Q2 2021 Research Frontiers Inc Earnings Call
[music].
Good afternoon, ladies and gentlemen, welcome to research Frontiers Investor Conference call to discuss the second quarter 2021 results of operations and recent developments.
During todays presentation, all parties will be in a listen only mode.
And following the presentation. The conference will be opened 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 the research Frontiers web site at Www Dot Smart class Dot com and will be available for replay for the next 90 days.
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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 <unk>.
Significant factors that could cause results to differ from those anticipated are described in our filings with the SEC.
Research frontier.
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 E mailed 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.
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I would now like to turn the conference over to Joe Harare, President and Chief Executive Officer of Research Frontiers. Please go ahead Sir.
Thanks, Paul and good afternoon, everyone and thanks for being with us today.
We have a lot of developments to talk about today and there'll be a lot of new information discussed today and also I'll be reviewing some information that our longer term investors may know.
Which will be helpful to new investors, who are worried about this thing called the smart window industry, perhaps because the view where crown becoming public companies recently and wanted to know how research frontiers and SPD Smart glass technology compares.
Our financials are fully explained in our 10-Q filing and our press releases. So other than to note that we made significant further reductions in costs, let's dive straight into the new business developments for your company.
This year there have been major developments in each industry that uses SPD smart glass, we're going to focus on automotive architectural aircraft and trains and other mass transit I also wanted to give.
To help give everyone points of reference so that you can better put all of these developments into context, let's start with automotive major trends include a very accelerated push towards electric vehicles today.
Today, the U S government announced their target of 50% of all vehicles sold in the U S being zero emission vehicles by 2030.
Since our last conference call a number of additional automotive Oems announced that Theyre going all electric this is happening now almost weekly.
Why is it is important to research frontiers.
Because our SPD smart glass can increase the driving range of electric vehicles by up to 5.5%.
This is quite significant range extension that will come in addition to any advances that occur and battery technology.
Companies are announcing carbon neutral targets, we reduce C O 2 emissions by up to 4 grams per kilometer.
So while the world converts from internal combustion engines to electric vehicles and other zero emission vehicles, all vehicles can still benefit from using SPD smart glass.
This not only gets carmakers are longer term environmental benefit but in Europe. It helps them avoid current regulatory penalties of 95 euros per gram per kilometer that their fleets.
Don't meet.
The tightening emission standards, so with 4 grams per kilometer of Cotwo savings, that's 380 euros per car or about $450 per car and savings folks.
In a few weeks the IAA show auto show will be held in Munich.
Many of us debt have been in the auto industry for a while used to know the IAA has the Frankfurt Auto show, who is the largest auto show in the world.
This year SPD smart glass is expected to be shown in multiple locations there.
We will be sharing whatever details we can about this with all of you as the Munich Auto show gets closer.
I think but that by now everyone on this call on those at Cadillac launched their all electric flagship this less stieg <unk>.
Yes. This past January the launch highlighted the fourth segment SPD smart glass roof that gives arguments more control over the light entering the car.
Use of SPD Smart glass sunroof has been well proven in serial production starting in 2011 with Mercedes and then Mclaren.
Mercedes test data showed that the use of SPD smart glass and just the sunroof can reduce cabin temperature by 18 degrees.
Instead of getting in a car and it being 90 degrees inside it is 72 degrees without using the air conditioning.
This allows carmakers to reduce the size of the air conditioning compressors by up to 40% reduce weight and increase driving range on fuel economy.
Bentley then took this idea even further and noted in their public presentations that use of SPD smart glass and a full panoramic stationary glass roof can reduce weight in the roof by 13 pounds and eliminate 54 components.
It also adds inches of headroom and by reducing the weight on the roof lowers the center of gravity of the car. So SPD smart glass not only saves energy assembly complexity on time and wait but it also improves the stability of the car.
Yeah.
1 of the things I like about our business is that we have about 250 patents on a basic material that has great functionality.
Customers are constantly figuring out new ways to use that material to achieve their goals.
Expected at the Munich Auto show visitors to the booths of other carmakers not yet mentioned today, another automotive automotive suppliers will not only see the more traditional uses for SPD smart glass, but some use as never before as shown in the industry.
Another major trend besides electrification energy efficiency in light weighting is the movement towards enhancing the passenger experience comfort and safety, we're always important to carmakers, but now as we move towards more towards self driven vehicles it becomes even more essential.
And we're not just talking about autonomous cars, but also trains in aircraft.
And not just traditional aircrafts like the Airbus <unk> hundred 20 that we're on but also rotary aircrafts like helicopters and some recently added prod projects for SPD and V T O L and even electric aircraft.
Some of you might have noted an announcement last week by our licensee Gals you about train glass delivered to their customer rehab for the Deutsche Bon idea train.
Rehab is a large supplier to the train in other industries with over 20000 employees I started talking to them in February 2019 about use of SPD in trains and I'm really pleased to see this important development for the training industry.
Trains use a lot of glass and SPD smart glass is preserve views on such iconic luxury and sightseeing trains is the schick assimi trained in Japan, and the Rocky Mountain near trains in North America.
Deutsche Bond train opens up SPD to a much larger new market.
<unk> and regional transport trains I expect that more information about this train and its use of SPD smart glass will be announced shortly.
Yeah.
Okay.
Okay.
Our licensees go head to head with view on Sage and bidding on smart glass projects for the architectural industry. However, theres. Some noted performance differences between electric Chromic technologies, such as that offered by view on Sage and our SPD Smart glass technology.
First electrochromic technology and architectural sized windows can take as much as 40 minutes or more to switch tent depending on the size of the window SPD Smart glass takes 2 seconds to switch 10 and could get much darker than electrochromic.
Okay.
The change in Teignmouth SPD, it's perfectly uniform throughout the entire window, whereas electrochemical glass has an iris effect, where the window begins to change tint at the outer edges of the window and slowly works for 10 change to the rest of the window.
Architects are getting smarter and asking to see large samples of electrochemical glass. So they can judge for themselves the speed and uniformity of tent.
Nothing out there compares to SPD smart glass in terms of our speed range of light transmission and uniformity of change.
Yeah.
And now that our licensee <unk> has a coating facility in Germany dedicated to making SPD light control film. That's 1.8 meters wide. We also do not have the same size limitations at electrochemical glass has in its manufacturing process and.
And because electrochemical glass needs to be sputter coated directly on glass.
This not only creates sides and handling issues and limitations, but also limits the shape that the glass can be fabricated SPD smart glass has appeared in rectangular square circular triangular and even trapezoidal glass and architectural projects Sage and view had to turn down these types of projects because of.
On the practical manufacturing limitations that exist with their technology and their manufacturing processes.
And of course, there are yield issues that it's caused very large losses for them on projects.
Last quarter have you lost over $50 million I believe that there'll be reporting their second quarter results next week or the week after it should be very interesting.
With that.
Said.
Said, let me now take some other questions that our shareholders have sent me.
John Nelson had emailed me the question any progress on your film producers, bringing down the cost curve.
Absolutely John the facility in.
In Stuttgart, Germany that gals he has.
Can produce film at a fraction of the cost debt the prior.
Film production facility that Hitachi chemical had can do and it's 11 years Newark and in fact.
This week, new equipment was delivered to that facility to further increase the efficiency and the production capacity of that facility. So if you remember on prior conference calls.
Discuss that.
<unk> expanded their emulsion production capacity in Israel, and now they've taken steps to increase the coating capacity of there.
Their facility in Stuttgart and for those debt.
You know remember the inauguration press release about that.
Factory It can code 1 million square meters of SPD film a year.
Yes.
Chuck Michael's had asked.
Please clarify.
Where we are in terms of SPD film Big used in future cars, and when well I mentioned that.
We're going to.
Have a number of instances at the Munich Auto show and I think people should standby and.
Enjoy some of the announcements coming out of that and previously we talked about Cadillac and as many of you know also Hyundai made a direct investment in our licensee galaxy, so while they haven't announced their timetable yet.
I think people can draw the proper inferences from that investment that they made.
Jump into it right.
There've been a lot of mention of PD L C lately in the automotive sector.
<unk> seen advantage of having a combo product with SPD and PD L. C. Combined however, I cannot wrap my head around how a vehicle can have PD L. C alone unless they have a lower a roller shade should we expect a combo product, but thats pretty popping up in the automotive sector and what is your view on vehicles that might plan on.
To have PD LC only.
Is that possible without a roller shade and a related question.
Came from Jared Albert who said am I correct in thinking that once an auto OEM has gone through the expense of putting pdl's into a sunroof. The only additional cost to switch. The SPD is a difference on the cost of SPD versus the PD L see even the lamination with the need for Hermetic seal has the same cost.
And then before low he became a standard coating on Sun roofs. There are articles criticizing the greenhouse effect and the 57% and 62 my box and the concept <unk> Bora with LC roof systems.
From the light blocking versus scattering advantage that SPD offers over PD L. C is the greenhouse effect caused by visible light still a quantifiable advantage for SPD over PD L. C. These questions are related because I don't believe Sam that there will be a combination product. If you think about a sunroof.
The main use of PD L. C is for privacy and you really don't need privacy and a sunroof, especially when the existing.
The 90 day Micron SPD film can block 99, 5% of the light and.
Uh huh.
The other I think question highlights the fact that when the auto industry has tried PD L C by itself.
They run into the greenhouse effect, where light will enter the vehicle and create heat and then get trapped inside the vehicle. So it has almost the opposite effect that youre trying to achieve which is to keep out unwanted heat light and glare.
But you know a car company, sometimes we'll try things sometimes they have.
Yeah incomplete testing, our engineering information and sometimes.
You know the data just doesn't bear out in the real World. Our technology has been proven in serial production in cards since 2011, and Mercedes test shows that we can reduce the temperature inside the vehicle by 10 degrees C or 18 degrees Fahrenheit. So.
Very significant.
Reduction in heat inside the vehicle.
Mr. Claire Hart and it said my question for the meeting what is the cost differential if any between views technology and research frontiers SPD.
That's a great question, we have not seen.
I'm subsidized pricing in the electrochromic industry. So whatever pricing is being quoted out there is highly subsidized now we can infer from some of the data we see in the public filings from view for example.
That for every dollar of revenue, it's costing them $4. So does.
There's at least a 5 to 1.
Subsidy going on there in terms of.
How much they're spending for our project versus.
Net revenue.
<unk> and <unk>.
That relationship changes.
It means that they're going to lose a lot of money on every project and our licensees are able to be cost competitive on the projects that we bid against view on.
Without having to incur.
Incur those kind of subsidized expenses and things.
And.
Another question.
From Mr Shah.
It is the role of Galaxy and research Frontiers do research frontiers shareholders have a chance to invest in galaxy.
Galaxy is licensed by US primarily to make SPD film and they've built a state of the art facility in Germany to do that Mr. Shah.
And they're.
They are a licensee we have a very strong working relationship with them.
You know we collaborate on projects like for example, the rehab project and others.
And that's become a very good working relationship together as far as direct investments and galaxy.
I believe that most of their investors are large institutional investors, they're not a public company. So you can't just investing them directly on them.
You know unless you're a fund or a money manager of some sort but.
I know that Theres been a lot of interest in our direct investments and galaxy and they're an excellent company that does great work.
So.
We we handled a number of the questions. We got by email I just want now to.
Ask our operator, Paul to open up the conference to any additional questions people participating today might have that we haven't covered and then I'm going to make a few closing remarks that I think will be helpful to people.
If you would like to ask a question. Please press star 1 on your telephone keypad now.
You will be placed into the queue in the order received.
<unk> be prepared to ask a question when prompted.
Once again, if you have a question. Please press star 1 on your phone now.
And we have a question from Jared Albert.
Your line is open.
Hi, Joe.
Hey, Jared how are you.
Good good.
Im not sure. If you answered my question is it's true.
Carr concrete goes with PDL C is it.
Okay.
Youre right and I didn't mean to ignore that part of the question I was caught up in the ER.
The heat benefits.
Of PD L C.
The detriment of PD L C.
From your question.
If you have a car pre wired the electronics are essentially the same between PD L. C. N S. P D. They both use AC voltage it stepped up from a 12 volt car battery.
So really it's just replacing the glass we.
We use actually less power and sometimes.
As much as 1 seventh the power of.
Of PD L C.
So, but excess power doesn't it doesn't hurt our system. So you can just substituted in 1 thing I want to mention also I was discussing earlier in the context of bidding on projects the cost differences between electrochemical glass such as views and.
S. P D from research frontiers, and 1 of the things that.
We keep we keep hearing now from architects is that while the glass may cost X and it's a highly subsidized price on the.
Chronic and things cost about as much as the glass in the case of an electric chromic technology and SPD, we can use off the shelf control systems, it's pretty basic electronics, we don't have to condition. The power of the same way debt electrochromic too because they tend to have very high sensitivities and can even get fried out.
From minor voltage spikes, which is why they have to.
These.
Installations have to really pay attention to the wiring in the electronics, we don't have that I mean I've seen.
And SPD plug directly into a wall socket.
Yes, you can -20 years old and plugs right on the wall socket.
Debt as far as I know, there's probably a stepped on it taking a worthy controller.
Go on just going back to the PDL <unk> am I right in thinking that that is eliminated assistant where their magic glass.
<unk> obviously.
But it really I think there's probably more things yeah. It is a laminated system like S. P. D. So it's a film laminated between glass. So those things should be relatively equal with PDL see because you don't have the inherent.
Heat blocking capabilities. If you wanted to make it somewhat energy efficient you would have to put either special coatings on the glass, where you'd have to put special inter layers inside the glass that you may not need with SPD.
So it could be that.
It may be simpler in some cases and harder than others.
I mean 10 years ago. It was on your refined the limited system and now it's on standard Yes, you can't probably for safety.
Temporary systems are exploding, but the limited system sort of am I correct that the.
I mean, the setup for the industry at this point is laminated panoramic roofs with multiple inter layers for use eni on the tight yes as Devin.
<unk> is right in line 2 layers.
Right and.
And that is that is the direction of the industry and you know 1 reason is as you mentioned that some of the tempered glass.
Sun roofs, we're just spontaneously shatter and things like that which you know.
As a problem when you're driving obviously, but.
And our problem for the carmakers. The other issue that's happening now which is a little more subtle.
Is that.
As you move away from internal combustion engines and more towards electric vehicles road noise at higher frequencies becomes more of an issue than it used to be that the engine would drown out some of the higher frequency road noises, but now you're here.
Higher pitch frequencies, because the engine is quieter and because of that also just generally and cars, they're moving more towards laminated glass because you have the acoustical benefits of blocking road noise and they'll get maybe even better acoustical benefits with SPD, because the SPD light control.
Troll layer actually has some pretty effective noise deterding characteristics as well due to the nature of the chemistry, so having a film with this stuff in it.
Actually helps a lot with the noise as.
As well on that.
And then final question from.
I'm sorry final question same category, but can you give a sense of the price difference between SPD and PD L. C. Just assume the actual so I'm I mean is it is it a magnitude is it is it just a single digit factor are we within range I don't think about the things that and I'm thinking about the BMW IX and how easy it would be.
Once they discover to just switch them.
It's not it's not a order of magnitude, it's a single digit and probably a low single digit factor.
Factor and.
And some of the pricing I've seen come out of galaxies factory.
Makes it price comparable on high volume so.
That's incredible because <unk> is a true commodity at this point I mean, it's about as commoditized as they get so that's incredible.
Yeah.
We did we just have to get to the volumes to to achieve that price parity with PD L. C. But that's part of the business plan net Ghazi has.
As Galaxy at this point I know I said last question, but you brought it up is galaxy at this point more in the position of constant price improvement rather than sort of oops I mean, they hired as they hired an outside senior process engineer, who has some interesting clues on Linkedin and so I wonder. If this is just in the category with cotton prices improvement or if this is Warner.
The category of Okay to get at this why do we still have to do a few things can you characterize.
No. It's it's more it's more cost in process improvement and.
And obviously you know there are things that are driving that some of the projects that they're working on can greatly benefit from even slight reductions in cost and things like that because youre talking about pretty high volumes.
Fingers crossed thank you very in line, yes, thanks a lot.
Yeah.
Thank you. Our next question comes from Francis courtroom.
Your line is open.
Good afternoon, Joe Hi, how are you.
Pretty good I was wondering can you tell me how far along the cows. He is in developing a dark.
Dark particle.
They had announced their R&D on that when they initiated the factory because there was a number of people from the automotive industry in attendance and there is a timeline.
We're approaching now I can't give you more of an update than what they've said.
You know in the past, which is they're working on it and.
It's on their radar.
Okay.
And by the way research Frontiers also.
You know it has a number of existing techniques too.
Work on the color and and also new materials in development, but you know 1 of the things that we won't do is.
Let's talk about vaporware, so when we have it you'll now [laughter].
But it's but it's a priority for us as well.
Once it is developed.
We will need to go through a testing things.
We're everything every day everything should.
Some of the choices, you're making the development process can minimize the differences between existing materials and new materials and and that's something that we certainly have kept in mind and in the work we've been doing at research frontiers.
The income from them.
Once it is developed and it might be several years before it's rolled out or.
Sure.
Or it could be it could be that it's so comparable to the existing materials that you only need to kind of put it through some quick basis to make sure that theres nothing unanticipated going on.
Okay.
It may or may not take that long for validation is what I'm, saying.
Based on the nature of what we're working on.
And Hyundai, they're investing in Ghazi, how would they actually benefit from that.
Well you know that.
That's the an important question why would you make an investment and a supplier unless you were trying to strengthen that supplier because you had a strategic need for the material, that's making and that's that's kind of how I see the on day investment is it's a strategic investment in a strategic material for them.
And I'm still waiting for the royalty collecting.
The dividend paying machine.
Machine exact but very much in our plans very much in our plans to my friend.
Getting closer.
Well if you look at the fact that we've reduced costs continuously for the past 6 or 7 years last year was our lowest loss in 26 years and you know we've had further cost reductions this year versus last year.
No, we're definitely driving the company towards being as efficient as possible. So that we can pay out more on dividends.
Yeah because.
1 of the nice things about our company is.
Is that unlike other types of business models were a licensing company with very very predictable expenses. So you know for us to look at what our cash needs are and predict them quite accurately is much easier for us and other companies and because of that the ability to pay dividends I think will be a lot clearer.
You know 2 to US now it's a decision for the board of directors, but all of our directors are long term shareholders of the company and I think we all see eye to eye that it would be nice for us to be able to.
You know keep our stock and monetize it as well through dividends.
Yeah.
On a on a tax you have to do a tax balance plant you can pay everything out in dividends, but on the other hand, it would be nice to.
To be able to do that.
Yeah, but that only comes after revenues.
Sure.
And you know where you know with the with the things in the pipeline.
On our way towards that so.
You know, we we pay attention to the costs and we pay attention to the revenues both.
Patients are still better than the patents right.
Determination is better than patents and we're very determined to become a very very successful company and not make some on the mistakes that others in our industry are making.
Thanks, Joe Thanks.
Thanks, a lot.
Thank you.
Our next question comes from Art Brady.
Yes, Hi, Joe Crazy here.
Hey, art how are you.
Okay.
I was wondering about Nippon glass, we saw it debt.
Around the time of the Olympics that possibly nip on glass wood.
Talk about some of the things, they're doing and I was wondering what the status of that is sure excellent question. So Panasonic, who their customer has a usually a very very very very strong relationship with the Olympics historically going back decades.
As everyone knows this year the Olympics were.
Our storied event to say the least.
Dubai is a very very good market with great companies that you know we're already working with and Gals. He also has very very strong relationships in Dubai. So you know when you have enough people pushing.
Something forward it usually happens.
Another question I have is as follows there's a company in Israel.
It's cool re or the motive and they were just taken over bias back and they got quite a.
Amount of funding.
And basically what this company does.
It's on the electric vehicle.
This day, just build the base and anyone who wants to do.
Hello.
On the electric vehicle they build on top of that base right. They called on the skateboard they call it the skateboard yeah.
Exactly are you are you doing anything with them because it seems like it would be terrific. If you could develop a kind of a model that you just put on top of that board.
As an enclosure.
Have you had.
<unk>.
We're working on many many electric vehicle companies I can't you know comment on individual ones, obviously, because it's you.
You know.
Need to keep business relationships.
Probably not on you're working with.
It's a skateboard company.
Okay is there anything you can tell us is too dangerous plans to include S. P D and new models.
Well, we have a good relationship with Daimler and you know right now they're in this.
Period, where there you know almost over simplifying their vehicles in terms of product offerings, and and you know entrance and you know there's some reasons underlying that are totally unrelated to S. P day, but I'm pretty confident that you know because of the benefits that S. P. D has and there familiar.
Already with the reliability and performance of S. P. D that you know will be on future vehicles there.
Okay and then the second area was I don't think there's any discussion on this call is too S. P D and buildings can you.
Tell us what yeah, there in that area I I kind of backed into it with a discussion of our licensees going head to head with view on stage on architectural projects I'll give you a little more detail on color, though you know 1 of the things that I'm pleased to see out there is that architecture getting a lot more sophisticated in.
How they view smart glass it used to be something that they thought they knew about but they were kind of lumping in you know P. D. L. C. N S. P D and electrochromic and Thermochromic and you know photochromic and everything into the same kind of patch and judging from the questions that we get when we talk the architects it's a much more sophisticated.
Indicated understanding of the differences between smart glass.
That's out there you know.
And 1 of the things I was toying with today is actually giving a primer on the different types of smart glass on the relative advantages and disadvantages I chose just to kind of focus on electric chromic because you know it's it's the closest in terms of the parents to us but not in terms of performance, but you know the projects that we're working on our projects.
That you know a nice poster child children for S. P. D. You know really cool designs very hard to shade types of glass that you know where if the glass did the shading it would solve a lot of problems. So.
Those are the kinds of things that are the lower hanging fruit in that industry you know.
Mhm.
Okay. Thank you.
Thanks.
Thank you.
And we have a question from Bruce Denny.
Your line is open.
Hi, Joe how are Ya, Hey, Doctor, Danny how are Ya.
Very good thanks.
A a couple more questions about the architectural market.
I think it was last conference call. You said, we had already been inspect into some architectural projects and that's about as far as we got where that conversation.
And my question is can you give us an idea of the scale of some of these markets are these projects that we're in and win or have they already started construction and I don't I'm not interested in interested in fine detail, just whether or not some things on it started and I was.
Looking at a skyscraper or a store front, yeah, well what are we talking about what time zone, where we're sorry, it must be true yeah, <unk>, yeah, we're talking mostly skyscraper type projects corporate headquarters things like that you know there are.
Storefront in retail uses for S. P. D that are pretty cool, but you know the things that you know are on my direct radar is you know is the bigger projects and uhm glass tends to get put in later in the in the construction phase.
So you know I don't want to say anything prematurely, but you know being spect in is really really nice you know, especially when the architect has a good understanding of you know what it is they're spending in and you know and the attendant things that have to be done to the system in our case not much else to be done to the electrical system.
Whereas an electric comics you have to sometimes really.
Spend a lot of time and money to you know to put in something that's compatible on the electronics line.
So you know those things are moving forward.
They're always could be slips between the cup and the lip and you know I think what.
What view found out.
Perhaps painfully is that you know just because you have a letter of intent on something and you you know categorize it as backlog you know typically the first thing to get thrown out is you know the expense of glass and I think they found that out the hard way. So you know on their last conference call.
You know somebody asked him about backlog and you know they kind of backpedaled on the backlog issue and said well. We don't think it's a good predictor of future revenue. So I think they're beginning to realize that you don't count your chickens just cause you're expecting.
Right. So have any of these projects target alrighty.
There's you know there's still you know getting into the the shovel stage.
Okay. Fortunately, unfortunately, yeah, but some some or some can be near term because.
[noise] excuse me uhm.
You know fleshy glass can go it at any time.
Right. Okay, then alright, thank you Joe.
Thanks, a lot.
[noise]. Thank you.
And we have a question from Dennis Lavelle.
Your line is open.
Well. Thank you so much Jo.
Hi, Dennis how are you.
Well perfect.
Thank you for a call earlier today [laughter].
[laughter] I didn't know I'd be on the call today, but I am Okay, I got like 2 different areas 1 areas in Brazil, you mentioned a year ago or so that you had armored plating glass they were gonna use your technology.
Has anything.
Become of that or as a pandemic kind of scratch that opportunity down in Brazil, well. The pandemic certainly has affected Brazil pretty hard, but even posed pandemic I saw some demo vehicles that were for a major OEM you know with the armored glass you know armored S. P D glass so.
You know it it's hard to say unless you're you know feet on the ground and in Brazil, and it's very hard to do that right now.
But but you know what I've seen was very encouraging okay. And then you you you you spend a lot of questions answering architectural sheet glass and my question is you said your bidding a lotta project views announced you know they have a steady stream of project, saying out from.
For once a yeah, yeah, usually it's the week before their conference call well.
Well I you know if I were that might do the same thing. If you were then you have 2 over you may or may not absolutely absolutely. Their current river North project 235000 square feet class a office building is that.
The the the the the square footage that they're gonna get paid rent on or is that the like glass area of that building do you have any idea yeah.
Yeah, Yeah, it's not the glass and the fact that they're quoting these projects in terms of how much rentable feet makes me think that well the amount of glasses are amount is significantly I'd have to do with anything.
I agree I could say I'm in $10 billion worth of Mercedes cars, Okay, but my glass content. This that that you know it's all right you.
You know I've done something nobody's on on a conference call, but anyway, let's go let's go on you said, you're paying a lot of the architectural she class market.
Our licensees are yes.
And what's the primary reason why you're losing it because I if I understand when I lived in without losing that's you know.
We're we're just not giving it away I mean, I think if you look at there was a research let me give stuff away, okay, but maybe [laughter]. These calls day, what what day would how they want a chrysler product, but it but at the end of the day [laughter]. Your bidding on these projects are godsey, depending on each project, you and you're not getting but I will.
Heard you say at 1 point this conference call that apples to apples your your damn close your only off by you know.
There within striking distance and and with with I think a.
Product that has better performance I mean, you know 1 of the things that I I didn't do because I don't think I should be doing it but a research analyst that came out with a report on view would actually interviewed former executives of you and confirm that you know they were given the glass away on some.
The earlier project. So you know if you wonder where you know the hundreds of millions of dollars. They lost each quarter, you know or each year a lot of it goes to things like that and you know there is in any industry. That's you know that's emerging I need to prime the pump a little bit, but you know there are limits to I think.
You know, what's prudent and you know.
I'll just leave it at that.
Okay.
So your within striking distance as far as price, but at the end of the day.
Your mum's the word, but there's there it's percolating into percolator sort of thing yeah.
Yeah, Yeah, and you know historically in every industry that we've been in.
There have been entrance, mostly in the electrochromic field that have lost money on each piece of glass.
But could you give us a lay of the land, but the airplane market today as far as what you have what the other people happened with technologies to the other manufacturers are using if you're right a timer or care about it sure.
Sure so up until this year, we were mostly in.
We were we were actually the first commercially flying switchable window, we were put in the Airbus a 380.
Planes that were.
Outfitted and used by Qantas Airlines since 2008, I believe so we were the first kind of flying and longest flying switchable most of what we have been and though it had been general aviation. So the king airs on the Honda Jets and things like that.
And and then recently again, we got into the <unk> to 'twenty.
Airbus <unk> hundred 20.
You know, which is becoming a more of course in the ER and the transport industry as well and a trip airlines and things so.
That's what we have.
Gentex is on the Dreamliner as you mentioned they had some issues with the Dreamliner and I believe they're starting to restart production of the dreamliner again, but or slow it down a little bit until they figure out what was going on there, but but you now.
And then there are an option on the 7 triple 7 but I don't think it's being used.
Okay.
Okay final I promise what question if you were me.
What I ask you to.
Pro trade my intelligence.
[laughter].
Yeah I think.
Yeah, I think that what I would say is that.
I wish that.
The things that are bubbling to the surface.
If people would understand that they are bubbling to the surface and and coming out and that theres going to be a period of time between when you know some of them Mercedes came off line at the end of their product lifecycle and when the new cars come on but you know where were out there you know with a lot of irons.
The fire working with a lot of different Oems, both electric and internal combustion engine vehicles and you know some of these things are pretty exciting vehicles and I always wanted to drive.
A car with SPD smart glass in it so I think I'll have some choices as to different Oems.
Well, thank you very much.
Thanks, Dennis Good luck in the future to all of us.
To all of us.
Thank you.
An aircraft Windows that has combination products and yeah, they're cool you know, but I don't see it on the roof of I don't see it on the roof of a car, though because you know for the most part you don't need privacy, there and and you really want to reject as much heat and light as possible.
Yeah, I, only say that because continental on there the engineering what website had they had they really fantastic video on <unk> com.
The nation S. P. D. P. T L C, which made I think I'll think well, maybe we're going to start saying combination of that but it sounds like more more of that kind of a sight loss not at not a sun roof feature that we would see that in the future.
Right I <unk> I could see it as being a privacy future. If you wanted it.
Got it secondly at some.
Some of the the the message board chat kind of goes over you know we thought it was really amazing you tube video from dog Tomorrow, Big Big Auto Guy and he he he highlighted the the day mclarens detail like 1.7 million views. He had so much <unk>.
Passion and I was just thinking is there any way.
Not sure by the show on a good comparison here SPT here City I'll see you here E C and and show the performance Benjamin <unk> to get more of the word out because honestly I don't I don't know how much like <unk> for instance, <unk> when I would visit a Mercedes dealership years' ago, and ask them about the product. They they didn't know know uhm, whereas.
You know somebody in the industry, who can really spread the word.
I I'm not sure if maybe there's no answer to this day.
Have have thoughts on a marketing. This this technology, you know been put out that way or or reaching out to somebody who had a pretty wide footprint in September the audience. Yeah <unk>. These technologies.
Yeah. So we you know at 1 point, we had a you know an effort going with the dealers to educate them on.
The option and the benefits and things like that the way that Mercedes prices options.
The deal is a relatively agnostic so the only thing it becomes and this is what we heard from a number of dealers is it's a very cool option. You know if we get a car and that doesn't have it on the guys neighbor has it with the magic Sky control future and this guy doesn't then the customer it comes back to US all pissed off that he he wasn't told about it.
But for the most part the dealers are selling what they have on there a lot and you know if that's a orange car with pink polka dots, that's what they're gonna try to sell you and you know what we what we found is trying to get Mercedes and others too.
Change the make rate was a more productive approach there and Mclaren has had huge success with the you know the S. P. D roof. The customers that are very very very high take rates and they you know they loved it.
Alright, you know so yeah, and I think you're saying that I think you're seeing that what you mentioned kinda that Mclaren enthusiasts, you know really becoming very vocal and passionate about it and it translating into other Mclaren owners buying it whereas on a Mercedes you know you have kind of a whole mixed bag of demographics buying a mercedes it could be you know an older person.
That doesn't go on social media on it could be a a young guy that you know the that does and often that may be where they are you know planning it.
Well I'll set you just just to kind of differentiate us.
Again, yeah.
Tom and quote Yea, though that's really cool like electric from my class when you know in your best or Who's <unk>.
In basket and research from an interior is no. That's clearly not <unk> E. C. Already is S. P D or whatever whatever day, just just from that performance breakdown. So I thought that would be interesting right, yeah, and we try and we've tried to get the industry to use the terms correctly you know a lot of times were referred to as electro chromatic glass and you know we tried to get reporters too you know.
Offer to us cause suspended particle device for S. P. D. You know so that because there is a difference obviously.
What kind of like day, which was great.
Yeah.
Yeah, we spend some time, making sure they would [laughter], Okay and then the last question saved the best for last.
Any any <unk> any way to say, whether yes, or now that next month that I Eh, we're talking about demonstrations in terms of showing on the technology are we talking about.
Alright, you're talking about series production with S median excellent and I a.
I'm not allowed I'm not allowed to say, but I think you're gonna see a number of.
Uhm demonstrations that on.
<unk> gonna be very cool and feasible near term and I think you know.
[laughter] well you don't see.
It's usually until it's ready to be launched is the actual series production line when they're gonna put it in series production.
You'll see the car with the S. P D on it you know and.
You know I think that given the time frames and the marketing plans that the automakers have it won't be it I E that you would see series production, but look I've been wrong before I've showed up at.
Other car shows and seemed launches when nobody including you know our our contacts within the automaker thought there would be so.
Yep.
Perfect.
Okay. Thank you Joe.
Thanks, a lot.
Alright, Okay and our final question comes from Michael K.
Your line is okay.
Hello, Joe Hey, Michael how are you I want to ask in the past you said the main barrier to getting S. P. D. In major architectural projects was was cost, but now that costs are down.
Shouldn't that no no they're made with the major yet and the major barrier was nice.
The major barrier wasn't cost it was with.
Yes architectural you need you know 1.21, 0.5, or 1.8 meter wide film and Hitachi was only making 1 meter wide film. So that was that was the barrier. The thing that is breaking open that market is not the cost of low cost is certainly you know easier to deal with when it's lower and cash.
It's has been achieved or do you think you know you're never gonna achieve you're never gonna achieve a sweet spot.
Because no matter what the price is someone wants it lower what happens is price goes down. It's just a typical male supply and demand curve. Your your price your cost matches the projects that can benefit from your products that that cost.
You know family is not selling cars for $20000, that's not their market and we're not selling glass for you know $10 a square foot like you know.
Like regular glass goes for or view cells. There that you know because that's not our market.
And would you say that guy was he's now the major producer of S. P. D. A film Oh and on all of a standard.
Oh would you say that he said crawl 9 a touchy still still are.
You know projects went on hold or we're all on where we expect in the.
Yes, what I was trying to say before though is.
Just because you expect it doesn't mean that you can make it in.
At the final cut you know usually the first thing to go as you know the bells and whistles.
When when somebody does a building and they realize that you know there are over budget because of X y and Z. Once they put the shovel in the ground you know often you know the trim and the glass and things like that are things that can suffer and that's something that you know I think view learn.
The hard way.
Well.
My point is because.
Such an integral part of the building envelope once you spec in it's very hard to.
Redo it because it takes a lot of time, so you are saying that the architects.
Whoever the owner.
Is willing to take more time to resubmit with a another bells and whistles as you say that's kind of well.
Well, it's not a perfect substitution back I mean, you know you take out the smart glass and you put in regular glass with shades.
And that's you know sometimes easier sometimes harder.
And Oh, Yeah, obviously, you don't want it to happen, but I think that it happens a lot where you know where there's a slip between the cup and the lip you know some somebody you know.
Puts a shovel on the ground and they realize that you know maybe the ground wasn't as firm it needs more money for the foundations of mass to take it out from somewhere else and.
Now it happens it's totally unpredictable is what I'm, saying, so you know while you don't.
You know you don't know if it's going to happen and you hope it doesn't happen it happened, sometimes and I think like I said that you know I think view.
And I know that they started back off on kind of their definition of backlog realize that theres always slips between the cut on the left but you can't count something until it's firmly in there, but you know when it's firmly in there I mean, you know.
And you know when when the order is placed.
When the glass is produced.
You know 1 of the nice things about our businesses.
You know that's a less risky.
A way to deal with a customer then you know.
What's being done now.
Okay. Thanks for your answer.
Sure.
Okay.
Thank you and we have no further questions in queue.
Okay, I'd like to maybe make a cup.
A couple of closing remarks briefly.
Yeah.
I think today, new investors getting into the smart window industry and it is something that's getting a lot of attention now because of.
The public offerings from view and maybe to some extent crown they probably know a lot more today about the performance cost.
And also the manufacturing other limitations of other technologies, such as the electrochemical our electrochromic glass.
You know SPD is a roll to roll film based process and that allows SPD smart light control rolls of film to be shipped where they're needed cut and laminated to size with the minimum wage. So that really helps I think ultimately with the logistics from the costs, you know relative role in being able to cut it decides and.
They do a lot more with it.
Technology itself also has the best performance in terms of switching speed and range in manufacturing yields and logistics. So you have all these things that are kind of coming together nicely for us now that decides issue has been dealt with it.
It's also a proven technology you know its been put into some of the most demanding locations on a car and other uses with over a decade of real life testing and probably some of the harshest environments in the world and it's been used without 1 reported problem in tens of thousands of cars that had been on the road for years. So.
You know we have this technology that.
They appear to be cutting edge and magic, but its cutting edge not bleeding edge and.
You know, it's also nice to see that even though some of the original car models, because we've been around for over a decade.
<unk>.
Debt used at first or coming off their product lifecycle, new cars are coming back.
On line with SPD Smart glass, and we talked about some of these today or alluded to them and some of the other uses are expected to be shown in a few weeks at the Munich Auto show and even more car models are expected to be announced after that.
New aircraft will also be announced new train applications and now that goes you can coat film that's 1.8 meters wide new uses and architectural projects. So.
Things are moving forward.
1 of the things I also want to highlight as you know maybe.
A sign of times to come as our licensees have expanded production capacity in all areas of the supply chain from a chemistry production to the film coating to the fabrication of the end products for all industries, including the architectural automotive aircraft Marine transit and even consumer electronics industries.
And as today's announcements in this call has shown more and more uses for SPD smart glass are becoming public.
I wanted to take this time to appreciate the hard work.
Our team at research Frontiers, and other licensees have been doing and I really want to thank our loyal so the loyal support of our investors as we continue to lead our industry and moving forward.
Thank you all for being part of such an important part of that effort and I. Thank you for participating on today's call.
Okay.
This concludes today's conference call. Thank you for attending.
Okay.
The House has ended this call good.