Q1 2021 Research Frontiers Inc Earnings Call
Okay.
Good afternoon, ladies and gentlemen, welcome to research Frontiers Investor Conference call to discuss the first quarter 2020 one 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 <unk>.
Question by pressing star one.
This conference is being recorded today a replay of this conference will be available starting later today and the investors section of research Frontiers website at Www Dot smart glass Dot 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.
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 the 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.
And some cases of the company has responded directly to email questions prior to the call or will do so afterwards and 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 question brief and the interest of time.
I would now like to turn the conference over to Joe Harare, President and Chief Executive Officer of Research Frontiers. Please go ahead Sir.
Hello, and thank you Paul and good afternoon, everyone and thanks for being here.
It was the first quarter of last year that the COVID-19 pandemic shut down the world economy now we are coming out of those shutdowns, but key industries, such as the automotive industry.
Still plagued with other supply chain disruptions.
As outlined in prior conference calls of our revenues and automotive were affected by two factors.
One of the industry wide production halt due to COVID-19, which also affected our revenues and the aircraft market and two of the end of the nine years that we were on the magic Sky control Smart glass roof option on certain models of cars within Daimler.
Revenues from the display and consumer electronics market were up quarter over quarter and our royalty income from the architectural market was stable compared to the same quarter last year.
Okay.
We expect architectural revenues to grow based on recent activity on new projects and this area and for activity and the automotive and aircraft markets to also rebounds and growth due to new projects using our technology and these areas as well as the restarting of the world economy.
Major disruptions outside of the pandemic such as the computer chip toward shortage that has caused many factories to slow down production considerably or even shutdown has not had a direct effect on research frontiers other than a small reduction and the number of Mclaren models coming off the production line with our technology.
<unk>.
For the most part the supply chain disruptions and the automotive industry occurred after the end of the current Mercedes models that offered our technology as part of the Magic Sky control sunroof option of the Daimler and prior to the introduction of new models coming up by Mercedes and other car manufacturers using our SPD smart glass technology.
So we are largely unaffected by these current chip shortages and the automotive industry.
And the meantime, neither we nor our hard working licensees of slowed down a bit.
Several of our licensees have also recently made major investments since the beginning of this year to increase production capacity of SPD emulsion film and and products for all industries. So everyone is preparing for success.
And March and April and even already and May new projects for SPD Smart glass have sprung up and various places around the world.
And if these projects use the amount of glass currently specified from smart glass the surface areas for just the architectural projects alone could exceed the usage of Mercedes and the Mclaren and their peak years.
Part of this increased level of activities of attributable to the world waking back up quite as attributable to cost reductions and our technology and making our smart glass more affordable to a wider group of projects and part can be attributed to the high level of activities not only by our licensees, but also by our.
Competitors, which have stimulated interest and activity.
One of our active competitors and the architectural spaces view.
I will spend some time discussing them today, because we received the number of questions since our last conference call from existing and even new investors and research frontiers, asking how we compare to them and since that last call day went public through a destocking process.
<unk> is scheduled to release their first quarter financial results about.
Six days after ours and <unk>.
The one look forward to studying these numbers.
Here's what I found so far since you started publishing their financial results for the first time I.
I think that youll find it and lightning and put our own results of operations and quite a favorable context and give you a better insight into one of the industries that were both of them.
View lost 441, and a half million dollars and 2018.
The last $290 million and 2019 on revenues of $24 $3 million and the last $257 million and 2020 on revenues of $32 $3 million.
There are 2020 loss was higher than the upper end of the range that I had predicted on our last conference call in early March.
To put this in context.
<unk> net loss was over 100 times larger than research frontiers, and they're projected to lose at least another $250 million of this year and next year.
One number that I focus on his views on reported data regarding their cost of revenue. This is the cost to generate each dollar of sales revenue, even before R&D and selling general and administrative expenses are tacked on.
And I found this number of interesting because these reported cost for each dollar of revenue and the fourth quarter of 2019 was $3 70.
The reported cost for each dollar of revenue increased to $3 and 81.
For all of 'twenty, and 'twenty and went up even higher to an estimated $4 and <unk>.
And the fourth quarter of 2020.
Yeah.
So I was scratching my head because the reported cost per dollar of revenue, it's going up and not down as one would expect and of normal business operation with the economies of scale kicking in and let's say he had either one production problems or to the cost of the raw materials went up substantially or three.
They were heavily subsidizing each project and charging customers less than one quarter of what it costs them to make and deliver their glass.
Perhaps it's a combination of these factors and we should get more insight on Wednesday, when they released their numbers.
Yeah.
So and the fourth quarter and order of review to generate $7 $7 million and revenue that revenue had a direct cost to view of $31 $3 million and their total loss for the fourth quarter to generate that $7 $7 million and revenue was $55.3 million.
That's roughly half the money that we've spent since inception.
Okay.
All in for the year, each dollar of revenue and 2020 cost view $8.36, making.
Making their loss on each dollar of revenue and 2020 over seven times the amount of their revenue.
Now in comparison, let's talk about our financial results.
Our loss this quarter was up once again, one one hundreds of used most recently reported quarterly loss.
Our lots of this quarter was $557000 or 11% lower than the first quarter of 2020.
And this lower losses quarter is coming off of the lowest lost at research frontiers had and over 26 years.
So there has been a constant moved towards achieving breakeven positive cash flow and profitability.
I have emphasized on our past conference calls together that it is important for us to make sure that we are operating as efficiently as possible.
To make being cash flow positive easier to attain.
And our expenses of continuously come down 2020 was the sixth consecutive year that expenses were lower than the year before at your company.
And 2020 expenses decreased by over $1.3 million and this trend continued in 2021 or.
Our expenses this quarter were also down 23% from the same quarter last year.
And because of our continuous reduction and our burn rate, which is now down to 400 to $450000 per quarter, we actually have and an estimated 32 months of cash available to fund our operations.
So our existing capital should take us into late 2023, before we would need to have more capital and we may never need to raise additional capital because as you will hear today, we expect many reasons for revenue increases this year and next year.
Over the past year, there were some very.
Major positive developments.
Our SPD Smart film licensee Gals, the announced last April of series C investment from Hyundai Motor Company and Avery Dennison.
Since then things have been moving even more quickly than originally expected with and Hyundai.
And as noted on our past conference calls and automotive we may cause more energy efficient.
C O two of emissions by four grams per kilometer and increase the driving range of electric vehicles by up to five 5%.
We also make people more comfortable and safer and protect the interiors of cars.
And as Bentley as noted in their public presentations about the future of Sun roofs within Bentley Theres, a greater need for smart glass roofs, because of the movement towards fixed non movable panoramic roofs and cars Bentley.
We noted that SPD smart glass can reduce weight and the roof by up to 13 pounds and eliminate the need for 54 components.
This reduces costs and further increases driving range and reliability, while contributing to the stability of the car on the road.
The first quarter of 2021 and brought US a major new announcement and automotive Cadillac announced in January that the new ultra luxury all the electric flagship vehicle.
The celestial and we'll be coming out and offering and SPD smart glass roof that gives passengers and the ability to control the amount of light coming into force segments of the large panoramic roofs panoramic roof on the less steep.
They launched the flagship celestial <unk> at CES, and we were pleased to see that almost the entire video.
About this magnificent and vehicle featured our SPD glass roof and subsequent articles have focused on our roof as well.
Gms all electric strategy makes us development, even more important to us and I expect that there will be other car models with MGM that use our technology using the Celeste sneak program as a platform for the development on many other cars within G M and.
And as was the case with Hyundai The press has been speculating that the Celestica will also come out sooner than originally expected.
Because of this newsworthy event since the end research frontiers has been interviewed by a major automotive publications, such as automotive news auto line and Ward's automotive these.
And these major automotive publications featured us and the benefits that we break the cards, especially electric vehicles.
Also I just learned that were appearing and chapter 15 of the book Jetliner cabins, which is the Bible on the.
The commercial aircraft interiors.
The.
These major publications featured us from the benefits that we bring to these vehicles and they.
Certainly of helped us carrier of the message about all the benefits of SPD smart glass broadly to key decision makers and the automotive industry and the aircraft industry.
And the media is helping us bring the message out just when all of the major car companies and the world are going all the electric.
We're also moving into many new areas one important new area that we moved into the higher volume segment of the automotive market with the lowering of the cost of our technology and new markets and automotive and the such as the high volume mid level market are now working with us.
And of course, the new fast growing market for electric vehicles around the world, especially as <unk>.
Pretty much every major automaker continues to announce their plans to become all electric and also new aircrafts such as the Airbus <unk> hundred 20, VIP jet Airbus has already announced orders for 15 of these transportation categories sized jets and each of these 820 aircrafts will have SPD electronically dimmable.
Does covering 50 structural windows.
In addition to the Airbus eight to 20, there are a number of other new aircraft models that have not yet been announced by our licensees and the aircraft industry.
The.
And licensees of our vision systems, and spec tech and ease of clamor.
Some of these are really cool by the way.
I've seen some amazing designs that really need smart glass other new areas.
More yachts and consumer electronics, and architectural applications and as I've mentioned in the past the architectural market uses twice as much of the world's glass as the automotive market smart homes and buildings are potentially our largest market as evidenced by the high valuations and some of our competitors are aspiring for just on this mark.
And that alone.
And as many of you know from prior conference calls with the opening of Galaxy's Stuttgart factory and the fourth quarter of 2019 and its current ability to makes SPD film one eight meters wide. This allowed us for the first time to practically address the large potential architectural market.
Yeah.
And that market has become very active and in connection with competitive bidding on some large architectural projects for S. P. D. We learned that we actually have gone from having of size disadvantage I'm, referring to the limitation on the Hitachi film, where they were only coding one meter wide to now having the size advantage over electrochromic.
And since they can do similar words to the <unk> film one eight meters, but have limitations on the height of the window and of course, the bigger and electrochromic window gets overall the slower it gets with 10 switching taking tens of minutes with electrochromic compared to two seconds or less with S. P D. Regardless of the size of our wind.
Dose.
I'm also pleased to announce to you today that even in the eight short weeks since our last conference call. <unk> has made further improvements and the efficiency of their motion line and Israel and their film coating line, and Germany and even as.
Made large investments to expand further their production capacity.
Some of our other licensees on the and product side of also made production and capacity enhancing investments.
Now let me take some other questions that our shareholders of set me.
We received by email before this call questions from investors and.
And.
We were going to address many of them today.
And here of some of the additional questions that were emailed to us.
Okay.
Is the plan and Stuttgart, Germany closed are operational and what.
The maximum production.
It's operational there was a brief period of time and.
The late December early January scheduled to coincide with holiday shutdowns anyway, where they were where Germany was closed for COVID-19 reasons, but it's opened up their maximum production on that facility is 1 million square meters of SPD film or any products using our <unk> film instead of.
Hitachi film Yes.
Yes, it's a lot of the automotive developments that we talked about.
Or are working with <unk> on the on those projects.
Also I just wanted a node and congratulate galaxy, they're appearing and glass China.
And Shanghai from today through Sunday, So of major glass event in China as well.
Yeah.
Another question.
Would it be easy to make chemistry to achieve 90% light blockage in the off state.
Would this be more neutral since.
And while still being about twice as dark as most architectural fixed and <unk>.
Jerry that's the that's a great question. So basically the idea of can we make the film where it's not as dark.
So that less flu may be transmitted and the clearer state and and the answer is yes and also if you go very dark you don't see any blue at all so because the reason that the windows of peer blue is that the blue light and day lighting as being trans.
Transmitted so if you.
If you make it really really dark and nobody is being transmitted and.
And we can do that by making the film coating thicker than you.
Youre going to have less bluish and this and if you make it lighter also of the same thing would happen so and the.
The answer to your question is yes matter of fact the.
And the Galaxy production line has the tolerance to coat plus or minus one micron and the the normal SPD film that's kind of the workhorse of the industry right. Now is the 90 micron and film being produced by Hitachi and Galaxy.
And the gas you can can adjust that and so Ken Hitachi and they have for certain applications.
Okay.
Moving to.
Another question and I'm sorry.
Yeah.
Also from Jared Albert would it be good for RFID, if the dynamic Glass Act became part of the internal revenue code would it actually provide of 30% tax credit for SPD glass that doesn't currently exist and other forms on the United States are there.
Currently tax credits for SPD, Leeds in the U S. For example, or other subsidies elsewhere and the world and is it likely that if it passes nationally states will also adopt tax credits for SPD do you think it'll pass and its current form.
Thank you and here's hoping government subsidy finally gets us going ESG is hard and virtue signaling is a critical market.
Okay and <unk>.
Great Great question and.
Let me first by state that it's almost impossible to predict any kind of political event in today's world or and especially in today's world, but this seems to be kind of of and.
The provision that makes sense and.
The way that.
Dynamic glass is defined as glass, which uses of electricity to change its light transmittance properties in order to heat or cool a structure.
And that's from the Senate Bill.
That's pending right now.
And it does have bipartisan sponsorship so that makes it also something that.
It makes it more likely that it's going to pass and that definition that I just read will in fact cover SPD technology.
So is it a good thing absolutely because what it does is it encourages people through the form of tax credits to install energy efficient improvements and their buildings.
And now, they're specifically calling out SPD, so from an economic standpoint, its definitely good for US also just from a general standpoint. The fact that dynamic glass is now being recognized as an energy efficient.
The improvement to buildings I.
I think is of major change and there are similar types of.
Of credits on the World and even.
And you know there of demand management incentives that come from local utility. So you have kind of a mix of private and public partnership to encourage this.
Okay.
Got a question from several shareholders about the company called notice.
And they're true <unk> technology.
I'll, just say that notice as a.
The company that was based in Singapore, The recently moved to Ohio as part of a check incubator the ray.
As the very modest amount of of capital.
And if you go on their website.
Because I was asked a little bit more about.
Is it a competitor to us or the galaxy and.
The answer is every dynamic tend to the potential competitor, but there's so many of you know.
Small startups that are trying to do things that have only succeeded and the lab and ive only seen on their website computer simulations and the other thing that I found very odd as I I had met with them in 2018.
And.
They sent me a presentation and oddly enough. The presentation included many of our SPD projects that they were passing off of their own. So we told them the stop that.
So I'll, let you judge from the fact that they have no working.
Samples of this on their website and you know their presentations, even as recently as this past October.
And we're using.
S P D.
Instead of their on technology.
And to demonstrate their on technology. So.
Take it for what it's worth.
Yeah.
Yes.
Our next question comes is there any schedule for day made to introduce at Sun Visor project product.
And then also there was a follow up about the new infrastructure, Bill, which we talked about.
And.
The answer is there are two timetables for the day May Sun Visor product. One is the one that's really funding the development of the product development within dye may and that's a specific vehicle within the auto manufacturer that this is for that.
That will you know, which is why they're able to do the corporate development they need to and then theres the aftermarket where.
And that could come out a lot sooner. So you have two timetables really to to watch there I did get a question.
From another shareholder if they want the smart glass for their homes and you know how do they.
Get in touch with the licensee or and installer and we've set up the system that automatically allows you to fill out of form with details about who you are aware of your project is and what it is and then it automatically goes out to all of the licensees that can.
Satisfy that and for the most part of our licensees of focusing on commercial projects, but we don't have to focus on.
On the ultra large commercial projects and also the you know the residential and certainly with and.
Their wheelhouse as well, although I may not be their initial focus.
On another shareholder asked about our stock price I don't usually comment on our stock price, but I do want to point out that the.
And the Russell 2000, and which we were included.
Included on last year.
And resulted in about the.
$3 1 million shares being bought by index funds that invest and the Russell 2000 companies as part of their charter.
That brought in a lot of buying.
And last April may and a little bit in June.
Well as you know the Russell became rebalanced and we were introduced on it back then in order to get on the Russell you needed a market value of I believe 96 million and I think our market value at the time was about $116 million. So you know we were well within the.
The you know.
And the cushion for inclusion last year.
Due to a lot of and <unk>.
Activity and the market companies that are going public through specs and the rise in market value of and <unk>.
Some of the you know.
Blockchain companies and other other types of companies the.
The.
Last analysis I saw was that in order to be included on the Russell 2000. This year you need of market value of about $248 million. So it's about <unk>.
Two and a half times the market value of last year because of some of this corporate activity that's been going on so I imagine that part of our stock as you know the reason it went down and the last month.
Or two as you know these reports get published by.
And by various.
Research and.
Firms and some of the hedge funds will trade based on that so if daniel of companies going on and they'll buy the stock which is what happened last year before we went on and if they know of company is coming off and a large number of companies that are coming off this year.
And they'll they'll sell the stock. So I think that's one reason and the other may be some tax related.
And you know because you know around this time now people's personal taxes are due.
And then another question longtime shareholders of the question for the Q1 'twenty one call suppose the company such as Sag on a single banner of PPG, or AGC, or possibly even Tesla or Apple offered to purchase research frontiers and its entirety, including the rights to all intellectual property can you.
We provide a range of what you would consider a fair price for the company. Many thanks, well I love the question.
Let me ask our operator now Paul to open up the conference to.
Any live questions that we have and answered already and remember if I have not fully answered any questions that were either emailed to us.
Uh huh.
Or and the live Q&A and my presentation.
Feel free to call or email me and you know and some cases of how to cut the question's a little bit short to leave time for more live questions today.
Okay.
About.
Projects from view and Sage that are very large projects that they've worked on.
Landing for of years, most recent was Walmart and they don't really give a lot of details other than the purchase price is $26 million for that.
Hi.
I do think that if the economics I alluded to earlier is that they're basically and.
They're basically spending a lot more for each dollar revenue that project may end up costs them over $100 million. So you know if they want to lose $75 million or $80 million on a project and.
And.
You know that's that's their decision it's not the way we are licensees do business and the same thing with with Sage and you know some of our licensees that compete with them on these projects are winning these bids because the performance is much better for S. P. D. In terms of switching speed range of light true.
Hans mentioned, the the variety in terms of which glass laminate or as you can use and the control systems are much easier to implement as well.
So there's a lot of advantages to going with the S. P D and the cost premium for you you know for having the best really is not much greater than the highly subsidized prices that some of these companies are doing and and also you know they need to find projects that have.
Very large lead times, you know some cases of your or two out if you look at kind of their announcement pattern. So so we're and much better shape in terms of that and just because the projects haven't been announced and we just don't announce them until you know there are a little more ripe you know we saw.
View announced the project about 14 or 16 months ago, and then re announce it again and and March you know so they tend to announce things as early as they you know as they can and and obviously when you're in the public markets trying to raise money that that helps ya.
Thank you.
And we have a question from.
Gary Carroll.
Your line of Yeah, Hi, good afternoon of Joe how are you.
Gary how are you.
I'm in South Florida.
Of course, I'm on a real estate market's on fire and and you know we hear a lot of outsmart homes and the builders here are are becoming more and more acutely aware of the smart home technologies I'm wondering what our.
Uhm market penetration is like and the U S a and the new smart homes.
Well, if I [laughter], it's funny, you mentioned, Florida I was recently there initially to discuss one project it turned out to be three projects and then fourth one was added as I was leaving so some of these kind of a fairly major uses of glass and if you go down too.
You know the Miami I haven't or.
Sunny and I always area you could see all of the construction going on there and our licensees like yeah, and our licensees like gals of your actually and some of those projects from the.
A while ago with their P. D. L. C project. So they know all of the developers and the and the architects and that area as well and they even opened up a special sales office and evident or which I had the opportunity to visit when I was down there. So there's a lot of activity there and you know you'll see a lot more of it.
So do you feel like we have a good I've got exposure on presence and the and the new.
And all of this new all of these new big buildings on the but smart glass going on yeah, I think that what's happening and I kind of alluded to this earlier Gerry is that.
Part of the really increase and activity.
Is coming from the fact that we have two very active competitors that are creating or creating excitement and the market and.
And.
And you know competition can be good matter of fact, when gals and he became a film licensee and.
Hitachi called and thanked me. They said this is really creating a lot of interest out there and.
Now and that's benefited Hitachi as well. So so you have some benefits to having and active market with the competitors they're spending.
Tremendous amounts of money to market.
But you know if if you're an architect or the developer worth your salt.
You know you're gonna do your homework and our licensees them and called in on the same projects that stage and view of been pitching and you know, they're they're doing well. So you know if [laughter], if you're faced with a a demonstration where the window takes 40 minutes the switch and another one where it takes two seconds to switch and you could use.
Any glass laminate or you want for that and.
No as long as there's not too much of a cost premium that becomes a a really compelling sales tool and you know.
Licensees of really good at the.
Presenting the benefits of S. P D technology and absolutely hopefully one of them may I have a connection with the related companies and Steve Ross down here, South, Florida, where you just mentioned all of these ginormous projects that they're involved with the.
Fantastic Fantastic.
Fantastic customer for Us Yep, Yep, and we know the related companies from New York and from Florida. So a lot of good stuff happening.
Excellent. Thank you very much.
Thanks, a lot.
As a reminder, if you do have a question. Please press star one on your Touchtone keypad now.
And our next question comes from August Berm and.
Your line is okay.
Hey, Joe how are Ya, Hey August how are Ya.
Hey, good good and just had a couple of questions I knew and you guys eliminate when the announcement was first made about Hyundai back in 2020, a day and.
Indicated and and an article of that their first project would be at by and never he the sun roof.
Is there anything you'd get down on that with <unk> with that.
And that kind of guy and still be.
And.
Holding here today I.
I think with most automotive applications, probably the you know the.
Low hanging fruit is definitely the the sun roof, because that's where a lot of solo he comes into the vehicle and and especially as you move now towards fixed panoramic roofs for you want to avoid the complexity and the cost and the you know the maintenance issues of having of sledding roof.
But you still want that open air feeling.
And you know and just goes back to the Bentleys presentation about the the the.
The son of of the future of it that badly.
You know that becomes even more compelling so it's the safe bet that senator of so we're always going to be very popular for the test P. D. Smart glass and you start to see now, though [noise] automakers, putting it and other places to like and the windshield above the a S. One line, where it becomes and embedded Sun visor and is.
You know Suvs.
And you can do what you want behind the B pillar and the United States and and Europe that also includes passenger cars. You. You know you can see it on the side and very of glass as well, but I think senator if they're always gonna be you know of safe that and and a very demonstrable benefit because of all of the sudden that comes and and how difficult.
Well that is the shade, especially when you get them to be very large sun roofs. The can't use the mechanical shade you know just because of the.
The need for a a very rigid shade, if you're gonna have a big surface area to to cover might as well just have the glass to the work.
Okay, and then just one of the one of the question I know and we're still we're seeing a bunch of our vehicles coming out on me and.
Electric manner, and then are showing rooms that are all kind of black is curb black and yellow.
And the S. P D and do the current black burst.
Of flat just flat flat and the room.
It's kind of black.
As well as costs and.
And a lot more vs that black glass process I I feel like I I've read some articles where people are saying or are we understand that and yet the the the ability to implement it and and a car of black and it's just not.
He's of all even though I know S. P. D can go on with the credit card of products. Yeah. The S class Coupe has a three dimensional curved roof and you know as you correctly pointed out a lot of the designs that are coming out now with the the electric vehicles also have you know very sleek elegant curved lines, including curved glass.
That's the one area, where we're really good compared to our competitors electrochromic of really flat glass only and that's why you see them really and and.
The only two areas one is architectural wear glasses, basically flat and and aircraft also where the you know the the non structural windows also flat so you.
You know they are where they can be.
And we can be and a lot more places including care of glass.
Great. Thank you.
Yeah.
We have a question from Alan Daenzer.
Your line is open.
Hey, Joe.
And and wondering.
I'm good how are you.
Good.
Alright.
Question about the <unk>.
You know any.
Plans that they may or may not have for going public.
And.
What would you think the chances are.
That they would if even if they haven't.
Expressed one way or another T U.
Well, if I knew about specific plans I wouldn't be able to talk about it I think that it's a natural evolution and their company at some point to become a publicly traded smart last company, especially when you consider that you know companies like view of of of 1.8 billion dollar Mark.
Goodbye you right now and I think that if you did of head to head comparison with either our business vs view or the houses business vs. View you know you would see that you know we're better companies.
Yeah, I have I got rid of the suspect for for round mouth worry at at view, but he has a tough job you know they [laughter]. They have very high costs. They have you know really some some limitations and and what they're doing and the good at raising money, although that market seems to of.
Dried up because if you look at one of his more recent public comments to the media and they asked him why did you go you know why do you do with Spock transaction and he said well we couldn't go public you know with the the traditional that's one and we needed the money.
That to me is is is the statement you know and and also if you look at kind of what's happened to the spec market.
Many of the specs, including viewer traded well below their you know their part of value of their of $10 you know.
Oh, yeah right.
Well, maybe if they made of deal with you first that would make the company a little more attractive.
And we we like Mark and we welcome we welcome everyone and and companies that were competitive alright and of ours, you know and the and the past have items.
And we're hoping to the.
Possibility.
Yep always good luck alright. Thank you. Thanks Allen.
And our final question comes from Ah Leonard leaps out.
Your line of though.
[noise]. Thank you.
Hi, Joe Hey Man I.
I was just listening to your earlier comment about the amount of cash that the company is would probably carry them.
Through to the third corridor. They are the only 183 day, yeah, Yeah, and I and I and I think judging from the way you said that you gave me think we we'd be proud of of cash flow by the end of would need it anyhow. However, right as I was looking there are options outstanding.
Currently from previous activities and if those were exercise, which indeed, they will be as of the stock moves higher that would raise and additional 7 million and almost anyhow. So you wouldn't need any outside financing.
Sure that and the <unk> that that's exactly.
Exactly correct, we don't we don't factor that and to you know counting the months cause we can't predict you're on stock price and whether the you know the warrants and and the options would be and the money, but I think it's the safe bet and.
Okay.
Thanks, a lot.
Yeah.
And we have some additional questions.
The first is from Seth Nickerson.
Your line is open.
Hi, Joe.
Hey, Seth how are you.
And I'm well I know you don't like to talk about things before the public.
I read on a per.
Public Board and Bell.
The military.
The contract.
No. If you wanted to talk about it.
But there was a lot of detail given out on this.
Public Forum.
Yeah.
I'm.
And I'm not familiar with the post so I can't really comment on it I mean, if you if you want to share a little bit more I'd be happy to know what's the.
The crusher, Microsoft patent that mentioned the SPD 118 times isn't it.
Like the military.
There there's the you know as I've said in the past.
You.
You can get a good idea of.
Where the activity is even if it hasn't been announced by following the who.
He was mentioning of some of their patents you know you see it and Hyundai you see it and Apple Yeah, you see it's pretty much at low.
A lot of major companies out there Tesla of all.
All of you know mentioned dust and their patents and and it gives them the factor with what they're looking at and the.
The contracts that I think 40000 units initially and then the 120000.
It sounds a little significant and then it's not big but it's not small.
Yeah No look.
The nice thing about our business also Seth is we don't have to.
Do capital expenditure in order to <unk>.
The address those markets, we have licensees that have the capacity to do that and you know they can make enough film to this and you know it's.
It's a nice business the way we've set it up because and as you can see compared to you know.
You know vertically integrated manufacturing companies like view.
There's a lot of things that can happen along the way and we don't have those same risks.
Alright, Thank you and I didn't want to push thanks, a lot. Thanks.
Sure.
Yeah.
And we have a question from Gary Carroll.
Hey, Joe and John I'm, sorry, I'm back again.
You want the address of the property that they're building out of Florida as EBITDA was it okay got it and I'm Gonna go down.
Check it out drive by.
Okay.
Actually.
Rarely reset and investor of the company I would like some clarification and pardon my ignorance, but what exactly is the relationship between research and Galaxy.
So.
Apart from having the same vision for the smart glass industry, which is there is the right way to do things and the wrong way to do it and we you know we've hit it off right away because we both believe that.
And <unk>.
Regarding our technology that is the best performing as the way to go on this market.
And you don't make compromises in terms of performance and quality to do that but the form of relationship is.
Galaxy is a licensee of ours, that's licensed to make SPD film.
For the entire industry. So they can sell it to.
Asahi for example, if they wanted to put it in the cars, where they can sell it to vision systems, if they want to put it and trains where they could sell it to.
And spec pack, if you want to put it and plains I mean.
So they are a key supplier that's licensed by us to supply the industry plus they have and then product license for architectural as well.
So they can make architectural glass, but their main focus is as of filmmaker and of material Science company. So that's really their the.
The strategic importance and they're a great company to work with I must say I mean, they and when you say licensee Joe as the.
The licensee so research frontiers is receiving.
Payment residuals.
We get royalty payments, we get royalty payments.
<unk> on product sales and just to give you a kind of a quick summary of the landscape.
For architectural aircraft Marine.
Pretty much everything, but automotive, we get a 15% royalty on product sales by the licensee to their customer and and automotive, it's 10% and that's public so I'm not sharing and okay and then I showed on <unk>.
And.
And there are a great company to work with you know when I met them. They had 50 employees. They have a maybe 130 right now and most of that has been hired and the investments they've been making based on S. P. D. So we couldn't ask for a stronger commitment from a licensee then the amount of people and money they've put into.
Property plant and equipment, and Germany, and Israel, and and the United States and other areas of the world.
Very well thanks for clarification.
Yeah.
Yeah.
Once again, if you do have a question. Please press star one on your touched on keep and though.
And we have no further questions in queue.
Alright. Thank you. Thank you Paul so I'd like to make just some closing remarks.
Over the past six months, we've had the opportunity to get a more detailed look at what some of our competitors are up to.
View at large losses, increasing costs associated with their revenue and their market value was down since they went public in March even so with evaluation at 1.8 billion their market value is still considerably higher than research frontiers and that tells me that investors see the great value of smart glass.
View focuses on the architectural market, we just started and that market and we are already seeing success.
We're also and additional major markets that they're not in such as automotive and aircraft Marine Museum, and consumer electronics and information displays.
These additional markets and further value in the market and revenue potential.
And their main market of architectural of use electrochromic glass takes 20 to 40 minutes to switch from most commercial size smart glass panels, our SPD smart glass can switch and two seconds, regardless of the size.
Does that mean that view has a bad business model or a bad technology.
Not necessarily time will tell.
But for now we can say that our business model is different and.
And we're quite proud of our leadership position and accomplishments and the smart glass industry.
At the end of our last conference call I took some time to list some of the areas, where we were either first and some where we're the only company to achieve things and our industry.
There were dozens of items on that list and it took over five typewritten pages, just the list them.
We can say that we're not only seeing traction and views main market architectural glass, but also markets that they are not in such as automotive with new cars coming out with our technology aircraft also with some exciting new aircraft coming out with our SPD smart windows.
And of course marine glass and.
The use of our technology and display systems consumer electronics and museums.
We discussed our operations and our markets and what we can expect for the coming year on today's call.
Now, let's talk about research frontiers, and investment and I don't usually do this but now you know there is.
A reference point.
This is what I've heard from and institutional investors first of all they liked the diversity of the markets that we're in automotive aircraft green buildings boats and consumer electronics.
They like the fact that we're and ESG company and the purest sense of that term, making us even more desirable and today's investment climate.
And we through our licensees are the only smart window companies of the world with the major footprint and all of these markets and industries.
Investors also like that we're now a firmly established cutting edge technology that its proven its performance and reliability buying me being used and tens of thousands of cars boats planes and now buildings.
Over 6 million people have experienced our smart SPD smart glass and that is a world record that continues to grow for us.
And our business model does not require a huge capital expenditures high levels of sustained losses from operations overtime or large payrolls.
And I ask how do you value of this.
For the first time, our industry is a public valuation reference point and the smart window industry.
And last check view out of market value of $1 $8 billion and this company zone and the only one of the five markets that we operate and.
We're pleased that investors and the smart glass industry, finally have a basis of comparing shareholder value and operational efficiency.
And these areas as well as the top performance of our SPD technology, you will see that our company delivers quite a bit more value stability and operational efficiency to our shareholders.
And because of the five markets that we're in.
And our prospects are quite good for delivering vastly more value to our shareholders, especially when one considers the rapid expansion of the market for electric vehicles, and and and energy efficient buildings.
Once again and automotive aircraft yachts consumer electronics and now even in the architectural market where were being specced in when the customer wants the best performing and best quality windows, they're selecting SPD smart glass.
And the last year, we doubled the number of automakers are of putting SPD smart glass on their cars to new automakers made public moves towards adoption of SPD smart glass and one of the world's largest aircraft manufacturers did the same and additional ones remain to be announced by customers and our licensees.
For the past several years, we've been publicizing the benefits of SPD smart glass to multiple industries the.
World is going Green, we make buildings and their internal HVAC and illumination systems more energy efficient we.
And we make people safer healthier and more comfortable.
A number of recent project and the architectural building space of unique designs that are enhanced and perhaps only possible using smart glass.
And the World is going electric and our SPD Smart glass technology will make those cars travel further on the charge enhanced safety increased comfort and give drivers and passengers alike and unforgettable driving experience.
Let me leave you with some statistics.
The future of transportation is coming pretty quickly.
This year of research Frontiers, Edmonds says that we'll see 30 electric vehicles from 21 brands, that's up from 17, EV models and 2020.
And the Boston consulting group predicts that Evs will account for more than half of the light vehicle sales by 2020 six.
Yeah.
And as our investors I'm pleased that you will be part of that green building future and that electric vehicle future.
I want to thank you again for your support and.
And I look forward to talking to you and.
And our next conference call.
This concludes today's conference call. Thank you for attending.
Yeah.
Okay.
Okay.
The House has ended this call goodbye.