Q4 2022 Research Frontiers Inc Earnings Call
Speaker 1: Yeah.
Speaker 2: Good afternoon ladies and gentlemen. Welcome to Research Frontier's Investor Conference call to discuss the fourth quarter of 2022 and year-end results of operations and recent developments. During today's presentation all parties will be in a listen-only mode.
Speaker 2: And following the presentation, the conference will be open for questions by pressing star 1.
Speaker 2: This conference is being recorded today. A replay of this conference call will be available starting later today in the investors section of Research Frontier's website at www.smartglass.com and will be available for replay for the next 90 days.
Speaker 2: Please note that some of the comments made today may contain forward-looking information.
Speaker 2: The words expect, anticipate, plans, forecasts, and similar expressions are intended to identify forward-looking statements.
Speaker 2: Statements that are not historical facts are forward-looking statements that are made pursuant to the Safe Harbor provisions that are part of the Securities Litigation Reform Act of 1995.
Speaker 2: 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.
Speaker 2: 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.
Speaker 2: 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.
Speaker 2: 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.
Speaker 2: If you find that your question has been substantially answered as a courtesy and to allow time for other shareholders to ask their questions, please remove yourself from the queue by pressing pound one.
Speaker 2: Also, we ask that you keep your question brief in the interest of time.
Speaker 2: I would now like to turn the conference over to Joe Harari, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir. Thank you, Paul. Hello, everyone, and welcome to our fourth quarter of 2022 and year-end investor conference call.
Speaker 3: I'm going to keep things more informal than usual today because I want to open up the floor to questions and discussion.
Speaker 3: We built off a number of very positive developments in 2022 and started 2023 off quite strongly. Gauss had their largest booth ever at CES this past January and moved into the prestigious Automotive West Hall.
Speaker 3: Major worldwide customers such as Boss, LG Display, OST, Talgo, and Continental joined them with various products mostly for automotive, aircraft, trains, and boats, but also showing architectural applications.
Speaker 3: And that was just the first day of the show. That night the CEO of BMW at his opening keynote speech at CES, aided by Arnold Schwarzenegger in person and David Hasselhoff remotely, showcased BMW's iVision. The car was equipped with its glass all around being SPD smart glass.
Speaker 3: Also highlighted prominently in Oliver Zipsy's keynote and BMW's press releases was a heads-up display that added vast functionality and readability because of the SPD component.
Speaker 3: You can read more details in the press releases about this, but I was there at CES from the beginning and some of our shareholders that have been visited. You can see SPD at the Galsy booth as well as other places, and it was impressive and prevalent.
Speaker 3: Moving to another act of licensee, AGB is visibly expanded. AGP is visibly expanded its operations to now be headquartered in Belgium close to many of its European customers.
Speaker 3: They have several SPD-CAR models coming out this year.
Speaker 3: They also expanded in Flanders and they also have an amazing highly automated smart glass factory in Gennville, Jim.
Speaker 3: I visited it and it was really impressive. We also focused on position your company well over the past several years. We also focused on position your company well over the past several years.
Speaker 3: I mentioned in one of the previous calls in response to questions about economic uncertainty, how research frontiers had positioned itself to be somewhat recession-proof and certainly inflation-proof. And that continues, and I guess it's been...
Speaker 3: well that we have done that.
Speaker 3: well that we have done that because those things seem to be.
Speaker 3: lurking or here.
Speaker 3: We are also patient and because of that we ultimately went over the customer. Many of you that have followed the smart glass industry might be aware that both Mercedes and Ferrari both used another smart glass technology before switching to SPD. And this year we expect another OEM that originally selected another switchable pin technology.
Speaker 3: to switch over to SPD.
Speaker 3: Usually, the OEM ultimately understands that not all smart glass technologies or the company supplying them are created equal, and we foster this by education, continuous improvement,
Speaker 3: ultimately understands that not all smart glass technologies or the company supplying them are created equal and we foster this by education, continuous improvement data.
Speaker 3: having a high-performing technology, focusing on being a profitable business and constant refinement of our business model, as well as good partnerships and cooperation with our licensees and a drive to reduce costs and to diversify the industries we're in.
Speaker 3: We and our licensees are constantly tapping into and fulfilling the need of customers to offer solutions to their customers and enable them to deliver new and improved and innovative products. And with that, a brief introduction and recap.
Speaker 3: I will now turn to some of the questions that we received by email.
Speaker 4: had asked about what areas have gp updated
Speaker 3: Last conference call you said that quote all indications are that GM is growing SPD or will pretty much in those words. Can you give some details on this and why do you believe this? Do you have any specifics on that that would be important to investors?
Speaker 3: Well, let me first by saying that General Motors has...
Speaker 3: adopted SPD Smartglass and their flagship electric, the Celeste stick.
Speaker 3: They've announced continuously now their EV strategy, which is to really introduce a number of much higher volume EV vehicles starting this year.
Speaker 3: Why am I confident that they're going to expand into other things? Well, Social Media is for free as blah, blah, blah, blah
Speaker 3: simply put, they told me. I'll give you a little bit of the background. Initially, I spoke at a conference on switchable, well, on glass in general, automotive glass in general, and the head of GM's glass and roof systems.
Speaker 3: I attended my presentation and then attended the breakout session that I had hosted. And we spoke afterwards and about a year later he told me that they had several car models that they had slated SBD for and asked my advice as to how to proceed with that. And of course I gave it to them.
Speaker 3: And they have a number of vehicles that are coming out after the Celesteik, but this is their flagship. This is their bespoke model. It's hand-built and it's a beautiful car. Another question Tom had asked...
Speaker 3: Please talk more about Hyundai, the Magic Roof, as this was out on the internet. I know you can't get too specific.
Speaker 3: And basically, I had spent a lot of time on the last conference call speaking about Hyundai as a company and about the Grandeur, the GM7, and some other vehicles that they have. What I'd like to do now is just focus on what's in it for them, what's in it for Hyundai.
Speaker 3: First of all,
Speaker 3: To the extent they put this on internal combustion engine vehicles, they're going to save 4 grams per kilometer in CO2 emissions, which is very important, especially in Europe where there's penalties for not hitting CO2 targets. And in general, their fleet will have better gas mileage by using SPD Smart Glass.
Speaker 3: So, if they put it in the electric vehicle area, you're going to get an estimated 5.5% increase in the driving range.
Speaker 3: And then of course, you get the halo effect of having what's on Mercedes, McLaren, Cadillac, and Ferrari.
Speaker 3: Those are reasons that I think Hyundai is on a good path with that. Another question came from Chuck. I'm going to try to just use first names here just to preserve some...
Speaker 3: with the dynamic glass act passed and other progress happening, when are we going to see a significant number of SPD windows and offices and other buildings? And I've been asked you to check the whole day of questions because I will answer it in my closing remarks. But then the other question you...
Speaker 3: you had is about the Dynamic Glass Act itself, and certainly that changes the dynamics for the better because it's offering a 30 to 50 percent tax credit for adoption of smart windows such as SPD. So it makes the economic equation that much better for people adopting it.
Speaker 3: This is from David. Many licensees have patents for various SPD uses. Do these licensee patents significantly hinder the implementation of SPD by other licensees? One of the things that we wanted to make sure of is that it wouldn't hinder other licensees from
Speaker 3: that basically when the license terminates or expires we get rights in all of the IP related to smart glass and SPD.
Speaker 3: Another question came from
Speaker 3: William says the Chipsack with the focus on Made in America brought about by the Chipsack. Are there any ramifications for research frontiers? Well, we have a number of US-based manufacturers. So to the extent that there's economic advantages for manufacturing in the US, our licensees.
Speaker 3: all have operations here and also we have some licensees that are only in America. So that is good.
Speaker 3: have operations here and also we have some licensees that are only in America so that's good. Okay, this comes from Jeff.
Speaker 3: Several of the EV makers are in financial difficulty and some will not last long. This will limit use to the major automotive companies which are hard to gain entry as their planning starts years ago. How do you assess the current market? And then view is in financial difficulty.
Speaker 3: How does that affect you? Okay, well let me...
Speaker 3: kind of take both questions.
Speaker 3: to take both questions. So one of the advantages of being in the
Speaker 3: licensing.
Speaker 3: business is that we can afford to be nice to everybody in the electronic, you know, the electric vehicle industry. So we really don't have to pick and choose who we work with because quite frankly nobody knows which
Speaker 3: EV makers are going to be successful and which ones aren't. There was even doubt years ago whether Tesla was going to be able to make more than 10,000 or 20,000 cars a year. They've gotten their act together quite nicely. We expect there to be shakeouts and I'm a student of business history.
Speaker 3: and you probably, if you think back to the turn of the 20th century, there were so many car makers, most didn't make it. So you want to cast a wide net, but being a licensing company we can. The other part of your question is about if this starts moving only towards established car companies, how does that affect us?
Speaker 3: Well, one thing I would say is that our bread and butter has been the established car companies. Mercedes, McLaren, General Motors, Ferrari now. So the fact that we've proven ourselves both from a reliability standpoint, which is something that the existing car makers certainly.
Speaker 3: admire and respect has been very beneficial to us.
Speaker 3: So, we have a long track record and it's one that is a prestigious track record. And if the electric vehicle market ends up going to the established car makers, we'll do well. If it goes to some newcomers, we'll also benefit. As far as your question about the electric vehicle market, we'll do well.
Speaker 3: and their financial difficulty, they are not doing very well financially and we'll probably learn more on March 29th when they have their year-end conference call which is pretty much the last minute.
Speaker 3: But they've been somewhat of a negative force for the entire architectural smart glass industry. You know, first they've had financial and accounting issues, plus it's very hard to figure out what a smart window should cost because they've been...
Speaker 3: somewhat of a negative force for the entire architectural smart glass industry. You know, first they've had financial and accounting issues, plus it's very hard to figure out what a smart window should cost because they've been heavily subsidizing.
Speaker 3: their sales to customers, which is why they ended up losing $260 million last year. So, you know, they are doing what they can.
Speaker 3: as well, not too much to say other than I wish all of our competitors well. They create a great reference point for a better performing technology and a real business.
Speaker 3: Another one comes from Judy. I recently came across this TechCrunch article claiming that the passenger display portion of the Celestique Megascreen will incorporate SPD privacy blinds to minimize driver distraction. Is this fact or fiction? Well, you can't always read what reporters will say.
Speaker 3: But I will say this some OEMs are working with SPD to minimize driver distraction
Speaker 3: I will say this, some OEMs are working with SPD to minimize driver distraction.
Speaker 3: For now, the only thing I'm sure of is that SPD SmartClass will be standard on the celestic roof, but we certainly have had broad discussions with GM about the benefits of SPD, so nothing here would surprise me on that.
Speaker 3: Okay, I think we answered most of those questions.
Speaker 3: Okay, I think we answered most of those questions from John .
Speaker 3: Bob, thank you for the questions. The Inflation Reduction Act or as it was titled when it was introduced, the Dynamic Glass Act certainly changes the economics of buying smart glass or putting it into small and large office buildings and residential buildings and also homes. As far as your question about Hitachi Chemical, as we noted in our 10K, Hitachi Chemical had sold their division that was doing the SPD film to Showa Danko.
Speaker 4: Okay.
Speaker 3: This is from Claire. I recently saw an ad for an electric BMW that had a sunroof that appeared to be using SPD technology although the technology was not mentioned in the ad. Do you know if this was SPD technology? Maybe they were using something else but...
Speaker 3: more often than you can imagine, and I kind of alluded to this before, the OEMs soon realized that other switchable glass technologies like PDLC or electrochromic has problems and as I mentioned we're selling a new OEM this year for this very reason. So I think that's it.
Speaker 3: And I also just want to thank Matt for his kind words about a dear friend who we lost. Ron Rosado. Ron was a long time shareholder and a broker and really was an amazing person and I've spoken to Ron many, many times and I wish his family well and that he rests in peace. I think at this point we've answered most of the questions or all the questions that were emailed to us. So what I'd like to do now is have Paul open up the floor to...
Speaker 3: any live Q&A that people might have that we haven't touched on already. And then afterwards, I'm going to make some closing remarks here.
Speaker 2: If you would like to ask a question, please press star 1 on your telephone keypad now.
Speaker 2: You will be placed into the queue in the order received. Please be prepared to ask your question when prompted.
Speaker 2: Once again, to ask a question, press star 1 on your phone now.
Speaker 2: The first question comes from Leonard Lietzau from Wealth Planning and Design. Your line is open.
Thank you very much. Good afternoon, Joe. Hey, Len, how are you? I'm doing well, thank you very much. A question, I think I was reading that Gaussian was going to be going public with an IPO probably in the first quarter. Number one, is that true and will it happen? I read the same article you did, Len, and I think ultimately,
Good afternoon, Joe. Hey, Len, how are you? I'm doing well, thank you very much. A question, I think I was reading that Gaussian was going to be going public with an IPO probably in the first quarter. Number one, is that true and will it happen? I read the same article you did, Len, and I think ultimately, Gaussies.
goal is to go public. I think it has many benefits, one being it gives visibility into their strength as a company and provides expansion capital.
Had a lot of larger Williams like to know who they're dealing with and you know, dowsy has
some very well-heeled investors such as Hyundai and others that I think would welcome a strong supplier like that. I can't comment on the timing of that. I think that for a long time, I think we all realized that the IPO market has dried up.
We're also saying that it's beginning to thaw out and good companies like Gaussian I think will do very very well when they do go public. So I'm going to limit my comments to that. I probably know more about this than anyone outside of Gaussian and maybe even more than some people within Gaussian. So let me just limit my comments to that at this point. A second question then. I know that they have increased the amount of emotion that they have been making that was announced almost a year ago. Right. Five X in weeks. Yeah. The five X in there. Capacity going someplace. So you know isn't that going to push us towards.
doing smart glass the right way. And that's what originally attracted us to them, is that we both shared the same vision as to where this market can go if it was done right. Steve, are you content with where it's going and the speed with which it's getting there? I'm never content with that. I was born in six months, Len. So for me, waiting is not top of my list of virtues. But on the other hand, I think it was very important that we and Gauss-Y does do things the right way. You don't want to have…
either bad starts or false starts with a new technology, and I think that that has proven.
to be a good approach for us. And when companies haven't done this, we've seen companies like Vue that really ran into tremendous problems and some of them could end up killing the company. So I think you want to do it right.
and they are doing it right, and they are making the investment to do it right, and they are hiring people to do it right. And if you look at kind of their hiring patterns, I think you will get a real good feel as to…
not only what they're doing but where they're planning to do it.
With the Glass Act having passed, I think the credits start hitting in January of 24.
Is that still accurate or if they order now, do they get the benefit of the... I think you have to put it in service by then. So you won't miss out if you do it in 2023.
Well, that would be very good for us. Yeah, very much so. Very much so. Okay, thank you, Joe.
be very good for us. Yeah, very much so. Very much so. Okay, thank you, Joe. Thanks, Juan.
Thank you. And our next question comes from John Nelson, private investor. Your line is open, sir. Hi, Joe. How are you doing today? I'm great. Thank you very much.
Mike, I've got a couple of questions, but the first one is kind of a broken record question as far as any updates on the visor, the windshield visor.
Right, so that actually has started to incorporate itself into some vehicles already in a built-in sun visor and a lot of the test vehicles that we do, the concept vehicles that we do have that kind of concept already built into it and in McLaren's case they actually put it into a
into the windshield itself. As far as the fold down sun visor, that's moving forward but mostly targeting the aftermarket and until that gets introduced there's not much I could say about it other than it's being worked on by several licensees and I think it's a good application
Okay, great. And then this next one you may or may not be able to comment on but it looks like
we're set up at REFR for a significant jump in revenues in 2023.
Is that a reasonable assessment?
I think if you look at the, and this is by the way, I don't know if anyone noticed, but in prior conference calls I used the F word without mentioning the name of the car company. But for the first time in our 10K and in our press release today I mentioned Ferrari. And I was really pleased that earlier this week Ferrari started saying that cars are being delivered to customers. And actually one of the Puro Sangwe customers is getting a Me drone from a Ford car and is offering a reliable application for an
reached out to me indirectly to say how excited he was to get, you know, this smart glass in his car. It's between
You know, what we have with McLaren and what we have with Cadillac and what we have with Ferrari and what, you know, is coming out in Asia. And as I mentioned, it's not just one car maker now, it's two over there that are unrelated to each other. A lot of people have assumed that.
Hyundai and Kia. I view those kind of as joined at the hip, even though they're separate companies. But I'm talking about yet another company in a different part of Asia that also looks like it's coming out with an SPD product as well. So yeah, I think we're going to have a good year.
The jump in revenues, because a lot of these cars don't come out until towards the end of the year, may happen in the third or fourth quarter.
But yeah, I think we're on a positive trajectory here.
Excellent. Thanks very much. Thanks, John . And our next question.
Comes from Michael K from K Associates. Your line is open. Okay.
Michael Kay from Kay Associates. Your line is open. Okay. Hello?
Hey Michael. Hello Joe. You know, I'll tell you, I've been a shareholder for over, well over 20 years and I'm very, you know, proselytizing the SPD and the company, but you know, it's getting a little tight and old because it seems that even though you indicated you've reached a sweet spot.
regarding the cost of SBD film and we have Gaussle, but it seems, you know, quarter after quarter the fee income really is pathetic and given the fact that SBD is the best flight control technology on the market and that the costs have been down to the extent that it's a sweet spot using the word
Okay. Okay.
Well, every car maker I mentioned is not a concept car this year. These are actual serial production cars. And I think people that are following the industry will look at a mid-level car manufacturer like Hyundai as being the potential to...
vastly increase the volumes. You know if you're a farmer and you plant crops you could stare at the ground for a long time but each crop takes a certain amount of time to grow and we've planted a lot of seeds and this year three or four of them have already started to grow and one or two unexpected ones also came in that you know I think you'll hear about.
all good stuff. But I think you will hear in my closing comments some things that you might find also useful with respect to all of the markets but also architectural.
Don't most companies want there to be more than one source of film? And if you said that Hitachi basically, you know, most of the film production would be from Gaussi, which is fine. Previously you said you were looking for a US-based company that could...
manufacture the film.
I never said US based. What I said in the past is that you're looking for a second source and it's probably going to be co-located near their major customers. So that may be in Asia, may be in South Korea, may be in Europe , may be in the United States depending on where the volumes are. But the licensees make those kind of decisions about where to put their production facilities.
And I think that part of this also is that if you have competition among the glass laminators, which we do, we have pretty much the who's who of the glass industry, then you'll satisfy the diversity requirement that a lot of people in the automotive industry will feel comfortable with. What about Panasonic? Has there been any progress regarding...
I think when you look at Panasonic, you should really look at who is supplying Panasonic and that is LG Display and we have spoken about that. They have had a very strong presence with SPD and their transparent OLED, which is a remarkable technology. I mean if you see this in action, it is mind-boggling how good it is and it certainly is an attention-getter. Basically LG makes the displays for Panasonic and a number of other display manufacturers as well.
We're in the number of things. We're in Japanese trains. So pretty much around the world you're seeing SPD adopted for trains and other transit. And I must say that having vision systems is a licensing that area has been extremely helpful because their focus from day one has been on trains and transit and buses and all of their other antelary businesses, whether it's the safety tech business or their electronics business, they all focus on providing high-end solutions to those industries. So it's really good to have someone that is that knowledgeable about.
trains and mass transit vehicles involved. Okay, I hope that we wouldn't have to wait another 20 years before the stock performs in a way that correlates with people's confidence in the technology and your management.
Okay, thank you. It could be worse. You could be involved with either View or Crown and lose 95% of your value in the last year, but we're holding steady in a market that's very difficult.
and we're in an industry that we seem to be the dominant player in now. Whether we have competition or not, we're going to continue to do things the right way.
And we're in an industry that we seem to be the dominant player in now. And whether we have competition or not, we're gonna continue to do things the right way. Okay, thank you.
And as a reminder, if you do have a question, please press star 1 on your touchstone keypad now. And our next question comes from Gerard Sherman from Strategic Planning Group. Your line is open. Hey, Joe. Thanks for taking my call. The question for you is just surrounding the reviews. I was hoping you could kind of help me understand, not necessarily from a guidance standpoint, but what it's going to look like going forward, being that if we're in some planes and trains and yachts and a few high-end cars that produce probably very little numbers, and we're pulling in $130,000 in revenue, what does it look like if we get somebody that moves 50,000 cars a year or 100,000 cars a year from a price point, what does that look like from revenue-wise for us?
Okay, great. So, first of all, let me just kind of back into the question a little bit. So, revenue this year when you exclude one time and special events and things like that was roughly the same as the prior year. And all of the cars that are coming out haven't been reflected yet in our revenue for 2023 yet.
If we took the original kind of estimates that we had when Mercedes was doing this, we were getting between $150 and $225 per car in revenue in royalties for that. Since then, fortunately, the price of the technology has come down quite a bit. And I'm thinking that probably a good estimate to use for your back of the envelope calculations. That would be anywhere from $75 to $150 per car now in terms of royalty per car. So if you multiply that by someone putting in 50,000 cars, you get $75,000.
you'll see that that can make us profitable. Clearly, very important. Now, isn't the size of the glass, I mean, the original ones, we were just looking at a standard sunroof. Now, if the entire roof is glass.
That doesn't improve the numbers for us? It could in that you're dealing with a larger piece of glass, but on the other hand, a lot of the cost that goes into any kind of glass product, whether it's switchable or not, is the fabrication, so the interlayers and things that go into it. If you're spending
labor dollars to lay up a you know laminate piece of film whether it's smart or not you know that's gonna cost you money and it's you know it won't be as much on a larger piece of glass as a smaller one but there'll be some difference
But yeah, it's certainly a benefit that sunroofs are becoming bigger and bigger. So you get the panoramic roofs or the ones that go from the windshield all the way to the back of the car like you see on the Model Y and some other vehicles. And what's good about those.
panoramic sunroofs that are basically all glass roofs is that the car makers have realized sometimes after the car goes into production, which is another opportunity for us, that the car has spent too much time on for our super car makers.
that you can't shade something that big with a traditional mechanical shade that pulls across, like you see on a typical sunroof. So you need something else that can shade it. Now, in the beginning they used heavily tinted glass to do that, but if you're putting such a heavy tint as to manage the solar heat gain inside of a car, you might as well just have a metal roof. So they're beginning to realize that they need a switchable.
and the switchable also has the added advantage in that you're actually reducing weight. So even with a normal, Bentley did these calculations years ago, a typical roof, if it went from a moving roof to a stationary roof.
that had SPD Smart Glass in it, and that's the example they used at their presentation, would save about 56 components and about 13 pounds of weight in the roof. And saving the components is actually a significant cost saving because it's really the cost of assembly that's the cost of a car, not necessarily the cost of the components.
So, we are not only more reliable because there's no moving parts in an SPD sunroof, but we should also help save money for the carmaker. And then, of course, you get the other benefits, increased headroom, reducing the cabin temperature by 18 degrees Fahrenheit, and other things like that. So, the slow adoption of it, you don't think has anything to do with it being...
too costly of an item because they're savings elsewhere. It just seems like such a good product. It's taken forever to be adopted. And Tesla, how does Tesla not use it? And it's stuck to these high-end cars. It's like, wow, I mean, no one's gonna touch it. That's in a 50,000, 60,000 range.
If you look back at the transcript of this conference call, you will see that I said earlier on that eventually everybody adopts SPD. It's just a matter of us having the determination to make sure. I wouldn't be surprised if Tesla was one of those OEMs that also did that. Okay. All right. Great. Thank you.
look back at the transcript of this conference call, you'll see that I said earlier on that eventually everybody adopts SPD. It's just a matter of us having the determination to make sure. And I wouldn't be surprised if Tesla was one of those OEMs that also did that. Okay. All right, great. Thank you. Appreciate it. Thanks, Jared.
And our next question comes from Art Brady, a private investor. Your line is open. Hi Joe, Art Brady here. Hi Art. Can you comment on the AGP, uh, the AGP, uh, the AGP, uh, the AGP, uh, the AGP, uh, the
factory that was established. Was this built on exactly the same specs of the Düsseldorf
that was built by a Gaussian, or it's their own configuration? It's a different type of factory, but it's a good question, Art.
They do share one thing, they're both highly automated factories, so very low labor costs. The Ghent factory in Belgium that AGP has is highly automated. I mean, I walked through this thing and we saw three engineers that were just looking at some monitors to make sure that everything was working okay.
And if you think through it, what does that mean? It means that all of a sudden now you could approach Chinese labor costs, because you don't have labor. And also the consistency and the reliability of an automated system, once you make the investment in automation, it's quite good payback, because you're making a very expensive piece of glass, you want it to be good each time it comes out.
And if you look at some of the videos on AGPs website, you will see some amazing things that they have been able to do with our technology in their glass. The Gaussian factory makes film which is a totally different process. It's a roll to roll web.
where you're coating an emulsion on a moving web of ITO-coated PET and then curing it with UV. It's a different process than what AGP is doing, which is taking that film that they would buy from Gaussi and putting it between two sheets of glass and using a hot melt adhesive like EVA or PVB or...
polyurethane to laminate that stack together into a laminated piece of glass.
from that experience that you had in the Middle East? I think you're going to see revenue from them from all over the world. They have a very strong presence in the Middle East. They have a very strong presence in Asia, all parts of Asia, actually. They have a strong presence in North America.
and they're expanding all of these. I mean, I'm privy to what their plans are and I don't think they're doing this because they like the climate. I think they're doing it because they like the customers where they are.
So yeah, we all expect a very good payback from this investment that they're making all over the world. When do you think we could actually start seeing some revenue in that regard? Well, you know, if you look at where they have the factory in Stuttgart that is making the film...
It has the capacity to do a million square meters of film and if they needed to replicate that elsewhere in the world they can and they have control of their emotion production. So those are probably the best leading indicators I could give you as to where I think their business is going. If they are in fact going public.
They're not doing it based on having a Me Too PDLC product. They're doing it based on a SPD product, and that's the strategy for growth at Galzy, too.
I wanted to ask you about these train accidents. Does GSI or any of your groups have any types of products that they could sell to enhance the safety of... Thank you for listening...
trains instead of them are falling off the tracks as they've been occurring pretty frequently. Well both Gaussian vision systems have very sophisticated sensor systems.
I wouldn't be surprised if some of those things could be deployed. But if you think about the tragedy that happened in East Palestine, it was ball bearings that heated up. It's not anything to do with heat coming into the cabin or anything like that, but they do have…
electronic sensors that might have been helpful. But you know, if you look at the tracks in the United States, they were a mess.
I think you have to fix the roads that these trains go on before you fix the trains.
So, I think you have to fix the roads that these trains go on before you fix the trains. Yeah, I understand.
Have you heard of a company called...
Have you heard of a company called...
Solar, Windotec, are you familiar with them? Not very familiar. There's a lot of companies out there that are trying to do things in energy efficiency and generating power through transparent photovoltaics. We like them.
They are complementary technologies because if you look at what for example Vision Systems said years ago, they were partnering with a French company that had a transparent photovoltaic material that they were able to make a self-contained aircraft window where you would just pop it into the side of the window.
you didn't have to wire anything and it would generate 20 times more power than it needed to operate the smart windows so you could charge your cell phone or other devices using solar energy.
But there's a lot of companies like that are trying. Some are homegrown in the United States that we've spoken to, and they have promising technologies. And we keep track of them because we don't need a lot of power to run a smart window. So any of these.
photovoltaics, especially the transparent ones that don't typically generate a lot of energy, still can generate enough energy to power a smart window. And then the real benefit there is you could pop this into a building or a home or a vehicle without having to wire it up and that eliminates the need for electricians to be on site, etc.
especially the transparent ones that don't typically generate a lot of energy, still can generate enough energy to power a smart window. And then the real benefit there is you could pop this into a building or a home or a vehicle without having to wire it up and that eliminates the need for electricians to be on site, etc. Thank you.
Thanks a lot Art, good talking to you. Our next question comes from Michael Forster, private investor. Your line is open. Jill, thanks for answering all the other questions. Since I'm the last in line, I think I've got enough information now. Okay, great. Thanks Michael. I think we have one more in the queue.
I just joined. Sir, we have a question from Tom DiGioia. A private investor, your line is open. Hi Joe. First of all, I'd like to thank you for your efforts. I think you're really working hard towards the right things. It's tough. It's a new product that's got to get in the market.
I know you mentioned Kia SUV stuff. Without getting too specific, it's coming out soon, some info on it. Do you see this as a car that looks like it could very well likely have SPD? I think that it's a prime candidate for SPD, but I don't think it's gonna be first, and I'll tell you why. I think that if I was Hyundai, I would be a
I would probably reserve to myself first the good stuff before I gave it to my sister company, Kia. But you never know what the internal politics are between that. But they're basically joined at the hip. I think that the work that Hyundai is doing is really important.
with SPD, you know, and they're a direct investor in Gaussi, which I think is important to know, I think will benefit Kia as well. Okay. I just don't think the EV9 will be first. Look, I could be wrong. I've been wrong about other vehicles that, you know, in trying to handicap which ones we're going to come out first.
that doesn't mean that it won't come out on the EV9. It just may not be a, you know, it may be like a mid-model introduction or something like that. I gotcha, I gotcha. Are you able to say if, you know, BLS was working on the grandeur sunroof in a roundabout way because they're working with gauzy or not necessarily?
You're talking about a different company that we're very familiar with that is working on that project with funding. Okay, thank you Joe, appreciate it.
that is familiar with that is working on that project. Okay, alright, thank you Joe, appreciate it. Thanks for having us. Bye bye.
And if there are any final questions, please press star 1 on your touchstone keypad now. I think we have one more in the Q and A. Yes, sir. We have a question from Tom McCartney from Raymond James Financial. Your line is open.
Hi, Joe. My question's already been answered. Okay. Thanks, Tom. Okay. Thanks, Tom. Good talking to you anyway. Yeah. Same here. And we do have one that just joined the queue, and that's from Jeff Harvey at Private Investor.
Hi Joe, my questions already been answered. So I'll pass. Thanks Tom. Okay, thanks Tom. Good talking to you anyway. Yeah, same here. And we do have one that just joined the queue and that's from Jeff Harvey at Private Investor. Your line is here. Thanks Joe.
Hey, Jeff, how are you? I joined late, but my question is related to GM, Ford, and Stellantis. And I know it takes a long time to get in their queue.
for their electric vehicles. I just wondered if you can give us an update on progress with those big companies.
Sure, and I actually read your question earlier and answered it, but I will say this.
In a nutshell, because of the track record we have with Mercedes and McLaren, being in the other established automakers is actually a positive thing because they respect reliability more than anything else and that's certainly what we've had in our DNA since 2010.
We've thought the other what about what about cost though? I mean is Cost a factor for these for these mid-range, you know inexpensive cars is that does that what's holding up? No, I wouldn't say that now because if you think about you know You know the expectation is that Hyundai is going to have this and those are
There's a lot of things that go into cost, but also the basic cost of these smart glasses is far lower now with the Gauss film than it was with the Hitachi film. So that's also enabled a lot of things to happen.
So, I will say this just because I gave some time to your question earlier. Okay. Once you do the, once you hear the replay, if you still have any questions, you know, feel free to call me on my cell phone. I'm happy to go through those. That's fair.
You're always welcome. You're a long-term friend, so I appreciate it. Okay, Joe. Thank you. Thanks, Jeff.
You're always welcome. You're a long-term friend, so I appreciate it. Yep. OK, Joe, thank you. Thanks, Jeff.
We have no further questions in queue. I'll turn the call back over to our host. Okay, thank you. I'm just going to make a few closing remarks.
You know, every day we all probably wake up and we ask the same question, why would you invest in Research Frontiers? And if you want to invest in the smart glass industry in a proven technology,
that's used across diversified industries, then we think the best place and actually the only place to get all of those benefits is Research Frontiers.
If you think of Research for Interiors as a materials company that has worked to develop an extensive patent portfolio with hundreds of patents on a basic material, it's as if we have a patent on stainless steel or titanium.
Smart people out there then figure out how to use our materials as a solution to everyday problems, basic human needs.
heat control, light control, glare control, safety, security, privacy, comfort.
enhancing product performance. These are the things that our technology has allowed these companies to do. And we invite you to check the box of things that we've thought about and taken care of already. We have a strong and growing product pipeline, mostly automotive, but also trains, planes, boats, consumer electronics.
on more of their market value, another reason to think about where you want to deploy your investment if you're investing in smart glass.
become known as the most financially viable player in the smart glass industry as well. And we also have the who's who of the glass, automotive, yachting, and aircraft industries involved with us as customers. So it's not just our competitors that make us look good. We worked hard over the years to build and maintain credibility and establish ourselves as the industry leader.
And as I mentioned, we did this by paying attention to a lot of things. And we've done this through financial stability. We have cash for at least the next five years and no debt. This gives us plenty of the necessary resources, but we're smart enough to know that we want to spend these resources efficiently.
We have diversification of industries, a proven reliability for 12 years in the automotive industry. And in our industry, that is quite a long time and very compelling data that everybody respects.
Research Frontiers is well positioned for recessionary and inflationary environment. We talked about that, I think two conference calls ago. I was drawing upon my background as an economist at the Federal Reserve Bank in New York. Having gone through both recession and high inflation, when I was there, you saw what happens in the world and what you can do to navigate through that. I think that's been helpful for our company to have that.
perspective. We also have a healthy mix of business and government and commercial customers.
Experience, respect, credibility and longevity as a company which I think is good as far as how suppliers view us or as customers view us rather. We have good partnerships.
and a good business model with high rewards, predictable expenses, and low CapEx requirements. And we are expanding our use into new applications like TVs, headlights, adaptive grills, heads-up displays. You've seen all of these happen very tangibly in the past year by some very well respected companies.
And this year I think you'll see more of this, but in different areas that can also address very large markets, like architectural glass. Look for us later this year to talk about exciting developments in areas such as impact resistant, hurricane resistant windows for the architectural market. And even the ability to retrofit existing buildings with SPD Smart Glass so that installation...