Good afternoon, ladies and gentlemen. Welcome to Research Frontiers’ Investor Conference Call to discuss results during the 2013 second quarter. (Operator Instructions) This conference is being recorded today. A replay of this conference call will be available starting at 12:00 PM on August 9, 2013, in the Investors section of Research Frontiers’ website at www.smartglass.com, and will be available for replay for the next 60 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 emailed to it prior to this conference call, either in their presentation or as part of the Q&A session at the end. (Operator Instructions) I would like to now turn the conference over to Joseph Harary, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Thank you, Gary, and welcome to Research Frontiers’ conference call to discuss our second quarter 2013 results and some very exciting developments at your company. Joining me today is our CFO and Vice President of Business Development, Seth Van Voorhees. Thanks for taking the time to be with us today and thank you for your continuing support of Research Frontiers. I also want to thank all the investors who emailed in their questions. This allows us to cover more ground and answer more of your questions. In some cases, Seth and I have tried to answer these questions in the body our presentation, and to the extent that we haven’t or there are additional questions, there will also be an opportunity later on in the conference call for participants to ask additional questions. We have some very exciting news to discuss later on in today's call. Now I would like to ask our CFO, Seth Van Voorhees, to delve a bit deeper into the numbers. Seth?

Thank you, Joe. Good afternoon, everyone and thank you for joining us on this call. As always I will discuss the financial results in approximate terms and cover some highlights second quarter of 2013. For more details please see the financial statements along with the notes thereto. First, let me comment on the income statement. For year-over-year performance, fee income increased by approximately $296,000 or 32% for the first quarter months of fiscal year 2013 versus the same period in fiscal year 2012. Fee income increased by approximately $71,000 or 16% for the three month period ending June 30 of 2013 versus the same period in 2012. Most of the increase with fee income during these periods was from high level of royalties from sales activities and from some non-recurring payment from licensees in the automotive sector in the first quarter of 2013. Fee income decreased by approximately $185,000 or negative 26% for the second quarter of 2013 versus the first quarter of 2013. $150,000 or 81% of this decline resulted from onetime fee payments from licensees that were received in the first quarter of 2013. We did not receive a similar onetime payment in the second quarter of 2013. Adjusting for these onetime events in the first quarter of 2013 would have resulted in approximately similar levels of reported fee income for the first and second quarters of fiscal year 2013. Operating expenses increased by approximately $294,000 or 13% for the first six months of fiscal year 2013 from the same period in fiscal year 2012. $190,000 or 66% of the increase in operating expenses for the first six months in 2013 was from non-cash cost related to the issuance of common stock and options granted directors, employees and consultants. Adjusting for the increase in non-cash charges in the…

Thank, Seth, and thank you all once again for participating in today's conference all. As Seth has indicated, fee income for the first six months of 2013 was up 32% from the same period last year and fee income for the second quarter of 2013 was up 16% from the second quarter of last year. Adjusting for non-recurring payments, fee income in the second quarter was basically in line with fee income for the first quarter. And since our second quarter of 2012, we also substantially strengthened our balance sheet and increased institutional ownership of your company. On a cash basis, operating expenses for the first six months of 2013 were essentially the same as last year and operating expenses for the second quarter of 2013 were lower than the same period last year. Cash R&D expenses were up slightly for the first six months of 2013 versus 2012 and essentially the same for the second quarters of 2013 and 2012. So to summarize, your company is in excellent shape from an operations standpoint in terms of revenues, expenses, and capital resources. Now I would like to talk to you about two very significant events that should have a very positive impact on your company. As many of you know, on July 12 we filed a patent infringement suit against E Ink, Amazon, Barnes & Noble, and Sony. One of our shareholders [David Covenav], during the conference call please discuss the seminal moments that led to the decision to file the patent infringement suit. And another shareholder [David Clin] had asked, what's the status of the lawsuit, when will it go to trial, will any settlement be paid out to shareholders in the form of a special dividend. And [Peter Richardson] a shareholder asked, what is the total amount claimed…

Thanks, Joe. We do not separately breakout the financial performance of our VariGuard from the other activities at Research Frontiers. However, the reaction from the launch of our business in May has been very encouraging. The value proposition we offer is simple. VariGuard glass can protect precious artwork and documents significantly better than any other glass available today. Thus, if you have valuable light sensitive artifacts, you are going to be interested in our product. We are beginning to sell products and are very optimistic about its future. Joe?

Thanks, Seth. Another question came from [Jared Albert] a shareholder. Obviously, he didn’t have the benefit of knowing that we were going to confirm today that MAGIC SKY CONTROL is in the S-Class, but he asked a question, given the great specificity with which you know the auto OEM rollout schedule over the next few years, do you still think that Gentex's sales growth rate through the early years of it's electrochromic rear view mirror introduction was a good model for RFI's growth rate over the next few years. Jared is referring to Gentex's rear view mirrors which are in now over 300 models of cars. Started out in the Lincoln Continental and then next the year after migrated to three models and then kind of had a hockey stick advance. Given the relative performance of our launch customer Daimler and the other OEM's BMW, Audi, Jaguar, Land Rover and Toyota, the constitute 92% of the premium market. So to some extent our growth rate can actually be as impressive but coming in a much different way, just because we are already dealing with the lion's share of the relevant market. Whereas in Gentex's case, I think Lincoln represented a couple of percent of the overall premium market. So I think there are aspects of this that really can be dramatic and I think today's announcement about the S-Class using SPD-Smart glass technology in the MAGIC SKY CONTROL panoramic roof is a very clear indication of the success to come. I thought now we would answer -- open the floor up, Gary, to any live questions that might be remaining and to the extent we haven’t answered your question, please feel free to ask it now.

(Operator Instructions) The first question comes from Steve Dyer of Craig-Hallum Group. Please go ahead.

This is [Charlie Graham] filling in for Steve Dyer. I just had a couple of questions. First, as you look at your list of other opportunities, whether it's aircraft, marine, architecture, which areas are you most focused on what presents the largest future opportunity.

That’s a great question, Charlie. We are focused -- we have had initial success and we have been focused on the automotive and the aircraft industries predominantly. There is some very, I think unique benefits that SPD offers and some clear performance advantages which gives us a leg up in that market. We have also begun to have success in the marine market and are turning our attention now to the architectural market. If I had to maybe handicap where the revenue growth is going to come from, I think that the most predictable two markets. So that’s really all I have to work with today is predictability, is automotive and aircraft. I think that longer term the architecture market could be a substantial market but in the beginning I think it's not as predictable. The fact that we are now on standard equipment on the new Honda Jet, that we have had this five-year reliability, flight-worthy testing by being included on every Qantas A380. And I think also based on the relatively recent public relations issues that the electrochemical windows that are on the Dreamliner, the 787, have had in terms of slow switching speed and the inability to effectively darken the cabin, has really galvanized the aircraft industry in to becoming a more educated consumer of electronically dimmable windows. And I think that since we have the best combination of benefits out there in terms of performance, we are very excited about that industry.

Okay, thanks. On the topic of the VariGuard opportunity, how has that progressed so far and what are the other opportunities for the rest of the year and next.

Seth, you want to take that?

Sure. VariGuard was business launched in May, about two months ago. And the reaction has been very encouraging. We have a product that protects priceless artifacts better than anything in the market today by not just a little bit but by a fairly substantial margin. So we have recognized some sales already and that we are in the process of educating the market to accelerate that trend. As I mentioned in my prepared remarks, we don’t break out the financial performance of VariGuard versus, from the other business activities. But we think it's a very meaningful opportunity that the company can have and we hope to report more successes in the near future.

All right. That’s all I got. Thank you very much.

The thing I like VariGuard also is if you look at some of the things that we are protecting, these are extremely high profile exhibitions. If you talk about the Treaty of Paris which is currently in Boston, one of the conditions to that being loaned from the UK to the Museum in Boston, to the Boston Historical Society, is that it would be protected with our glass. And they were -- when I attended the tour as a civilian, they were so excited. They said that this is the first time that that Treaty has been in North America, I think since it was signed maybe. At least for the last century or so. And there's other things like that that are very high profile that would generate a lot of interesting awareness. Of course, on top of that we have expected high profit margins on that and it's something very close to our licensing business model. So it's something that we are very much in our comfort zone about.

Our next question comes from [Joseph Scukanic] a private investor.

I have been under the impression that the Mercedes advertising for the new S-Class and all their advertising is tended to go away from MAGIC SKY CONTROL roofs almost not mentioned, to automated features like intelligent lane keeping and intelligent self driving. And I take that as a bad development for us. What do you guys think about that?

Yeah, this is something we touched on, Joseph, briefly in the prior conference call. Mercedes tends to focus their advertising on what's new. They take great pride at being the first at a lot of things. First air bag, first antilock brake, first crumple zone. And typically if you look at the history of their advertising, since they started advertising, it's focusing on being first. Once something is out there and I guess MAGIC SKY CONTROL has now been not only proven on the test track but also proven by having over 10,000 cars in the road that have it without any problems. It's not being viewed as something that is a new feature. So it's not unexpected that Mercedes is focusing on what's completely new and revolutionary in the S-Class. From my perspective, of course I think it's nice that they have the ability to put your perfume in the air system and the safety features like the lane detection and correction features. These are really revolutionary additions to the car. But for me, the significance, as we touched on, really comes down to dollars and cents. The glass is three times bigger than anything else that they have used our technology in. Our royalty per car is going to be higher. The number of sheer volumes of cars produced is going to be higher than the other two cars combined. And the migration of the features in the S-Class to other vehicles, both within the Mercedes line and throughout the automotive industry, is also what I think is highly significant. So what I have loved for them to continue to market the MAGIC SKY CONTROL feature at their launch event in mid-May absolutely. But I certainly understood and even alluded to this before the launch event, that they are tending to -- their history is to tend to focus on what's completely brand new in the car to try to capture the automotive customers attention.

It's just occurring to me that without the advertising push behind it, the take rate for the MAGIC SKY might fall down...?

So far it's been growing actually, which is kind of an interesting phenomenon. I think part of it is, why a lot of us are really, really I think in love with SPD-Smart glass. Because once you see it either in your care or in your friend's car or in your friend's home, or in his private jet, you tend to have the same reaction. Wow, I want that. And that kind of reaction is spreading even without formal advertising because the take rates have been going up. They started out exceeding Mercedes expectations and the projections we are getting are they are growing. So all of that is very positive. Typically what you have kind of countervailing that is, there is usually pent up demand any time a new vehicle is launched and then it drops off. So you have the number of cars being produced every year, they tend to go down in a particular model and they typically drop off the year before a new model is introduced. But despite that, our revenues have been steady and the take rates are going up and I think the success is that they went from one car to two cars to now put this on their flagship vehicle. So for me this is the best news that we could have had and the numbers will speak for themselves.

I will keep my fingers crossed.

And I will do more than that.

Our next question comes from [Neil Levin of NCL Financial] Please go ahead.

I have two or three quick questions. One is, as far as....

Neil, would you mind speaking up a little bit, because some of us are having trouble hearing.

All right. As far as SPD in car windows, can you comment on that. When do you think...

You are talking about side and rear glass?

Yes.

Not roof glass. About a year ago, maybe a little longer than a year ago, there was an article that came out that where Mercedes actually confirmed that they were looking at that and they said there is couple of different issues that they had to deal with. First of all, it's a movable glass because the windows go up and down. And in some cases regulatory issues that need to be addressed and things like that. But that they were looking at it. The other automakers I could tell you also were looking at side and rear glass using our technology. From a surface area standpoint, that could dramatically increase the amount of glass used in the car. And I think the S-Class with its very very large panoramic roof is a logical proving ground for large area SPD. I mean we don’t see any technical issues with this. We have done architectural sized glass so we know that we could do things that are nine feet tall without a problem. So I think it's a natural evolution that this goes from the roof to the rest of the car. In some markets also, you will have I think a cultural preference. For example in the U.S., sunroofs are very very popular. In parts of Asia, side and rear glass with privacy is very popular. So you may see that this is introduced in the side and real glass of certain vehicles for certain markets, but it's all good for us.

Do you have any timeframe on when we might see something like this?

If I did I certainly couldn’t share it until the customers did. I have seen side and rear glass in vehicles and some of them are at pretty advanced stages. But it's really up to the customers to be the first to talk about that.

And you mentioned that --

Looks like with the S-Class we had to wait for Mercedes and the Qatar dealer to make the first public announcement about this before we did anything.

Are you going to put that in a press release?

About what, side and rear glass?

No, no, the S-Class [adoption]

You bet, yeah. It's very very significant news for Research Frontiers and for the entire automotive industry. So you can bet there is going to be a press release soon.

Okay. And you mentioned the Dreamliner. Can you give anything more specific on when we might, other than the -- I forget the name of the company you mentioned that’s been using it for a few years, but not to any great extent.

Qantas, Qantas Airlines.

Qantas. When we might see SPD windows throughout a commercial airliner, one or more airlines, other than Honda Jet next year.

Well, I could give you a general sense that in the aircraft as you could imagine, it's very much driven by the airlines. And specially the premium airlines have seen other technologies and seem to have a strong preference for SPD. So if the movement is going to be made, part of it is going to be customer driven but we are working very closely with all of the aircraft OEMs to make sure that they have a full understanding of the performance benefits of SPD and how it stacks up with not only electrochemical windows like what's on the Dreamliner that take a 1.5 minutes to 2 minutes to switch, but also mechanical shades and other things. And if you look at some of the recent developments, you probably get a sense of where this industry is going, the aircraft industry is going. I would say one of the, I guess, most interesting recent developments was, the largest manufacturer of pleated shades in the industry, ATG, not only initially announced that they have partnered with InspecTech to produce a combination pleated shade and SPD shade, both for the commercial and transport category and general aviation market, but more recently they have also announced a very new product which is an SPD only window shade. Which I think is highly significant on what their customers are telling them. And if you look at other developments that are related to that, you can probably get some leading indicators Neil. Initially Vision Systems had a dedicated factory line in Brignais, France, for SPD. When I was at the Paris Air Show in June, I had the pleasure of standing next to Carl Putman, the CEO of Vision Systems and Rick Scott, the Governor of Florida, because Vision Systems is opening up a new factor also dedicated to the aircraft window shade market in Melbourne, Florida, basically taking advantage of the fact that there is a highly skilled engineering workforce that is leftover from the Cape Kennedy days. So very exciting leading indicators. It will probably give you a sense. And Charlie I think this also may answer in a different way some of your questions about the prospects in aircraft.

Joe, the last question I have had, I have asked before more than once. When do you think now that the kind of progress you are talking about has been made, that you are going to be able to give some kind of future guidance regarding what the next quarter will look like, that kind of thing.

I think that, Neil, it's going to be a while because in the industries we are operating in, you really have to wait for the customer to speak. And while I could say, I could have said a week ago that we expected automotive revenues to be substantially higher in the coming year than this year and continue beyond that, I wouldn’t have been able to give you what the basis of that was which is the S-Class. So I think as a general matter, we are going to be giving as much guidance as we can but within the confines of being in industries like the automotive and aircraft industries where it's the customers that speaks first and then we speak.

Our next question comes from [Claire Hogan] a private investor. Please go ahead.

Congratulations on the announcement with Mercedes. That certainly answered the question that I originally had.

It certainly answered it better than I could have.

But beyond that which I think the investors are always looking at, I was wondering if you could give us a little insight as to the architectural market and why we haven’t seen more traction there because it seems to be really a market that would be absolute natural for this product.

I agree. 60% of the world's glass goes to the architectural market. You have a couple of factors that work. One factor is that if you are going to put this on every window in a building like a skyscraper, at the current price point it would be a very high ticket item. Now I am not saying that there is not a value proposition to doing that, but I think that it's the lower handing fruit and the more predictable lower hanging fruit which is important I think to our lower licensees that are building production capacity based on what they see coming, is the automotive and the aircraft markets. That’s not to say that in the intermediate term, architects and designers start getting the message on how smart their glass can be and what the real benefits are to putting this in and also what the value proposition is. Because if you subtract out the needs for shades and blinds, you factor in some of the energy efficiencies that you could achieve not only directly by the fact that we have the best solar heat gain management on the planet, but also the fact that things like daylight harvesting are a substantial user of energy around the world in terms of reducing interior illumination, you can save energy that way. And just making your mechanical rooms in your building more efficient so that they are operating at more a steady state efficiency as opposed to optimizing your mechanical rooms for July and August and having ten months out of the year where they are running at 20% or 30% efficiency and wasting energy. So a lot of these things and a lot of these messages have been the messages that we have been carrying on our banner. And the world is beginning to see that. I think just like in the aircraft industry and the automotive industry, you are also getting a much more educated audience and a educated consumer. So you know while a year or two ago, architects would have probably thought about liquid crystal, electrochromic and SPD as all kind of different flavors of vanilla ice cream, now I think they are realizing that there is distinct performance advantages with SPD. And the fact also that we could be used on curved surfaces is something that architects find significant.

Our next question comes from [Kenneth Earl] a private investor. Please go ahead.

How's everything?

Awesome, to say the least.

I am very impressed with what we heard today.

We are thrilled that Mercedes gave us the ability to confirm the S-Class.

Super news, super news. I had quick question for you. Have you guys reached out to Tesla at all yet?

I have known the lead designer at Tesla since we (inaudible) with at Tesla. And the answer to your question is, yes, the electric vehicle market is a natural use of our technology because you want the power coming from the battery to go towards driving the car as much as possible and as little as possible going towards cooling the car.

I agree.

This weekend a friend of mine had Sedan S. It's an incredible car. It's basically a car that has incredible acceleration and power but it's really targeted towards the premium market which is very good for us. And this particular car had a panoramic roof that my friend was complaining does get kind of hot in the summertime. And we actually did a demonstration where we had the SLK and the Sedan S next to each other and the difference in the amount of light and heat coming through the sunroofs was remarkable. You could see kinds of wins this going on. Audi had the A2 electric concept that had an all glass SPD roof, but obviously we want to move from concept to production vehicle. And once again there has been a lot of, I guess jockeying in the electric vehicle market. Fisker came out with some very sport looking electric vehicles that turned out be a failure. On the opposite end of the spectrum the Chevy Volt send it to focus more on the lower end of the market with mixed results. And it seems like Tesla have gotten the formula right in terms of where there initial focus has been, in terms of styling and marketing.

And reliability and performance too.

Right, right. And we knew there was going to be shake out but we are friends with all the electric vehicle makers.

Our next question comes from [John Stroble] a private investor. Please go ahead.

It seems axiomatic that until the price of SPD comes down we won't penetrate the architectural market substantially. Please tell us what RFI is doing to get another manufacturer online to compete with Hitachi and thereby bringing the price of SPD down.

Well, since Hitachi may be listening to this conference call, I have to be very, I guess guarded. It's always better in any industry to have multiple suppliers of key components. Hitachi has been a wonderful partner for us. They have produced a factory line that can make 4.3 million square feet of film. But the mantra in the industries that we are in, especially automotive and aircraft, is the customer would always like to have multiple choices in all areas of the supply chain. So it's something that we have certainly listened to the customer about and I would say that progress which is not going to surprise people is being made on that front. So if you allow me to kind of not go into further detail about some of the strategically sensitive things in that part of the equation, I would appreciate it. Other areas in terms of cost reduction, higher yields are a natural. I mean there is typically the experience curve which results in a 20% reduction in your value-added cost every time you double production. And if you just look at the take rates from the SLK which were good but -- the SLK was good, the SL was phenomenally better and the S-Class is expected to be phenomenally better than that. Either you could see that doubling of production experience can happen very rapidly in this industry, meaning a reduction in the price of the materials. And then there is other things that we are doing in terms of inherent in this technology itself, that we hope also will result in cost reduction. So it's something that we certainly are focusing on. And a lot of it is market driven but some of it is also technologically driven and we are approaching it on both fronts.

Our next question comes from Tom Mccarthy of Raymond James. Please go ahead.

I have a two part question. The first is, what is the timeline for the availability of SPD in the S-Class. I heard you say something about the second part of next....

Second half of 2014. Each market is going to get at a slightly different time so we are just speaking very generically that in the second half you should expect it.

Worldwide?

Worldwide.

Okay. And it will be increasing incrementally until that point from now?

I think that -- I don’t want to comment on Mercedes rollout plan. They seem to be pretty good at selling the S-Class. It outsold the BMW 7 Series and the Audi A8 even of last year model of production. So quite an impressive feat. It is their flagship. They are focused on continuing to maintain that dominance in the premium luxury segment and judging from the initial order for the car, they are going to be very successful.

When will sales of SPD in the S-Class be initiated?

Well, if the car is going to be available in the second half of 2014, you will probably see it earlier in the year in 2014. It really depends on the rollout scheduled and how much lead time Mercedes wants to give to supplier. Now keep in mind, something we didn’t touch on but I think your question raises an interesting point. Pilkington currently supplies the roof glass on the SL and the SLK. Another one of our licensees will be supplying the roof glass on the S Class. So typically when you have a new supplier, they have to get their production processes up and running and efficient, and when you see that there is typically a delay from when the car comes out to when the MAGIC SKY CONTROL feature is put in and that’s what you are seeing here.

I am glad to hear there is a different supplier. That’s good. So are we talking the 2014 model of the S-Class.

It's a 2015 model that comes out in 2014.

The 2015, okay.

You know I was thinking in terms of calendar year because my revenues are in calendar year. So I don’t really pay attention. Also among automakers there is different nomenclature, the naming convention as to what year a model is. But for me all I am interested in is the bottom line, so I want to know that in calendar 2014 we are going to be getting revenue from the S-Class.

Sure. My second question has to do with Qantas. Could you please give more detail about the extent of use of SPD in Qantas planes? I know it's been in the bathroom, has it also bee in windows?

It hasn’t been in the cabin windows yet, but I think if you were going to look at how an airline would comfortably introduce a new technology, that’s probably the best way to do it. It's a unique enough feature where you get the public relations buzzed, and I think with Mark Newman, he is a famous designer that did the entire interior for Qantas including the SPD windows. But now that you have five years of flight worthy testing without a problem, I think everybody becomes more comfortable and that’s certainly something that our licensees have been stressing to the customer which is, this had been out there, it’s in the air. It's in the air longer than any other technology on the planet for electronically dimmable windows, and same thing with automotive. We have had a substantial number of cars with the MAGIC SKY CONTROL roof and zero reported problem. So that’s a nice track record.

Describe how it's been used in the lavatory. Is this an external window?

It's an external window. So basically with a unique control system, you open the door and it controls the window, but that is an override. So if the plane is on the ground, it's always going to be in the dark state so that people in the airport terminal can't peek in the lavatory if somebody happens to be in there when it's on the ground.

Is this a particular model from Airbus or is this all the airbus planes that Qantas is getting. Well this is all the A380s that Qantas has ordered since October 2008 or since they have taken deliveries of October 2008. So it's been on every A380 they have taken delivery on. It's a customer specified feature. So basically, I mentioned earlier that it's the airline customer that is calling the shots in that industry and here is perfect example of that.

Right. How many such planes have there been?

Off the top of my head I don’t know.

Ordered by Qantas?

The order book or the deliveries basically are probably anywhere from half a dozen to a dozen I would say aircraft.

Our next question comes from [Steven Almaker] a private investor. Please go ahead.

I just have couple of short questions, maybe you can help me on. The 4.3 million square feet that Hitachi is able to produce, is that correct?

400,000 square meters or 4.3 million square feet.

Do you know what percentage of capacity they are running at now?

Yes, but I can't disclose that. It's a relatively low percentage which is why there is definitely opportunities for cost reduction as higher volume use of SPD smart glass like the S-Class comes on line.

Okay. Well, let me run this by then, I guess. I am also a Ford stockholder. Retiree but long time stockholder with Ford and I have been in touch with their, what they call new ideas at Ford.

Right.

Sent them some email information on the MAGIC SKY that Mercedes Benz is using. The testing that they ran it through before they decided on doing all this stuff because the one Lincoln with the panoramic roof is almost a natural for SPD.

Agreed.

That roof is -- I mean the way the pop it up and slide it back, it almost looks an afterthought. And I wrote them and told them such that SPD is a perfect fit for his vehicle. This was like ten months ago. I received an email back from them this morning telling me they are not interested.

All I could say Steve is you are probably talking to a different part of the Lincoln Group than we are. But I don’t expect them -- everybody to know what's going on at other parts of the company.

Okay. I was just posting it....

By the way thank you for bringing it to their attention because of your background in the automotive industry about what the testing protocols have been and also the engineering benefits of replacing that pop-up, slide back roof.

I honestly got the opinion, I have done more research on this stuff than they have. But what's kind of disappointing as a stockholder in Ford.

Yeah. There are pockets of knowledge within Ford but it's also, as you know, a very large company that sometimes its size can get in its way.

Okay. Well, I just wanted to let you know that I am doing what I can to push our end of it.

I appreciate that. And even though Ford and the Lincoln brand only represents relatively small percent of the premium market, every car we get and every car model we get is advancing the mission. So I really appreciate you doing that.

(Operator Instructions) Our next question comes from Michael Kaye of Kaye Associates. Please go ahead. Michael Kaye – Kaye Associates: That’s real good news. I have a few questions. They are rather short but I trust you will response to them. I am curious why, since Pilkington has been so successful with MSC, MAGIC SKY CONTROL roof, how come they are not going to do the S-Class as well. One would think since they have the research capabilities and experience, they could -- time could be saved if Pilkington did the S-Class as well instead of ramping up another supplier.

Well, let me go back to an earlier comment. The automotive industry loves multiple suppliers. It keeps everybody on their toes. Keeps everybody competitive. And as an experiment, I want you to any pick any Japanese car that you see on the road and I could almost guarantee you that half the glass on that car is made by Asahi and half the glass is made by Nippon Sheet Glass which owns Pilkington. And it's just inherent in the automotive industry that you try to bring you to speed multiple suppliers of every key component so that, a, you are getting the best pricing but also the best mix of technological expertise and production quality. So I were Mercedes, I certainly would have more than one glass supplier. And if you look at their overall business, they have awarded the long-term contracts to multiple suppliers. PGW has their long term contract for laminated glass and Asahi has their long term contract for non-laminated glass. Michael Kaye – Kaye Associates: Okay. It's just that I thought that since Pilkington already proved themselves and have the experience that that would more efficient to have them. But I understand your perspective. Joe, is there any indication when MSC will be not just an option but a standard equipment on Mercedes Benz models?

Well, if the automotive press keeps giving me accolades that it does, and as I mentioned earlier, features on the S-Class tend to migrate down to other vehicles both within Daimler and among other auto manufacturers. If we keep pushing at some point it could be a standard sunroof option. Remember sunroofs are not standard on vehicles, they are always an option. But on the case of, let's say the S-Class sunroof in general have historically been about a 95% option. So a very small percentage of cars maybe because they are armored or something like that and they don’t want to put glass on the roof, they are all sunroofs. But it's an option even at that high level. Michael Kaye – Kaye Associates: I know a shareholder who attended the topping ceremony for the carousel in Battery Park and there was tremendous amount of publicity and it was covered in many of the newspapers. How does -- and I know it will be completed in a few months according to the latest news from them. How does Research Frontiers maybe attempting to leverage the publicity for that because millions of people go through that area. Is there some strategy, marketing strategy so that people will know that those fish will be encased in SPD glass so that event (inaudible) of the products.

We have been told by the Battery Park Conservancy which is the -- it's a kind of a combination public-private group, Park's money and private philanthropy that’s funding the Battery Park carousel. They expect about 400,000 people to use that ride every year and about 5 million people to walk by it. So it's certainly -- and it's in the prime location in Manhattan overlooking the statue of liberty and right near Wall Street. We are currently salted to be in Phase 2 of that project. So the publicity is going on now with the initial part of that project. It doesn’t have anything to do with SPD. It's always anticipated that we will be at a later stage of the process when they raise money for the improvement, if you will, of the ride. Michael Kaye – Kaye Associates: I see. Regarding the projected in fee income as a result of MSC being in the S-Class, since it wouldn’t occur until 2014, I mean is there going to be a lag effect. In other words once the model comes out with SPD, the S-Class, then there will be a lag effect until fee income is booked as a result of supplying the SPD window.

Well, typically they supply the glass ahead of the car being delivered at customers. So it maybe a lead effect as opposed to a lag effect. But also you know, like every car there is a rollout schedule and while I can't comment on that rollout schedule, the numbers and the projections look very encouraging. Michael Kaye – Kaye Associates: Okay. Well, thank you very much and congratulations. I think this is very important development of course for having it in the S-Class.

It's their flagship.

Our next question comes from Ronald Rosato of Capitol Securities Management. Please go ahead.

Congratulations on the Mercedes news, that was great. Just one quick question, Joe. The federal green incentives, (inaudible) tax credits, accelerated depreciation. Does SPD-Smart glass qualify for that in the architectural area/

To the extent that there may be -- well, I think that the architectural area there is kind of two things that work. There is those incentives that you mentioned and there is also demand management incentives from the utilities. You know they will give you rebates or lower rates if you adopt energy efficient enhancements. I am not sure if the technology is sufficiently mature or considered mature in the architectural industry to be on the IRS's list of what they will consider eligible. I don’t think any smart glass technology is. But if you look at things like solar heat gain coefficients and stuff, there is certainly a strong argument that this is a clearly energy efficient enhancement that should benefit from that. But also keep in mind that they tend to phase those things out based on income. So most people that could afford the kinds of homes, their offices that would have this, are probably not going to get that even if it did qualify. It's just the way our tax code works. So I hope that answers that question.

Yes, it does. I appreciate that. Once again, good job.

Thanks. And I can't underestimate how excited we are, or understate how excited we are about the S-Class.

Our next question comes from [Jared Albert] a private investor. Please go ahead.

Hi, Joe, congratulations.

Thanks, Jared. Sorry, I couldn’t answer your question about the S-Class before 4:30 today.

Understandable. Your press release said that -- in speaking with the Mercedes to there, they said September 2014. I wonder if your thoughts for the second half of next year comes from the public information or from your actual knowledge of it. Will that mean -- I know you can't answer that directly, but is it possible that we are not looking at year but that it could come sooner in other markets, meaning in Europe first, for example.

There is always the possibility that what's the information given to the dealer has a cushion built into it. I tend -- I haven’t contacted the dealer in Qatar and I deal with Mercedes and I deal with the licensees that are supplying them. So I tend to get -- I get a different mix of information than the dealers. I can't say more than that.

Okay. Second question is that at the Craig-Hallum conference call, you gave 12 to 18 month optimism window for a second OEM. But in April, sorry at the annual report conference call you said that you expected a second OEM model platform by July. Do you expect this second OEM model platform....?

I think what we said is, we expected a second model and so instead of July 1, we got permission in August to talk about it, our third model. But we are optimistic about other OEMs. And one of the things I really want to highlight about the S-Class is the fact that it's a sedan I think is enormously important in terms of the planning and the time-table of the entire industry. A roadster, you can cannibalize another roadsters sales. For example, my SLK competes with the BMW Z4. They are not making super amounts of money at BMW or Mercedes on their roadster business. It's a nice proving ground for things and it's also an image builder. But when you get into the sedan market and the contribution to profits, those things are extremely, extremely important to Mercedes, BMW and Audi. And the S-Class completes directly with the BMW 7-Series and the Audi A8. And I got to imagine that whatever efforts those companies have and whatever competitive intelligence they had ahead of time, maybe they certainly new about this when we know about it. But I think this definitely sends a nice message throughout the industry that SPD technology is mainstream and here to stay.

I know you certainly couldn’t get a better endorsement than Mercedes putting the flights....

And we cut it down.

One final question. Can you speculate on why there seems to be such a mismatch between the investors' expectations about the timeframe for let's say profitability or really mass adoption across many OEMs in architecture. And the realty of the actual rollout which is steady progress but almost monotonic growth model, one model a year, hence very slow penetration architecture. Why is it that we all seem to think as soon as product was available, there would be mass adoption. I think we don’t appreciate just the amount of hurdles that have to be overcome. Will there come a breaking point when this just kind of really takes off like hockey stick?

Well, you know the more models you have in your stable of vehicles that are using your technology, the steadier the revenue increases are. But in the industry, models are refreshed or redesigned every 3.5 years and if you are waiting for a major redesign, they come when they are scheduled to come. And the S-Class is no exception, the SLK was on exception, the SL was no exception. And projecting out to other models within Mercedes, they have a targeted introduction date for the redesigned model and everybody works every component of that car towards that. So I think people that are used to investing in the automotive industry and technologies that can make a meaningful impact in that industry, kind of understand this that this thing in the beginning is going to come in spurts. And there are ever bigger spurts, if you look at the SLK, the SL and now the S-Class. It's a perfect example of that. But we are also now entering what I would consider the realm of the mainstream sedan and that’s very exciting place to be right now.

Our next question comes from [Jody Felterman] a private investors. Please go ahead.

As I am listening to your conference call I am reading the news on the press release and it gives me Goosebumps reading it as long as we seem to wait for good news. I know you don’t like to get involved in the spot price part of things, but as you read my question before you got started today, you think it just takes the revenues to keep the spot hitting north and just a succession of more and more positive news.

Jody, first of all thank you and thank you for being an investor since the early 1990s and also mentioning Bob Thomson, who we miss dearly, in your email. I remember when he came to Morgan City, I think there was a hurricane on one of his trips and I think everybody barely got out in time. But clearly for -- we are in business to make money and increasing revenues. And the business model we have set up and the licensees that are doing the heavy lifting are all geared towards that happening. And each time there has been a development, it's been a credibility builder. But then the last couple of developments have been more than credibility builders. These have been revenue builders. In last year our revenue income was 2.4 times what it was the year before. And with the introduction of the S-Class, the future is very exciting in terms of revenue for us. So I think ultimately if we are going to succeed, the hype takes a backseat to the results, and that’s the way it should be and that’s where we are.

I would like to add too before I hang up, it's exciting to me to see that you board of directors has become, which I view more shareholder friendly and that the whole management team seems to be really headed in a positive direction. And after all these years I sure appreciate seeing that. Thank you all very much.

Well, Jody, thank you. And just a comment on board of directors, they have all been shareholders for over a decade and in some cases two decades. And it's nice to have people that understand not only the business we are in, the markets we are going after, but also our people that dug into their pockets and made a substantial investment in the company and our shareholders. I mean this is exactly what you want on a board and we are really delighted that we have such a high caliber of director on our board. And it's been very helpful for me as a CEO of the company to have our independent directors on our current board to run ideas off of and also sometimes do a sanity check when we want to make sure that we are in fact going in the right direction.

Our next question comes from [Paul Flamino] a private investor. Please go ahead.

Joe, good job. You made mentioned about a press release, maybe I didn’t pick it up from the previous individual, but when do you expect -- means of this conference call, is a public demand. Are you expecting to put something out than the....?

It came out 30 minutes ago but because we have all been engrossed in this conversation many people haven’t seen it yet. But they will. It came out about 5:15 today. So while we were in the midst of our discussions about this. This is a significant information and it has to be disseminated broadly and that’s why we issued an 8-K and a press release.

Thank you, Joe.

And I am very excited as you could tell from this.

This concludes our question and answer session. I would like to turn the conference back over to Joseph Harary for any closing remarks.

Well, I think I would try to put recent developments in context for everyone. Every day more and more people are now experiencing SPD-Smart glass. Millions of times per year people are pressing a button and doing something that a short while ago was considered science fiction. They are instantly controlling the tint of their glass. Speaking of fiction, you have Dan Brown's Inferno, on pages 26 and 27, SPD glass is mentioned by name, which is a very exciting development but also a nice reflection on the fact that we didn’t pitch this to them, it's the awareness of the technology that’s growing. But these people that are using our glass or making their homes and their office and the vehicles that they ride in, stay more comfortable and more energy efficient and they are taking control over their environment. And there is thousands of cars on the road and more being produced every day that use our technology. And next year the largest switchable glass sunroof in the world is going to make its debut using SPD-Smart glass technology. So as impressive as the awareness building has been and the millions of times per year that people are controlling our glass, the introduction of our technology on the new S-Class should substantially expand the use, visibility and the desirability of our glass across the world. We are certainly honored to be on Mercedes flagship vehicle, the new S-Class and on future variants of the S-Class and other vehicles as well. And the large size of the glass on this vehicle, the high production volume, and the expected high take rates, should have a meaningful impact on what is most important to us as investors with bottom line. Your company is in its strongest position ever and with confidence in our ability to continue to share good news such as the milestone event we announced today. I thank all of you for your participation in today's conference all and most importantly for your support and trust to get us to this point and to get us to future successes as well. So I thank you all and look forward to sharing good news with you again.

The conference has now concluded. Thank you attending today's presentation. You may now disconnect.