Research Frontiers Incorporated

Good afternoon and welcome to Research Frontier's investor conference call to discuss the second quarter of 2026 results of operations and recent developments. The company will be answering many of the questions that were emailed to it prior to this conference call in their presentation. In some cases, the company has responded directly to email questions prior to this call or will do so afterwards. There will be a live question and answer session after the company's presentation. 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 those detailed in our SEC filings. Research Frontiers assumes no obligation to update or revise these statements. The call is being recorded and will be available for replay on Research Frontiers website at smartglass.com for the next 90 days. I would now like to turn the conference over to Joe Harary, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Thank you, Paul, and good afternoon, everyone. I'd like to welcome all of you to our second quarter 2026 investor conference call. And before I begin discussing the current quarter, I'd like to start by talking about our last conference call. Many of you have noticed that unlike virtually every other conference call we've held over the years, we did not have a live question and answer session. Some shareholders criticized that decision, and I understand why. The reason wasn't because we were trying to avoid questions. In fact, throughout our history, we've devoted an extraordinary amount of time to answering shareholder questions, not only during our conference calls, but also before and after them by email and telephone. And I estimate we've probably spent more time in open dialogue with shareholders than many companies our size. But the decision last quarter was driven by timings. At the time of our last conference call, there were significant court proceedings underway involving our principal licensee, Gowsey. We believe it would have been inappropriate and potentially harmful to speculate publicly while those proceedings were still unfolding. Judges generally prefer that important matters be resolved in their courtroom rather than in the court of public opinion, and we believe the responsible course was to allow that legal process to move forward. Today the situation is much clearer than it was three months ago, and so rather than simply reading mostly from a prepared script, I'd like this call to be more of a town hall meeting. I'll spend a few minutes discussing where we are today, what has happened over the past several quarters, and perhaps more importantly, what has not happened. Then I'd like to devote most of our remaining time to answering your questions. Out of respect to your fellow shareholders, and so we can answer as many live questions as we can on this call, I ask that you try to keep your questions to those that are of general interest to shareholders. When I step back and look objectively at the past nine months, I think it's important not to lose sight of the bigger picture. We spent the last several quarters dealing with an extraordinary situation. But let's be clear about what that situation actually was. And understanding this is important because it explains almost everything that has happened over the past nine months. It was not a technology problem. It was not a product problem. It was not a customer acceptance problem. It was not a competitive problem. It was fundamentally a supply chain disruption resulting from the financial restructuring of our principal SPD film manufacturer and licensee, Calze. Everything that followed flowed from that one event. And making that distinction is important because it explains both the challenges we experienced and why we remain optimistic about the future. Sometimes companies and their investors become so focused on what did happen that they lose sight of what did happen. We did not lose confidence in our technology. We did not lose our intellectual property. We did not lose our automotive qualifications. We did not lose our development pipeline. We did not lose customer interest. And remarkably, we did not lose the major programs already underway. In fact, what impressed me most over the past nine months was the patience shown by our customers and the hard work by our licensees. These are sophisticated global companies with many alternatives available to them, yet they remain committed to SPD, and that tells me something very important. They understand the unique performance advantages SPD technology provides, and they continue to believe those advantages are worth having and worth waiting for. I think that patience is perhaps the strongest independent valuation of our technology that we could have asked for. Another proof point came from something that occurred during this very challenging period. We actually entered into a new license agreement with Klein, a division of New York Stock Exchange listed company Polaris and a globally recognized leader in premium motorcycle equipment to develop SPD applications for motorcycle helmet visors and sports goggles. Think about what that says. During one of the most difficult periods in our industry's recent history, another company carefully evaluated SPD technology, evaluated our intellectual property, evaluated the markets they wanted to serve, and decided that now was the right time to become a Research Frontiers licensee. companies don't make long-term product development decisions based on technologies they don't believe in. They do so because they see opportunity. And that agreement wasn't just another press release. It was another independent validation of where SPD technology is headed. Many people have asked what has management been doing during these past several quarters, and the answer is simple. We haven't been standing still. While Galaxy worked through its restructuring, we continued to support them as well as moving the business forward. Development of black SPD technology continued. Another encouraging validation came from the CEO of LTI or AIT, the company that developed our retrofit product for the architectural market. He not only remains enthusiastic about the opportunity for SPD retrofit products, but also personally participated in our February friends and family financing. I believe that's another indication that people who know this technology best and know our industry best continue to have confidence in where it's all headed. Our retrofit product for the architectural market continued to advance and is well positioned to move forward as film production returns to normal. And we continue supporting automotive OEM programs. We continue supporting aircraft programs. In fact, two major new programs were won during this period. We continue working with our licensees and customers around the world. We continue strengthening relationships with existing customers while adding new ones. And we continue managing our expenses carefully while preserving the financial flexibility necessary to position the company for future growth. In other words, we didn't spend nine months waiting. We spent nine months preparing. We spent nine months navigating through the challenges that Gauzy faced and helped them and their customers and their industries move forward. Some investors have asked, why don't we simply establish another SPD film manufacturer immediately? It's a reasonable question. And historically, Research Frontiers has had only one commercial SPD film manufacturer at any given time. First Hitachi, then Jowsey. Producing automotive-grade SPD film is not like purchasing an off-the-shelf commodity. It requires years of development, substantial capital investment, highly specialized manufacturing expertise, and perhaps most importantly, consistent quality that automotive manufacturers demand.

Could there be additional film manufacturers in the future?