it? You know, it's stuck to these high-end products. It's like, wow, I mean, no one's going to touch it? That's in a 50,000, 60,000 range?

If you look back at the transcript of this conference call, you'll see that I said earlier on that eventually everybody adopts SPD. It's just a matter of us having the determination to make sure. And, you know, I wouldn't be surprised if Tesla was one of those OEMs that also did that.

Okay. All right, great. Thank you. Appreciate it.

Thanks, Jared.

And our next question comes from Art Brady, a private investor. Your line is up.

Hi, Joe. Art Brady here.

Hi, Art.

Can you comment on the AGP factory that was established? Was this built on exactly the same factory?

specs of the uh doodledorf that was uh built by a galaxy or it's their own configuration it's a different type of factory but it's a good question all right so um they do share one thing they're both highly automated factories so very low labor costs the gent factory in belgium that agp has is highly automated i mean i walked through this thing and We saw three engineers that were just looking at some monitors to make sure that everything was working okay. It was, you know, and if you think through it, what does that mean? It means that all of a sudden now you could approach Chinese labor costs because you don't have labor. And also the consistency and the reliability of an automated system, you know, once you make the investment in automation is quite, you know, quite good payback because you you're making a very expensive piece of glass, you want it to be good each time it comes out. And if you look at some of the videos on AGP's website, you'll see some amazing things that they've been able to do with our technology in their glass. The Galaxy factory makes film, which is a totally different process. It's a roll-to-roll web where you're coating an emulsion on a moving web of, you know, ITO-coated PET and then curing it with UV. And so it's a different process than what AGP is doing, which is taking that film that they would buy from Gauzy and putting it between two sheets of glass and using a hot melt adhesive like EVA or PVB or polyurethane to laminate that stack together into a laminated piece of glass.

About two years ago, you were in a club of, with some of the Ghazi people, and I'm wondering what the status is, if there's any movement there, and when we might expect to see some revenue from that experience that you had in the Middle East.

I think you're going to see revenue from them from all over the world. They have a very strong presence in the Middle East. They have a very strong presence in Asia. all parts of Asia, actually. They have a strong presence in North America, and they're expanding all of these. I mean, I'm privy to what their plans are, and I don't think they're doing this because they like the climate. I think they're doing it because they like the customers where they are. So, yeah, we all expect very good payback from this investment that they're making all over the world.

When do you think we could actually start seeing some revenue in that regard?

Well, you know, if you look at where, you know, they have the factory in Stuttgart that is making the film, it has the capacity to do a million square meters of film. And if they needed to replicate that elsewhere in the world, they can. And they've quintupled their emulsion production. Those are probably the best leading indicators I could give you as to where I think their business is going. And, you know, if they are, in fact, going public, you know, they're not doing it based on having a Me Too PDLC product. They're doing it based on a SPD product, and that's the strategy for growth at Gauzy, too.

Joe, I wanted to ask you about these train accidents. Does Gauzy work? Any of your groups have any types of products that they could sell to enhance the safety of trains instead of them falling off the tracks as they've been occurring pretty frequently?

Well, both Galaxy and Vision systems have very sophisticated sensor systems, and I wouldn't be surprised if, you know, some of those things could be deployed, but You know, if you think about, you know, the tragedy that happened in East Palestine, you know, it was ball bearings that heated up. It's not anything to do with heat coming into the cabin or anything like that, but they do have electronic sensors that might have been helpful. But, you know, if you look at the tracks in the United States, they were a mess. You know, so I think you have to fix the roads that these trains go on before you fix the trains.

Yeah, I understand.

Yeah.

Have you heard of a company called Cellular Window Tech? Are you familiar with them?

Not very familiar. There's a lot of companies out there that are trying to do things in energy efficiency and generating power through transparent photovoltaics. You know, we like them. They're complementary technologies because, you know, if you look at what, for example, Vision Systems did years ago, they were partnering with a French company that had a transparent photovoltaic material that they were able to make a self-contained aircraft window where you would just pop it into the side of the window. You didn't have to wire anything and it would generate 20 times more power than it needed to operate the smart windows so you could charge your cell phone or other devices, you know, using solar energy. But there's a lot of companies like that are trying. Some are homegrown in the United States that we've spoken to, and, you know, they have promising technologies. And we keep track of them, you know, because we don't need a lot of power to run a smart window. So any of these photovoltaics, especially the transparent ones that don't typically generate a lot of energy, still can generate enough energy to to power a smart window, and then the real benefit there is you could pop this into a building or a home or a vehicle without having to wire it up, and that eliminates the need for electricians to be on site, et cetera.

Thank you.

Thanks a lot, Art. Good talking to you.

And our next question comes from Michael Forster, private investor. Your line is open.

Joe, thanks for answering all the other questions.

Since I'm the last in line, I think I've got enough information now.

Okay, great. Thanks, Michael. I think we have one more in the queue at this point.

We have a question from Tom DiGiavo, a private investor. Your line is open.

Yeah, hi, Joe. First of all, I'd like to thank you for your efforts. Hi. I think you're really working hard towards the right things. It's tough. It's a new product. It's got to get into the market. But anyway, the EV9 and the Grandeur, as you know, were mentioned with the magic roof. It's not been mentioned lately, but it sounds like Hyundai Kia is a possibility. The EV9 has been noted that it's going to come out with some info on the 15th and perhaps more by the 30th. I know you mentioned Kia SUV stuff. Without getting too specific, it's coming out soon, some info on it. Do you see this as a car that looks like it could very well likely have SPD?

I think that it's a prime candidate for SPD, but I don't think it's going to be first, and I'll tell you why. I think that if I was Hyundai, you know, I would probably reserve to myself first, you know, the good stuff. before I gave it to my sister company, Kia. But, you know, you never know what the internal politics are between that. But they basically joined at the hip, and I think that the work that Hyundai is doing with SPD, you know, and they're a direct investor in Gauzy, which I think is important to know, I think will benefit Kia as well. Okay. I just don't think the EV9 will be first. Look, I could be wrong. I've been wrong about other vehicles that, you know, in trying to handicap which ones were going to come out first.

So something as soon as this month you wouldn't be well aware of by this point?

I would think that if it's, you know, it would be, I don't think it's going to come out this month. Yeah, no problem.

Yeah, so thanks for the answer.

As far as the grandeur... By the way, Tom, that doesn't mean that it won't come out on the EV9. It just may not be a You know, it may be like a mid-model introduction or something like that.

I got you. I got you. Are you able to say if, you know, BLS was working on the Grandeur sunroof in a roundabout way because they're working with Gauzy or not necessarily?

You're talking about a different company that we're very familiar with that is working on that project with.

Yeah, okay. Okay. All right. Thank you, Joe. Appreciate it.

Thanks a lot, Tom.

Bye-bye.

And if there are any final questions, please press star 1 on your touchstone keypad now. I think we have one more in the QIC. Yes, sir. We have a question from Tom McCartney from Raymond James Financial. Your line is open.

Hi, Joe. My question's already been answered.

Okay. Thanks, Tom. Okay. Thanks, Tom. Good talking to you anyway.

Yeah. Same here.

And we do have one that just joined the queue, and that's from Jeff Harvey at Private Investor. Your line is up.

Hi, Joe. Hey, Jeff. How are you? I joined late, but my question is related to GM, Ford, and Stellantis. I mean, I know it takes a long time to get in their queue. for their electric vehicles. I just wondered if you can give us an update on progress with those big companies.

Sure. And I actually read your question earlier and answered it. But I will say this, that in a nutshell, because of the track record we have with Mercedes and McLaren, being in the other established automakers is actually a positive thing because They respect reliability more than anything else, and that's certainly what we've had in our DNA since 2010 with the automobile market.

What about cost, though? I mean, is cost a factor for these mid-range, you know, inexpensive cars? Is that what's holding up the dollar for this?

No, I wouldn't say that now because if you think about, you know, The expectation is that Hyundai is going to have this, and those are not very expensive cars. So I don't think cost is going to be the issue now. I think you have the benefits that become cost-effective when you don't have to, you know, when you can eliminate 56 components and reduce the weight in the roof to increase the stability and increase the headroom and things like that. So there's a lot of things that go into cost. But also the basic cost of these smart glasses, far lower now, with the Gauzy film than it was with the Hitachi film. So that's also enabled a lot of things to happen. But also, you know, I will say this, just because I gave some time to your question earlier. Okay. Once you hear the replay, if you still have any questions, you know, feel free to call me on my cell phone. I'm happy to go through those. That's fair. Okay. You're always welcome. You're a long-term friend, so I appreciate it. Yep.

Okay, Joe. Thank you. Thanks, Jeff.

And we have no further questions in queue. I'll turn the call back over to our hosts.

Okay. Thank you. So I'm just going to make a few closing remarks. You know, every day we all probably wake up and we ask the same question. Why would you invest in research frontiers? And If you want to invest in the smart glass industry in a proven technology that's used across diversified industries, then we think the best place and actually the only place to get all of those benefits is Research Frontiers. If you think of Research Frontiers as a materials company that has worked to develop an extensive patent portfolio with hundreds of patents on a basic material, It's as if we have a patent on stainless steel or titanium. Smart people out there then figure out how to use our materials as a solution to everyday problems, basic human needs, heat control, light control, glare control, safety, security, privacy, comfort, enhancing product performance. These are the things that our technology has allowed these companies to do. And, you know, we invite you to check the box of things that we've thought about and taken care of already. We have a strong and growing product pipeline, mostly automotive, but also trains, planes, boats, consumer electronics, and architectural. Expanding upon that, we've become known in the industry as the best performing technology in this area and the most reliable. Our competitors have lost 95% or more of their market value, another reason to think about where you want to deploy your investment if you're investing in smart glass. So I think they're also helping us become known as the most financially viable player in the smart glass industry as well. And we also have the who's who of the glass, automotive, yachting, and aircraft industries involved with us as customers. So it's not just our competitors that make us look good. We've worked hard over the years to build and maintain credibility and establish ourselves as the industry leader. And as I mentioned, we did this by paying attention to a lot of things. And we've done this through financial stability. We have cash for at least the next five years and no debt. This gives us plenty of the necessary resources, but we're smart enough to know that we want to spend these resources efficiently. We have diversification of industries. a proven reliability for 12 years in the automotive industry. And in our industry, that is quite a long time and very compelling data that everybody respects. Research Frontiers is well positioned for a recessionary and inflationary environment. We talked about that, I think, two conference calls ago. I was drawing upon my background as an economist at the Federal Reserve Bank in New York. And having gone through both recession and high inflation, when I was there, you saw what happens in the world and what you can do to navigate through that. And I think that's been helpful for our company to have that perspective. We also have a healthy mix of business and government and commercial customers. And experience and respect and credibility and longevity as a company, which I think is good as far as how suppliers view us or as customers view us, rather. We have good partnerships. had a good business model with high rewards, predictable expenses, and low CapEx requirements. And we're expanding our use into new applications like TVs, headlights, adaptive grills, heads-up displays. You've seen all of these happen very tangibly in the past year by some very well-respected companies. And this year, I think you'll see more of this, but in different areas that can also address very large markets, like architectural glass. Look for us later this year to talk about exciting developments in areas such as impact-resistant, hurricane-resistant windows for the architectural market, and even the ability to retrofit existing buildings with SPD Smart Glass so that installation is quick, with minimal disruption to building owners and tenants, and with lower costs. So with that, I want to thank everybody for participating on today's call, and I look forward to sharing more good news this year with all of you.

This concludes today's conference call. Thank you for attending, and have a pleasant day.