REFR - NASDAQ

Good afternoon, ladies and gentlemen. Welcome to the Research Frontiers Investor Conference Call to discuss the Second Quarter of 2023 Results of Operations and recent developments. [Operator Instructions] This conference is being recorded today. A replay of the conference call will be available starting later today in the Investor's section of Research Frontiers website at www.smartglass.com and will be available for replay for the next 90 days. Please note that some of the comments made today may contain forward-looking information. The words expect, anticipate, plans, forecasts and similar expressions are intended to identify forward-looking statements. Statements that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions that are part of the Securities Litigation Reform Act of 1995. 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. Significant factors that could cause results to differ from those anticipated are described in our filings with the SEC. Research Frontiers undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. The company will be answering many of the questions that were e-mailed to it prior to the conference call, either in the presentation or as part of the Q&A session at the end. In some cases, the company has responded directly to e-mail questions prior to this call, or will do so afterwards, in order to answer more questions of general interest to shareholders on this call. [Operator Instructions]. Also, we ask that you keep your questions brief in the interest of time. I would now like to turn the conference over to Joe Harary, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Thank you, Jen, and welcome aboard. Hello, everyone, and welcome to our second quarter of 2023 investor conference call. First, I want to welcome Eyal Peso, the Chairman, CEO and Co-Founder of our licensee and Strategic Investor Gauzy Limited to our Board of Directors. Eyal and I have worked together closely now for about 6.5 years since December 2016, and we share the vision of how smart glass can be done right. Gauzy has invested significant dollars not only in Research Frontiers, but in factories and business development teams around the world and cutting-edge R&D relating to SPD technology. They continue to break ever-increasing performance records set for themselves, and it is an honor and a pleasure to have Eyal Peso officially on our Board of Directors. Turning to the numbers; we had good revenue growth in the first quarter of 2023, and this growth continued in the second quarter of 2023. As noted in our 10-Q filed earlier this afternoon, total fee income for the second quarter of 2023 was up over 116% compared to the second quarter of 2022. Most of this was from even higher percentage growth in the automotive market, as well as growth in the aircraft market. For the first half of 2023, revenue was also up compared to the first half of last year, once again driven by triple-digit percentage growth in the automotive and aircraft markets. We continue to drive down expenses, compared to the same period last year, expenses were down $131,000 for the first 6 months ending June 30, 2023, and $118,000 or 14.3% for the second quarter of 2023. Between higher revenues, lower expenses and higher investment income, our net loss for the second quarter of 2023 was $0.01 per share, which is about $250,000 or 33.5% lower than the second quarter of 2022. And for the first half of this year was $0.03 per share, which was about $414,000 or 30.2% lower than the same period of last year. Let's talk now a bit about some of the other developments since the last conference call. In automotive, Ferrari's Purosangue are being delivered to customers with our SPD smart glass roof, and we expect that deliveries of the SPD smart glass roof for the Cadillac CELESTIQ will start in the second half of this year. Looking towards our expectations for the future, more models are either specifying SPD while switching to us from other technologies. Also since our last conference call, we made substantial progress on landing 2 new OEMs, and one of which has 3 models targeted for SPD. And while we can't always give specifics until the customer has spoken, I could give you some guidance as to places to look to give you a better idea of what's coming. Simply put, even if we can't say something directly, you can look to see what other people are saying and doing. For example, if you look at the patent literature, a number of companies have filed patents for new and interesting innovations using our SPD materials for various applications, mostly in automotive. Looking elsewhere, sometimes you could find proud statements about their SPD projects on social media by people who work with these companies. And sometimes you can understand where a company is going and where they see their market and business opportunities, by looking at how and where they are hiring. For example, Gauzy has about 70 job postings for new positions in key industries that we currently service. This is about double the positions they were hiring for just a short while ago. Let me also help you try to put some of the events that you might see in the near future in context, so you can understand their significance. Research Frontiers and our licensees exhibit and speak at many industry conferences about the benefits of smart glass. Sometimes, this has a very direct impact. For example, the Cadillac CELESTIQ came directly out of an automotive glass conference that I spoke at in Detroit several years ago. Based upon our discussions with GM, we expect multiple cars from General Motors to use our SPD smart glass. These conferences also serve to educate the industry, as to the benefits of SmartGlass and help them cut through the marketing clutter, claims and other noise made by other technologies. This is beginning to bear fruit for us. Some automakers that have selected other switchable technologies and even put them into production, have now come to us and our licensees because of dissatisfaction with the performance and durability of these other technologies. We became the gold standard through hard work and helping to educate the industry, as to the differences in smart glass technologies. As we have noted many times on these conference calls, not all smart window technologies are created equal. These automakers are coming to us and their glass suppliers from a position of knowledge and a better context. Don't be surprised that the placeholders they have set with other switchable technologies ultimately get satisfied with SPD smart glass. And in addition to the two new automakers I referred to above and their 4 different new car models targeted for SPD, in this latter category, another two to three automakers currently using other smart glass technologies are seriously considering switching to SPD. And why not? We have better performance and proven durability. Sales also continue to grow and expand to various models of aircraft. Many of you saw announcements by our licensee vision systems, that they are now supplying SPD electronically dimmable windows on 2 very large aircraft from Airbus, the ACJ A319neo with AMAC Aerospace and the ACJ TwoTwenty with Comlux. My closing remarks today will have some very exciting further developments in aerospace. Deployment of SPD on trains and boats continues and for architectural applications as well. Now I take some of the questions previously sent in by our shareholders and incorporated them into my presentation. Let's take some additional questions. First question came from Jared Albert. This was the New York one. Extreme heat can reduce EV battery range by 31%, a study shows. Jared mentioned a 2019 study from the American Automobile Association found that EV range dropped 4% at 95 degrees, that's kind of timely with the heat wave going on here without using air conditioning, and 17% when AC was running. So think about that. Your range dropped 4% when it gets hotter and 17% when you have to turn on the air conditioning. And our Secretary of Energy actually was in an interview and started founding herself, because her staff had turned off the air condition to increase the driving range and combat the -- speed up the charging of the car, when they stop for charging. To help combat range loss, recurrent -- this is the AAA study recommends precooling the car while it's plugged in as well as using sunshades or parking in the shade to help reduce heat. The initial cool down of a car takes more energy than maintaining it at a comfortable temperature, the study said. This is something we've been talking about for years. Most air conditioning systems are 4x to 6x bigger than they need to be, because of the need to make people comfortable. And if you have an internal combustion engine vehicle, that's not such a big deal, you just run the air conditioning. But when you get into an electric vehicle where you want more of the car's battery going towards driving it and less towards cooling it, we can reduce temperatures by about 18 degrees Fahrenheit. So instead of getting in the car being 90 degrees at 72 before you even turn on the air conditioning. So that initial cool down is actually done by our smart glass. Another question came from Mr. Clare Hutton, why is -- if SPD's film is cost-effective commercial and residential buildings or is SPD's film cost effective for commercial and residential buildings. And if so, why is Research Frontiers not experiencing more revenue from that area? And to answer the question, it was until recently that we had a film that's available in 1.5 to 1.8 meter width. Now that that's happened, I'm happy to say that Gauzy and their development team have landed some pretty big contracts for architectural, including some high-visibility ones, which I'll mention again in my closing remarks. Second question from Mr. Hutton. The recent car has a large sunroof and they are complaining about the interior heat. Is any of Research Frontier's licensees approaching the OEM about SPD as a solution? Thank you for your response. Well, thank you for your question, Mr. Hutton. To answer your question directly, yes, Research Frontiers and myself personally actually have had presentations with Lucid and our licensees have also worked with them, and a lot of carmakers are beginning to wake up to the fact that when they go to a panoramic roof system where it's all glass, you need to have an effective way of cooling it. And sometimes they forget about it until a midyear or mid-model problem arises, when they get enough complaints, and I think you'll start to see more and more of that where cars with large glass roof areas are going to need a switchable solution, because we have the most effective heat reduction, I think that the trends are pretty favorable there. Mr. Nelson says, any new potential uses for SPD identified or exploring. One of the nice things about this business is that, I look at Research Frontiers as actually having 250 patents on pretty basic materials, sort of like if you had a patent on stainless steel or titanium, people figure out new and interesting uses for it. And even just this week, we've seen new uses for this in the automotive area that hadn't previously been done. So yes, the answer is yes. There's constant work with new innovative activities and of course, the bread and butter like sunroofs and other areas of a car or a plane or a boat or a building are out there. This question came from Mr. Albert. You said that SPD pricing is 1/4 to 1/3 when it started. Is that nominal or real? And is it Setra or SLK? What he means by that reference is are we going back to the 1990s with the first vehicle, which was the Setra luxury bus by Mercedes, or where we're going to later on when Mercedes put the series production in the SLK. The answer to your question is, I haven't calculated the real reduction in cost, but the nominal -- and when you consider that most of that period inflation was 2% or less, it really hasn't been that of a cumulative effect. But it is the nominal reduction of to 1/4 to 1/3 of where we started with the SLK. So a substantial reduction, and that's made this possible for even mid-level cars. And people keep asking me, are we still on target for the Asian carmaker with a mid-level car and the answer is yes. As we said in today's press release. What I'll do now is, we've answered all of the questions that have come to us by e-mail. I've incorporated them into my presentation. I'd like to ask our operator, Jen, now to open up the conference to any additional questions people participating today might have, that we haven't already covered.

[Operator Instructions] And our first question will come from Jeffrey Harvey, investor.

Joe, I've asked you this before. I just wonder, Tecnoglass is a big installer of windows with different laminations. So I just wonder if that a company that Gauzy has approached, or is that a potential customer?

We both know them, and every glass laminator out there is a potential customer, but we know Tecnoglass very well. And as you could gather from maybe some of my earlier remarks that the quality of knowledge about smart glass technologies and what they can and can't do is definitely increasing, and a lot of that is because of our efforts to educate people. In some cases, PDLC is perfectly fine for privacy and an interior application, but when you start moving to the building envelope the outside of the building, which is at least 10x the size of the market, people are realizing that you need something that actually can reduce heat and actually provide shading amount, just light scattering. It's nice to see that they're beginning to realize that there are these differences.

One other thing that I think -- I don't know if you've thought about this, but like in the state of Maryland, you're allowed to black out your side windows, which I think is very unsafe for policemen. If they had SPV on the side windows, you could still block the sun and yet the policemen could see inside the car. So some effort to -- obviously, cost is compared to whatever film they put on cars now, as I'm sure cheaper. But from police enforcement thing, I think that would be a great alternative to having blackout windows?

100% agree, Jeff. And as I -- as someone who cares about law enforcement, it's not the safety of the driver that they're worried about with windows, it's the safety of the officers, traffic cops -- and we've learned over the years, and I tell my kids and my grandkids this now, if you're stopped, of course, be respectful, it's not the place to argue. Take your keys, put it on top of the roof, so they know you're not going anywhere and put both hands on the steering wheel and be very respectful. Officer safety is very important. And I think that in an age when you start having more and more side windows become switchable, anybody that doesn't untint their windows when approached by an officer during a traffic stop, is going to get approached with maybe a hand on a gun and a lot of caution. And we could also -- yes, there is and I think you'll start to see that on side windows of cars. And what you could do in most -- in Europe, you can do whatever you want behind the B pillar, so it's not an issue there. The B pillar is the area between the front and the rear of the car. In America, you can do whatever you want on a B pillar and an SUV, which is more than half the vehicles on the road. So we're really -- when you want to get into the other areas, you're talking about 30% to 40% of the vehicles that are not SUVs on the road. And we've had discussions and our licensees and their customers, more importantly, have had discussions about what should the regulations look like in a world of switchable glass, where you can now alleviate that safety concern. Thanks for the question and it's something that we haven't really talked about in depth in the past, I'm glad that you raised it. Operator Your next question will come from Leonard Litzau, Investor.

Good to be on the call again today. I think I just have a couple of questions here. Are there any real contracts would redo to -- windows on buildings that are there, because now we know you don't have to put scaffolding and things outside, you can do it from the inside. And with the heat wave we're having and everybody getting done out of shape, it would seem like if there was anything there, we would be hearing about it relatively soon. That's question number one.

And the answer, by the way, let me just take that -- is that there are architectural projects in the works that I think will become very visible and very nice for SPD, and they use a lot of glass. I'm sorry, your second question?

The second question is now that you're cutting expenses and things are perking up and there's other people looking at putting it on. I think we're pretty close at the crossover point to actually becoming profitable by the end of this year. Is that a possibility?

Well, I don't want to put a time frame on it, because that never is a good idea. But I will -- I appreciate the fact that you recognize that we've done a lot of very continuous cost cutting. I mean if you go back over the last 7 years, almost every year has been lower expenses than the prior one. And as I mentioned earlier, our expenses were down fairly substantially again this quarter and for the first half of this year. I mean -- exactly that. The idea is exactly that. We want to basically hit profitability sooner, cash flow positive sooner. And if you look at that we've been very, very careful about how many shares that we've been issuing. We also want -- are planning for a day, when the Board of Directors will declare a dividend for our shareholders, so that we could reward shareholders without them having to ever sell any stock. So that's always been our goal Yes, that's always been our goal, and we've been very careful to do that. Some of our competitors, and I promise people I wouldn't talk about it, have done 60-1 reverse stock splits, because they would have over 1 billion shares outstanding right now, and we've always just felt that you'd be very prudent on how you spend money, and make sure that every project makes economic sense, so that you can -- we and our licensees can make money on this and achieve profitability sooner. So that's always been our goal, and we've been sticking to our knitting, and I think we're well on our way.

And we'll hear next from John Stroble, investor.

Two questions. The first is a couple of weeks ago, a political blogger changed it from global warming to global heating, a huge jump in the concept of the problems going on in the world. Last week, UN Secretary General Antonio Guterres, says it's no longer global warming, it's global boiling. Given what's happening in the last couple 3 months, everywhere in the world, it's -- down in South America right now, it's wintertime and temperatures are in the hundreds. Is RFI, Gauzy and our OEMs going to have a concerted effort to point out that SPD is a wonderful way to fight the effects of global warming on the individual. And of course, architecture would certainly be a very big part of that?

Yes. First of all, we're all in this industry because there's environmental benefits to using our technology. And one environmental benefit, of course, is that we can substantially reduce the heat inside a building or inside a vehicle. The other benefit is that we're reducing CO2 emissions, and that's very important as well. So if you look at the regulations in Europe, they have certain CO2 emission targets for auto manufacturers for their fleet of vehicles. And for every gram per kilometer that they go above that, they're going to have a penalty of EUR 95 times the number of cars they sell in Europe. That's quite a bit of the penalty. We can reduce CO2 emissions by 4 grams per kilometer. And that's a message that isn't just something recent. We've been talking about this at conferences for many years now, because I think the data is very compelling. But yes, I mean, in an area also, we have high energy prices, conservation of energy becomes very, very important. So in the Middle East, for example, you have a lot of sun, a lot of glass, and you want to make sure that things are going as efficiently as possible.

Your next question will come from Francis Cotriva, Investor.

On the previous call, you had mentioned something you want to put a timestamp on profitability. But last conference call, you put a timestamp on shareholders getting rewarded in the year 2023. We still -- but the only two ways I could see them happy is, share price depreciation or dividends. And as of today, I don't see any of that happening. So if it's to occur in the year 2023, this should happen within the next quarter, correct?

Well, we have five months left in 2023. But my point, I think, is, first of all, dividends, we're going to consider declaring dividends when we have a comfortable cash position and steady revenue. I think that's just the prudent thing to do. So I think having said that, you could probably see our expectation that it's the share price appreciation, that is the way that we hope shareholders are rewarded this year. And as things become more visible and as people understand the progress that has been made, not only by us and our licensees, but by the industry itself in understanding the differences between different smart window technologies, I think you're going to start to see the rise to the top. So we still have an expectation and we've always operated the company for the benefit of shareholders.

But the only way I could see that occurring is if there were major announcements made.

Yes. I can never predict what is going to move a market. In our history, we've had minor announcements that moved our stock a lot, and major announcements that didn't. The only thing I know how to do, is focus on our business and everything else will take care of itself.

And we'll move to our next question from Jared Albert, Investor.

I had a single question. It's kind of an orientation question. So let me just set the stage for the question, which is back, at the annual meeting, we identified something is getting bigger, which turned out to be a good prediction and the goal is to get SPD in today's systems to get the price down. And then it went into Mercedes, it approved the work and then it came out of Mercedes, in the thinking was that it was priced, and just kind of a difficulty with Hitachi. And now -- and then Gauzy came on board, and has taken them kind of whatever their timeframe was, but they've been able to pass the OEM level testing that Ferrari required. So this is maybe 3,000 cars a year, with fairly -- I'm guessing fairly wide margins. But probably given the experience with light tuner, they probably really wanted it to work. They didn't want to go through that again. So now -- so that's the stage we're at now, as far as I can tell. And we know that EV9 was shown in the investor presentation last March with side windows that were called smart glass. We know Hyundai is an investor in Gauzy. And we know that the CELESTIQ is coming out at the end of the year, presumably. And I assume it's Gauzy's SPV. So my question is having kind of been in this thing through 3 waves of production, for 3 film waves, I'm not going back to the Nippon Chemical boardroom in 1988, I'm talking about film production, where it could be put on rolls and shipped. Now you haven't mentioned Hyundai, and I am concerned because the grandeur was going to be like the big model. Maybe you don't want to mention it, but the point is, are we now at the stage where SPD is going to go into cars and we're going to see a revenue ramp, or are we still kind of stabbing around in the dark, where we can only get into the super high-end vehicles. And despite price reductions and everything else, there's some other issue, there's some optical clarity issues, there's some adhesion issues, there's something else. Because what I have seen is the backdrop to this has now been driven by high-temperature PDLC. They have been able to come in with roof systems that survive on horizontal services, and absolutely just penetrate this market all the way down to cars that are in the 30s. Now we've seen the [ AmberLite ] product now granted that hasn't yet shipped outside of China and Vietnam, but

Actually -- okay. I did in our press release today and I think earlier talked about an Asian manufacturer and I think that's about as far as I can go at this point. It's always -- I did mention that you have to let the customer go first, but take a look at what's going on around you, and I think it's pretty clear. I think your question though sets up a really great scenario here, which is -- there is a greater awareness of switchables. People have tried cheaper PDLC. Yes, it could survive perhaps, although our experience in automotive testing is you really -- it's a very, very vigorous environment, and they may think it's surviving. And the fact that some of the people that are putting these in, and I think this is maybe an interesting takeaway, to think back to what I said earlier in the call. There are two to three manufacturers that are using a different switchable technology that are actively and seriously considering switching. And I have to ask you the question, why would they be doing that? And I think the answer is, whatever it is that they're being promised, whether it's cost or durability or performance, is just not happening. And then you have us where costs have come down. We've talked about it and your question was an excellent one that you emailed in. And you have performance that has been proven, and you have adoption that's been expanding. And I don't really think PDLC has made great inroads. I mean they got into some visible vehicles, but not in high volume, and the fact that these vehicles are considering changing, tells me a lot of what I need to know. So yes, I think you set the table right that this is a nice time in our history, because there is great awareness, there is a great need. There have been some mistakes made by competitive technologies and by automakers using it and they're beginning to realize it and starting to remedy it, and that's where we come in. So as I said earlier, don't be surprised if the placeholder is the other technology and the way you satisfy it is SPD.

Let me ask you just a follow-up. If in two years, we're listening to these kinds of conference calls, and we switch seats, would it be time to get out? Because it's clear that for whatever reason, we're just not getting the adoption that we need, given the incredible tailwinds of switchable glazing is experiencing in sunroofs right now?

I expect two things to happen in the next two years. I think there is going to be a shakeout in the industry. Some people that are here now are not going to be here even 6 months from now. There is going to be a shakeout in technologies, because as the limitations of certain technologies become better known and sometimes it's by trial and underlying error, people stop putting that in. And I think Ferrari is a great example of this. Ferrari had a Saint-Gobain electrochromic roof years ago and it was a disaster for the Superamerica. And now Ferrari has an SPD roof. Mercedes had a PDLC roof years ago, and they switched to SPD. Now they have nothing. Well, there's still sales going on of MAGIC SKY CONTROL, but it's mostly out there in existing vehicles. So what you have is, a constant education. So on the one hand, you're going to have technologies that are being tried now, that are going to be proven not to be good. And if you go on the AmberLite website, for example, and I'm not going to trash them because there's no real data on that site. But if you go on their website and look at the samples that they're showing, these very small samples of AmberLite and look how dark they get. That's not going to move anybody's needle in terms of heat rejection or light rejection or glare control.

Yes nobody -- AmberLite than I am. I mean, they could turn it to 11 and it would be basically agreed for -- at a very light setting. No, I understand all that. Yet they're selling -- they're selling all over China. Okay. I mean that was my question. At this point is...

Yes, in 2 years, I think that you're going to see some major changes in the industry. I think also you're going to see some of the strong players get even stronger and stronger. And when that happens, Katy bar the door, as Bob Sykes used to say.

And we'll move next to Art Brady, Investor.

Hi Joe, Art Brady here. So in the past, at certain of the annual meetings, you used to have a display by Lincoln, on the Lincoln cars. And I'm wondering what the status is? We never hear a word about Lincoln. Are we still talking to them? Or is there some --.

We are and we're talking to their parents, and we're talking to their competitors in the U.S., too. And I think that with every car manufacturer, there's a continuum of when things get introduced and where they put it. Just like Mercedes, put it on the SLK first, because that was the car that was ready that needed it first, even though the S-class would have been a more logical first choice for them. right? So you have to look at kind of a whole panoply of reasons why a manufacturer puts something in or not. In Lincoln's case, we were very honored to be put in the Continental when they were trying to rebrand it. They just, for whatever reason, and I don't want to go into more detail, weren't able to get their act together in terms of series production. And I don't think that was because of us. At the time. That doesn't mean that things haven't vastly improved, where it's much easier now to get this into a vehicle, because if you think about it, back then, you had one manufacturer that would have it in series production. Now you have at least 3 laminators that are doing it, actually 4. So it's much easier to get this into series production, SPD that is, now that you have 4 major players that have experience in cracking the code on, getting SPD into series production.

Any time frame as to, when we could hear some kind of an announcement from that group?

Not that I could share. Remember, it's up to the customer to speak first. And sometimes, they'll allow us to say things on social media, but not in press releases. Sometimes they allow you to say something on a conference call, but not in a press release. They have their reasons, and we respect them.

But there is some communication continuing?

Yes. There is. Very recent as a matter of fact.

Because another question that I have is, it's so hot all over the world, that your phone should be ringing constantly in that regard. And if we can't show some very tangible results with this kind of an environment, I don't know where we would have a better opportunity.

Well, I think it's -- and I appreciate the question, Art. I think it's not only our phone is ringing off the hook, it's our licensees, too, and that's good. And remember they have a lot of phones there, because all of our key licensees have expanded dramatically their business development and customer service teams. And remember, I said look at where people are hiring, okay? Look at the regions of the world and look at the industries they're hiring for, and you'll see a pretty clear picture of where things are going. And I did mention carmakers that are -- additional carmakers that are coming on board with multiple models in some cases for SPD. I mentioned an architectural initiative that is bearing fruit. So all these things are happening.

And we'll move to our next question from August Berman, Investor.

I know I always get a lot out of you, when I said that -- you're an impressive, but I know personally modest person, and I know that I could get a reaction out of you when I do that.

Love it. Appreciate it. Just a couple from me. I know a couple of conference calls ago, there was a mention of an aftermarket storm resistance product, [Technical Difficulty].

The audio broke up a little bit, but I think your question is it's still coming down? And the answer is yes, and that's something that we're very excited about, because it totally transforms the way that smart glass is delivered to a building. You don't have to put up scaffolding, you don't have to get landlord approval, just a whole panoply of benefits from doing that. And also, it gives you this very big market, because a lot of the government buildings have initiatives to increase their energy efficiency, but they have a monolithic glass. It's not even laminated glass anymore. So if you can tap into that market and create a super energy-efficient window, the government, being on the GSA schedule is a huge, huge market.

Okay. I'm sorry, you said that was going to be coming down in '23 or that's something we are kind of looking at the future stuff?

We haven't put a time frame on it. I don't see any showstoppers and why it couldn't come out tomorrow if it needed to. And I think that we're all pushing for that, because I think we all understand that in the architectural market, it's a game changer.

Okay. And then you had referenced that -- I think you mentioned GM versus Cadillac, who are interested in bringing additional models after the CELESTIQ. Is there a period of time where Cadillac wants to see or GM wants to see technology for [Technical Difficulty] to another vehicle. The reason I ask you this, because I have kind of my sights set on the Escalade IQ coming out next week in terms of vehicle that seems to fit the price point and would be an awesome function to have, anything you can in say terms of timing?

It would be an awesome function for the Escalade. It probably won't be an awesome function in the Escalade. It probably won't be next week when it comes out. But I think you start getting penetration on different SUVs out there, because remember, SUVs have a lot of glass, and you also have more flexibility because the requirements on an SUV are different than on a passenger car. So it's a little bit more relaxed in terms of tints, let's say side windows, and the back and things like that as well. So yes, I mean, look, we're going to -- we're not stopping with what we have. Let me put it to you that way.

And your next question comes from Tom S, Investor.

Yes, you mentioned the expected Asian car, at least one, maybe more than one last conference call, this conference call. Is that -- can you speak to if that's an EV or gasoline? And is it mid-price? I know you're not releasing what car it is, but I think you'd be able to share something on that?

It has a mid-price and it has a luxury addition. And in terms of ICE versus EV, I think it could be on both, depending on how it sells. Not our feature, but the drivetrain itself.

When you say it could be on both, but not our feature, you're saying not SPD?

No, no. What I'm saying is -- thanks for clarifying. No, what I meant to say, and I apologize if I wasn't clear, is it can be on both in ICE and in EV, okay? And there's no reason why it could be on one and not the other. Whether they choose to introduce it on both is really a business decision on how the cars, the ICE versus the EV is selling for that model. Has nothing to do -- has nothing to do with SPD being better or not. It's good for both. On ICE -- yes.

It's nothing you could say it's definitely going to be one or the other, could be both. But when you say expected, you're confident it's going to be a mid-priced Asian car, one or the other, or you're just not sure at this point?

Confident it's going to be a mid-priced Asian car, and I think that it's up to the manufacturer, and they may not have even decided yet, what the blend is between EV and ICE on that vehicle.

Okay. So it sounds like you are confident in saying, it's going to be at least one either ICE or EV could be both. That's what.--.

Yes. I'm confident it's going to be on the vehicle, question is what are they going to put out first. And I don't know that, they don't know it either.

And then we're thinking for time frame, the models were being released in what, September? Do you have an idea on October, any idea on timeframe when we might hear anything?

Not that I could share. Nothing I could share. I'm sorry.

We'll go on some history when cars are released, so what we are looking at for months usually from your past experience.

Every carmaker has a different kind of introduction schedule. It used to be a little bit more rigid. So you knew, for example, when Mercedes was doing a mid-model changes and things like that. Now it's pretty much across the board. I think one of the things that kind of changed this a little bit was the Tesla Model S is still the Tesla Model S. And what they've said is, if we have an improvement that we want to put in that vehicle, and it's ready today, we'll put it in today. If it's ready next month, we'll put it in next month and if it's ready next year, we'll put it in next year. So they've kind of changed the way that automakers think about upgrades on the vehicle, to be almost like a continuous improvement, which I think is a good thing. I think it's a good thing that -- I mean, the marketing guys may like the fact that they had more predictability as to when new features are coming out, if you're selling a car. But I think that for the consumer, you want the car that you go to the dealership to buy, to be the best they could be at any given time.

Last couple of things on this. The wording is expected. Can you give like an idea on confidence level? Are you talking 99% or 80%? And also you think an option or maybe a trim package? I know you probably say you don't know, but anything you could share on these 2 questions?

So you kind of have a continuum here also. Something could be an 'option,' but be on 80% to 90% of the cars. For example, sunroofs, are on over 80% of premium cars. It's an option usually. Why? Because the carmakers make more money on options and they make on standard equipment. Right? So it has nothing to do with what you'd expect kind of an economic decision to be made. It's more like what is the carmaker going to make more money on.

And then the other one, last one, qualifying the expected. Can you get into that a little bit on -- we're talking 99% or 60%. Do you have any thoughts on how confident that level is?

I'm very confident. But I've seen things that look like they were certain to happen, and the Continental, for example, was a very good example of something that -- I mean, you had the CEO of Ford going on CNBC and talking about our smart glass roof as a key feature of the car, and it didn't make it into production. So you could be -- I mean, to the outside observer, if I saw that, I saw Mark Fields say on TV, hey, this is the greatest thing since sliced bread and we're really excited about it. And then it doesn't make it into production, you're never a 100% certain about anything.

With that said, it sounds like you're pretty confident that either 90% or something in that realm of confidence?

I'm very, very, very, very -- how's that four very's, without putting a number on it, confident.

And Mr. Harary, it appears there are no further questions. I'll turn the call back to you for any additional or closing remarks.

Okay. First of all, as a reminder, look, if we didn't get a chance to get to your question or if you feel we haven't fully answered it, feel free to call or email us, we're happy to do the best we can to make sure that everyone gets their questions answered. A couple of closing remarks. First of all, as you can tell from the lead into this, it's been a very exciting year for us. Part of that excitement is the success we've had that people know about and part of that excitement is what's coming. And let's talk about what's coming, what will the future bring? Certainly, continued penetration in our 2 largest markets, automotive and aircraft is something that we have very good visibility on. And the way that this progress is happening is also very important to understand. In automotive, we know about McLaren, Ferrari, Cadillac and the Asian automaker coming out with SPD panoramic groups and their vehicles. In addition to them today, I also mentioned 2 new automakers besides them and their 4 car models, as well as a reasonable expectation in another 2 to 3 automakers currently seriously consider switching from an alternative switchable glass technology to SPD. We're clearly seeing the benefits of switchable technology being better understood by the automakers. We're also seeing that they're getting more aware of the strengths and the limitations of different switchable technologies. And as the best-performing smart glass technology with proven durability, and a very stringent requirement that it'd be on the heat clamping roof of a car. This will help us continue to win more business in the future in automotive. Another item, some pretty exciting architectural projects with high visibility are in the works. And the way that decisions are being made is evolving for our benefit as well. We spoke about more educated decisionmakers. The other thing to understand is the locus of that decision-making is also changing for our benefit. For example, in some industries, the manufacturers call the shots. However, in others, it's the customer who makes decisions, if the manufacturer allows them the free will to do so. So what you want to do is you want to make sure that, the customer is able to make a decision, because if you see SPD compared to anything else out there, and I'm not just bragging, it's what we've been told, there's no comparison. So letting the customer decide what they want is important. And in an area where the customer makes the decision, but heretofore, it's been the manufacturer that might be preventing that from happening clearly, one good example of that is the airline industry. And when you start to see airlines themselves and not just the manufacturers decide on aircraft contents and configurations, you'll understand the important sea change that has already occurred. So stay tuned for a little while longer here. There are approximately 150 airlines out there, and they're competing with each other using the passenger experience primarily, to win the business and to distinguish themselves from others. Research Frontiers, our licensees and most importantly, our investors will all benefit from all of this. And I look forward to sharing these developments with you and thank you all for your support and encouragement.