Research Frontiers Incorporated

and welcome to the Research Frontiers Investor Conference Call to discuss the first quarter of 2025 results of operations and recent developments. The company will be answering many of the questions that were emailed prior to the 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 the call or will do so afterwards in order to answer more questions of general interest to shareholders on this call. Some statements today may contain forward-looking information identified by words such as expect, anticipate, and forecast. These reflect current beliefs and actual results may differ materially from those expressed due to various risk factors, including details in our SEC filings. We prescribe here as soon as an obligation to update or revise these statements. Today's call is in listen-only mode with a Q&A session to follow. To ask a question, press star 1. The call is being recorded and will be made available for replay on Research Frontier's website at smartclass.com for the next 90 days. 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 1. Also, we ask that you keep your question brief in the interest of time. I will now turn the conference over to Joe Harari, President and Chief Executive Officer of Research Frontier. Please go ahead, sir.

Thank you, Erica, and hello, everyone, and welcome to our first quarter of 2025 Investor Conference Call. Let's start with our financial results. I'm pleased to report that the first quarter of 2025 marked another strong period of revenue growth and momentum for research frontiers, driven by increased demand for SPD smart glass, particularly in the automotive sector and also in the aircraft sector, with growing interest in new projects in the architectural market. Our royalty revenues in Q1 2025 were up over 79% to $560,000. This was an increase of more than $246,000 over the first quarter of 2024. Also significantly, royalty income was up 214% or up $382,000 sequentially from the previous quarter Q4 2024. This increase was primarily the result of higher royalties from the automotive market, up 128% compared to Q1 2024, and up 267% compared to our previous quarter, Q4 2024. Revenues from the aircraft market were also up sequentially in Q1 2025 compared to the prior quarter, Q4 2024. And we expect revenue in all market segments to increase further, as new car models and other products using the company's SPD smart glass technology are introduced into the market. As a consequence of these factors, our net loss was $177,687, or one cent per common share, for the three-month end of March 31, 2025, and this was $265,000, or 60% lower than the first quarter of last year. Turning to our financial condition and liquidity, we continue to manage our resources effectively. As of March 31st, 2025, our cash and cash equivalents sit at approximately $1.4 million, and our working capital was approximately $2.3 million. We continue to be debt-free. Based upon our current operations, we believe our current cash and cash equivalents would fund our operations for more than the next five years. We do not need to raise capital at this time and do not anticipate doing so unless there is a strategic reason to do so. We continue to see progress and significant developments across our markets. Our SPD smart technology is currently licensed or used by many major companies serving five major application areas, aerospace, architectural, automotive, marine, and display products in almost every country of the world. I've been asked about other technologies being used. You know, when I first joined Research Frontiers, the head of LBNL Laboratories, in charge of the Smart Window Project, told me to keep an eye on two companies who are the most advanced in the world, Asahi and Isoklima. At the time, both were focusing on electrochromics, a competitive technology to SPD. It's telling that both are now active licensees of ours for SPD Smart Glass. You know, along the way, many other companies became frankly roadkill on the side of the smart glass road. Some crossed over to us, like Asahi and Easter Klima. Some asked us to bail them out. I won't name names. And some stubbornly stuck to losing technologies with the hope of breakthroughs and miracles that have eluded them for decades. Two companies in our industry filed for bankruptcy this past year, Vue and Helio, while another has gone relatively quiet in the markets. and has yet to come out with even a rudimentary smart product. Throughout these industry challenges, research frontiers never wavered from our mission. Our success stems from having the best performing smart glass technology paired with a low-risk business model that preserves our upside while encouraging diversification and a robust global footprint. A recent example of the benefits of our approach was highlighted in Gauzy's recent press release about the lack of any meaningful impact of tariffs on their business. And this is something I had also indicated with our business on the last conference call in March. And we've received a number of questions about this that were emailed to us. This also further demonstrates the logistical advantage of our film technology. It also certainly reinforces the strength of our business model and of the strategic partnerships we've built. We've spoken in the past about key developments in the automotive market. Worldly increases in the sector were a major driver of our Q1 growth. We continue to see significant momentum in automotive, with new car models expected to be introduced in 2025 using our SPD Smart Glass technology. Q4 saw the introduction of the SPD Smart Glass for the Cadillac Celestic, and Q1 2025 showed somewhat higher sales to Cadillac. The production call-outs by Cadillac point to significantly higher royalties from GM in our current second quarter of 2025 as production ramps. Similarly, we had strong sales from Ferrari in Q1 2025 and expect strong sales from Ferrari for the current quarter, Q2 2025, based upon their production call-outs to our licensee. Also, I think everyone was pleased to see from our press release in April and also Gauzy's that Mercedes is back in the picture with their luxury van that debuted at the Shanghai Motor Show. What's unique here is, one, that it is in an area other than the sunroof, and two, it is unique in that it uses in the side windows a combination of SPD PDLC on 75% of the van's glass. Now let me take a question that was emailed to me from Mr. Erdmann. What is the advantage of a dual-stack smart glass combining SPD and PDLC over SPD only? Well, SPD by itself works fine for shading and privacy. But when you want privacy with light coming in, and remember, we're dark in privacy, you might want to use a combination of the two. And also in areas where you're projecting an image, it's somewhat more like a movie scene in a theater with PDLC. So it's a visual effect sometimes with displays that you want. That becomes less relevant, by the way, in a world where most of the displays are embedded inside the glass and things like transparent OLEDs, which is a very interesting market for us. On prior calls, I mentioned new car models in Asia, Europe, and in the U.S. These are still on track. And while I can't discuss the details yet, we have also landed another European car model to the mix since the last conference call together in March. Revenues from this are not reflected in our first quarter royalties. Yesterday, I received several email questions about the electro-traumatic roof on the new 2026 Corvette, and I can't provide any details about that at this time. It's up to GM to decide to what extent they want to talk about this. In the architectural market, we are excited about the potential for growth. We have begun work on private projects utilizing SPD Smart Glass. We are looking forward to the launch of the retrofit application, and our licensee in this area has projected a strong second half of this year. We also believe what we believe is a game changer for the industry is the retrofit application by significantly simplifying installation, reducing costs, and minimizing disruption while upgrading building envelopes to make them smarter and more energy efficient. And supplying government buildings is a very large opportunity, and regulatory support such as the Dynamic Glass Act, which offers substantial tax credits of between 30% and 50%, should help the private sector adopt SPD smart glass in buildings and homes as well. Jeff H. emailed me, What is Research Frontiers doing to tell a story because it sounds like you have one to tell? Well, we certainly do. One thing is we've been working very closely and that's increasing with Galaxy to get the word out. They have substantial sales and marketing resources and we coordinate with them. They're also quite good at social media and other digital marketing and we coordinate with them as well on this as well as business development. And we recently had some high-level discussions about doing even more together. We also know we needed to update our website, and we did more than that. It's been totally redesigned, and we'll be working on the final pre-launch steps this weekend and expect to go live by early next week. And I think you all are going to love it and find it a great tool for sharing information with others. And by the way, our web address is smartlast.com if anyone wants to check it out or peek in maybe over the weekend. Several shareholders have asked about what catalysts we see for our company, our revenue, and our stock price. Jared asks, do you see a catalyst or a combination of price, performance, and availability that finally meets the value proposition, or does success remain out of reach? I think that the steady improvement, Jared, that we've made in the growing revenues and approaching break-even, while others in our industry have failed, certainly means that we are on the right track and nothing is out of reach. And I'll talk more about this in my closing remarks later. But certainly the catalysts are happening in terms of price performance and availability of the product. As I mentioned, we've included some of the questions previously sent in by our shareholders in the presentation today. And with that, I look forward to answering the questions that I've not already answered in the course of my presentation. And we ask that you keep your questions limited to questions of general interest. We can only talk about specifics. after the call. And if you want to get into more specifics, you can do so by email or calls offline. I'll now ask that our operator, Erica, to open up the conference to any additional questions people participating today might have that we haven't already covered.

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