Good afternoon, ladies and gentlemen. Welcome to Research Frontiers’ Investor Conference Call to discuss results for 2013. During today’s presentation, all participants will be in listen-only mode. (Operator Instructions) This conference is being recorded today. A replay of this conference call will be available starting at 12:00 PM on March 14, 2014, in the Investors 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 to differ -- 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 now like to turn the conference over to Mr. Joseph Harary, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Thank you, Laura. Good afternoon everyone. Thanks for joining us and thanks also to everyone who already emailed us their questions. We’ll try to cover them in today’s presentation; we will also have an opportunity at the end for people to ask any questions that we did not cover. Joining me today is our CFO and Vice President of Business Development, Seth Van Voorhees. There’s a lot of ground to cover because it has certainly been a busy year for us and our licensees and I also want to speak about the year ahead and also have time to answer any questions, but first I’d like to ask Seth to go deeper into the numbers, Seth.

Thank you Joe, good afternoon everyone and thank you for joining us today, as always, I’ll discuss the financial results in approximate terms and cover some highlights from fiscal year 2013. For more details please see our financial statements that we filed with our Form 10-K with the SEC. The company’s fee income from licensing activities for the 2013 fiscal year increased 10% to $2.2 million as compared to under $2 million for fiscal year 2012. Most of the increase in fee income during this period was a result of higher product sales and minimum annual royalty and other payments from licensees in the automotive sector. Operating expenses increased by $1.8 million for fiscal year 2013 to $5.8 million from $4.0 million in fiscal year 2012. This increase was principally the result of $1.2 million of higher, non-cash compensation charges related to common stock and options grants to employees and directors. Common stock and option grants to directors and employees have typically been granted in January by the company as was done in January 2013. In December 2013 the company elected to issue options to directors and employees instead of its typical practice of issuing them in January of 2014. The change in timing related to the issuance of equity compensation led to higher reported non-cash compensation charges for all fiscal year 2013. Research and development expenditures increased by a $0.5 million to $2.2 million for fiscal year 2013 from $1.7 million for fiscal year 2012. This increase was a result of a $0.5 million of higher non-cash compensation charges again related to the common stock and option grants to employees. Our total expenses for 2013 was approximately $8 million which was 2.4 more than fiscal year 2012. However if you adjust for the non-cash timing issues that we discussed…

Thanks Seth. It’s certainly been a busy year for us and our licensees and now we’ll take a look at some of the events underlying our numbers. Since our last conference call on November 7, accolades for the new Falcon 5X jet with an SPD skylight started rolling in across the aircraft industry. We also added a new licensee for architectural glass in Brazil, our VariGuard division signed industry leader Omega Molding as a distributor for frames and display cases to protect artwork and light sensitive documents, and the biggest news of all, the new S-class, S-600 offering Magic Sky controllers and option appeared at the Detroit Auto Show in January and the S-class Coupe made its world premiere at the Geneva Auto Show that we attended last week. Fee income for 2013 is up 10.4% versus 2012. You’ll see from the activities of our licensees where this revenue is coming from and also that in each industry this year has built that activity into a crescendo, resulting in some major announcements. Let’s take a more detailed look at all of the activity in each of the industries that our SPD-SmartGlass technology is used in. About 80% of our revenue in 2013 came from the automotive sector and 10% came from Aerospace. So we’ll take these industries in order. First, automotive, our automotive business can be divided into three main areas, OEM, aftermarket and the specialty vehicles. Automotive fee income is up from the prior year in each year for the past three years. This is also true with respect to fee income for aerospace, architecture and marine. However, none of our reported numbers shows fee income yet for the S-class, so in terms of OEM activity this is just the SLK and the SL-Roadsters. As we’ve already announced the…

(Operator Instructions) And our first question is from Steve Dyer of Craig-Hallum.

You had talked a little bit about the royalty per S-Class that you anticipate a $150 to $250. So kind of given that times I don’t know just assume the same take rate as the previous models although I would think it could be a little bit better given the price point of the car. And then looking at the anticipated volumes, how should we ballpark sort of revenue that can be thrown off of -- I mean may be even a range of the S-Class in the early days?

Okay, sure, that’s a great question, Steve and we can tell you follow the automotive industry by the way you asked it. The S-Class is estimated to produce, depending on who you speak to, over the next couple of years between 80 and may be even up to 130,000 or more cars per year. It’s the world’s best-selling luxury car and this last variant of it, the new S-Class that came out, is just an amazing car that has just received phenomenal acclaim. So I think everyone including two people at Mercedes are expecting the upper end of that range. But let’s just use a round number of 100,000 units as a good benchmark and it’s also math that I could do. If we also take the mid-point of the range that I gave $150 to $250 per car you're talking about $200 royalty per car for a $20 million royalty opportunity if we had a 100% take rates. You mentioned the price point of the car being a positive factor and it certainly is. The S-Class is very close in price at the entry level to the SL which has very high take rates of our Magic Sky Control group and things like the Cooper are even more expensive, so we expect a higher percentage. So this could be a significant money maker for Research Frontier as the different variants have rolled out. So we’re pretty excited about this. The other thing that I think is a factor here that I think is going to resonate with the key Mercedes dealers, most of them tend to be in very nice climates, warmer weather climates and the S-Class comes with a panoramic roof standard. So if you consider the fact that Magic Sky Control can reduce the temperature inside of vehicle according to Mercedes' test on the SLK by 18 degrees Fahrenheit or the difference between the car being 90 degrees when you get in it and 72 degrees when you get in it, I think that with even more glass in the SL -- I’m sorry with in the S-Class and it’s about three times as much glass, you’re going to see a noticeable reduction in temperature inside the vehicle and I think that’s going to be something that makes this an extremely popular option especially in the warmer climates, Middle East, China, Florida, Arizona, California, Texas, pretty much where the key dealers are right now.

So on a $20 million opportunity and I don’t want to put numbers or words in your mouth, but I mean is a 50% take rate outlandish? I mean is this $10 million your first full year out of the gate or is that too aggressive?

Based on our experience with the SL, I don’t think 50% take rate is outlandish, but it’s something that Mercedes guards very carefully and I have to continue to do that. So, and remember if you look at how the S-Class is being rolled out, there are a number of variants. Right now you’re seeing some of the more expensive ones like the Coupe that came out at Geneva last week, I think at New York the automotive press is expecting an AMG version to come out. So you are seeing some of the more expensive lower volume S-Class is coming out earlier in the year and then the higher volume ones coming out later on. And that’s going to be true for the next couple of years, you have the [indiscernible] you have the long wheelbase, you have just a number of different variants that are going to be rolled out. So it’s going to take a little time for Mercedes to get up to that on that magic number where they are really setting records in terms of volumes of cars S-Classes sold. But they think they’re going to do it and I agree with them, who am I to disagree with them, they have been selling luxury cars better than anyone in the world.

So what is your sense as to when they will actually go in to production the first variants and what is your sense as to what timeframe they'll pretty much be producing every term level that they are offering?

What we’ve said publicly is that the variants with Magic Sky Control are going to come out in the second half of this year. At this point I don’t want to put too fine a date on it. Production obviously starts before these cars are available in showrooms, so we're pretty excited about the very near term for us.

Another question as you look outside of auto and certainly you've been working hard in other areas, I have been on these calls for three years and there is obviously a lot of activity and announcements in aerospace and others. And yet we’re sitting here with not a lot to show forth in terms of fee income yet. What is your sense as to the impediment or the push back, is it price or in the case of airlines is it just never going to be a big enough volume area or because it means it certainly seems like there is a lot of activity a lot going on, I know what architectural certainly the price point maybe doesn’t work exactly right yet. But any colour you could give as sort of what you think what the road blocks are to taking this from sort of activity and awareness to profits.

There is a lot of similarities between automotive and aircraft in that. If we’re talking about the OEM business, you’re talking about waiting for a particular jet to come online and Honda jets are perfect example, SPD windows have been ready for a while for the new Honda jet, but the entire aircraft hasn’t received its FAA certification yet. So they can’t deliver to customers until early 2015 is the estimate. The Falcon comes out in 2017, once again, the Skylight is ready; it’s the jet itself that needs to go through the normal procedures. And it’s similar in automotive, the S-Class was going to come out when the S-Class was going to come out. Even though SPD has been proven and development has been finished by Mercedes long before the S-Class started production. So those are the gating issues is really when the vehicles come out. It’s a little bit different I guess in aircraft in that you also have another feature which is airlines are constantly bringing their fleet in for upgrades. They do the major checks every couple of years and those are good opportunities for us to have the airline upgrade the windows with SPD smart window shades. And there is a lot of interest, and you see it’s growing, I mean it’s percolating. You go to a show and people know us, like I said [NBAA] there are seven different companies showing SPD, so it’s not really a question of what technology do you out on, it’s who do you used to supply it and luckily we get the same royalty from everybody, so we’re relatively agnostic about that. So I don’t think cost is an issue, I think it’s really just the matter of just taking it’s natural course and time and development of the general aircraft happening, but I am very optimistic about it and this year I had even renewed optimism because we really saw this becoming a standard in the industry and standard equipment even. So there is a great level of confidence as well in this -- in our technology. So I think if you compare the markets, I think automotive will always be bigger than aircraft in terms of square footage, in terms of revenue I also think that automotive is going to dwarf the aircraft market. But we also have some developments happening in the architectural market which puts us in good shape and the recognition and the awareness is certainly very high. So I am pretty excited about all of our markets.

Last question for me, as you begin to ramp revenues more meaningfully with the S, et cetera, should we see an increase of much at all in the operating expenses, in other words R&D, I mean my guess is the R&D is pretty much done other than tweaks here and there? And I mean do I need to model in additional expenses I guess is what I am saying as…

Not anything considerable Steve. I think that one of the nice things about having a licensing business where the product has already been developed and it’s already been licensed to 41 companies is that you get very predictable expenses both on the operating and on the R&D side. Obviously having more resources makes us a lot more comfortable in staying ahead of the R&D curve and developing new refinements to the technology and things like that. So, we're certainly not planning on closing R&D down and resting on our laurels especially since every time we issue a new patent, our patent estate and our licensing revenues gets extended because our licenses are all geared towards the last expire of our patents. But I think it’s a pretty safe bet to say that you're not going to see anything more than a modest plus or minus on R&D.

All right. Thank you.

You are welcome. Thanks for the questions. By the w ay Steve Dyer is from Craig-Hallum and he said he's been on these calls for a couple of years I think he was, started being on our calls before he started covering our company and was the first analyst to cover Research Frontiers. So, we have a very warm place in our heart for you Steve. Thank you. Next question.

Yes. The next question is from David DeWitt of DeWitt Capital Management.

Two questions, one is, when I look at the Tesla and it’s all electric, I was wondering how much that would benefit, SmartGlass sunroof would benefit the Tesla?

Okay. Let me answer that first, one of the things that was inadvertently omitted from this year’s 10-K is the fact that Audi had the A2 with an all-electric, it’s an all-electric vehicle concept that had an all glass SPD roof and it just illustrates what SPD-SmartGlass could do. You think about driving in an electric vehicle, you want as much power as you can going towards driving range and as little needed to cooling the car. And when you consider that the Tesla is a remarkably stunningly beautiful car, I have driven in one. There is a lot of glass and with a lot of glass you run into solar heat gain issues if you are not paying attention to the details. So, electric vehicles in general and certainly Tesla, because of the price point it's at, in particular can benefit greatly from SPD-SmartGlass because it would increase the driving range. And also if you notice what they are putting inside the Tesla, it's the best of everything, to quote I guess Mercedes tagline The Best or Nothing. So, these are the right kind of cars to expect SPD glass to be on and they could only enhance the performance of these cars, so we're excited that electric vehicles are no longer science fiction, but beginning to become a bit more mainstream.

Okay. And our next question comes from [Rick Naff] of Merrill Lynch. Mr. Naff, your line is open.

I have a question, I tried to order an S600 Mercedes and pick it up overseas and I went to a dealer in Massachusetts, the leading one in New England and the person who was in-charge of this had told me that the SPD-SmartGlass would not be available in the 2015 cars.

That’s not correct. The dealer ordering guys all have it available later this year.

Well, he said that they got a memo from Daimler in Germany three weeks ago and that they said specifically that this has been cancelled. I checked with another dealer in Florida and he said the same thing. They said Mercedes have moved up the date for delivery to 2015 to April from the third quarter and the supplier could meet the demand, so they sent the memo out to the dealers. They said it'll still be available in the SL and the SLK but not in the S600 and he said it’s most likely that he never sees memos that come out with a rescinded, but it could happen this time. And I have been concerned because I have owned the stock for three years and I wanted to pick a S600, so…

Well, it’s kind of strange because I was in [indiscernible] where the Mercedes development work is all going on four days ago, five days ago and it wasn’t cancelled there. So I’m not really sure what you’re saying but coming out of Germany, they’re not seeing anything like that. So, I’m not sure the information is valid.

Okay. Well, I talked to Mercedes because they sent blast email obviously because I’ve checked with a few dealers.

Like I said I was actually at Mercedes on Thursday and -- this past Thursday and it hasn’t been cancelled.

Okay. Thank you.

But thanks. Anyway, good luck for getting it. I think you will get a car with the Magic Sky Control, it's going to be little later in this year.

Okay. Thank you.

Thanks a lot.

And next we have a question from Anthony Schuman of Corporate Financial Advisors.

Good afternoon. I’d like to go into a little bit more depth on the aircraft replacement windows, some of the Boeings. Can you -- please correct me if I’m wrong. I know you’ve been approved -- are you FAA certified now for the OEM Boeing stuff that they come on new products?

We don’t have an SCC yet on aftermarket with the Boeing aircraft. We have it for King Airs and the General Aviation market and our licensees obviously are mindful of the certification requirements. Since we’ve already passed pretty much everything that FAA can ask [indiscernible] we’re not concerned that about certification.

All right, do you have any timeframe, when you expect that to change?

Basically, it’s going to be driven by customer orders, but the licensees will do whatever is necessary to make sure that the customer gets everything on time and in place.

So in order words, if I call one of my contacts and they start pushing for an order for that, will that help you or that…

That always helps because in the airline business and the aircraft business as you know, it’s the airline customer that’s king and what they tell Airbus and Boeing is what Airbus and Boeing does.

I understand that too, but I also understand that the last thing you want to do is piss off a regulator.

No, we’re not going to do that either. Like I said we…

I don’t want to do something that's going to screw it up everything for you guys either.

No, I appreciate that. No, customer demand pull is always a good thing because it tends to get decisions that are going to be made, made a lot faster. So, that’s only is helpful.

Okay. So, I can…

And you won't be stepping on the toes of any of our licensees. They kind of have the same strategy which is obviously they talk to the OEMs directly about the product development but they’re also talking to the OEMs customers about the benefits that SPD smart windows.

Basically as I still understand that they last longer -- replacements last longer than traditional glass.

Right, and they switch faster than what's in the current 787 right now. I mean considerably faster.

I’m sorry. What was that last point?

The switch, they change tint in two to three seconds versus 90 seconds. So, you have a performance cost in a way benefit by putting this in aircraft.

So, until the airline start ordering more that stuff, the FAA is going to just sit on their…

Well, it's really a matter of the licensees getting either a supplemental type certificate or the OEM getting a type certificate that includes the SPD window shades. For example HondaJet has a type certificate, so is the Falcon whereas aftermarket King Air is all STCs but they’re all basically FAA approvals, it just, it depends if it’s the entire aircraft or just the aftermarket component.

Understand. Thank you very much for your…

Appreciate your interest and your help.

And the next question is a follow up from David DeWitt of DeWitt Capital Management.

Good, good. Second question is and this I don’t know where this comes in but as a home owner and having skylights in my kitchen which are 2 feet by 4 feet, they are in the summer when the sun is shining straight down, it's like an oven. And I was wondering are there any plans by any glass manufactures to make a standard 2x4 skylight that you can put at the end because it would be a relatively small installation, but it could have a huge benefit to home owners.

Yes. There are a lot of skylights and you know the studies we’ve done Dave shows that 20% reduction in zoned electrical usage and I’ve been in the kitchen where the granite tops, you can touch them before SPD and they were cooler to touch after. So, it can make a demonstrable difference and I think skylights are a natural for the architecture market. As far as standard 2x4s I don’t know. I mean there is a lot of different variants that they may want to make standard including square and rectangular.

Well, if anybody makes one, I’ll be the first customer.

You can be the second.

Second customer, then okay.

And our next question is from Michael Kaye of Kaye Associates.

Just a few ones. I’ve been on these conference calls and at annual meetings in person many-many more years than Steve Dyer, so I think you’ll accommodate my questions. I’ll make it kind of a bullet bite-size, bullet so to speak, I am very curious as to why you think that even though SPD has been so successful in terms of Mercedes and they’re incorporating it in more and more models, why in the world do you think not one U.S. auto company has adopted SPD?

Well, part of it is numbers, if you look at the market share of the 45,000 and above market that is occupied by the U.S. automakers; believe it or not it's just a sliver. I mean Cadillac and Lincoln are really not that big of a factor in terms of worldwide numbers in unit volumes? So that maybe one thing is that they just don’t have as many cars as the others to go across. The others may just be a mentality. A lot of the luxury premium car makers like Mercedes or Audi think of themselves as standalone luxury brands and there may be a mentality within the luxury divisions that the U.S. companies are not being a standalone luxury brand. I know Lincoln for example, spends hundreds of millions of dollars in marketing to try to overcome that so far unsuccessfully, but the perception is that it's just a luxury it up in a normal car and because of that I think there is a mentality that needs to be overcome within the manufacturers here in the U.S. I’ll probably get in trouble next time I go with the GM or Ford or Chrysler, but it’ll be it.

But you have said that they’re aware of it and it would seem to me that especially if of course SPD film comes down if that’s the factor that they would be more amenable to adopting it given the success with other -- with Mercedes.

Yes.

Is it?

Everybody comes around eventually.

And anyhow is there any -- are you prohibited from Mercedes to give absolute take rate numbers as you know I’m working on a project that taper dealing with what makes innovations successful or unsuccessful and I’m using SPD as a case study and the review…

Hopefully, we’re on the successful side I hope.

Yes but the reviews of the paper say, I need hard data to indicate that my hypothesis regarding the explanatory model I developed is accurate and so are your prohibited from announcing publically like out of 1,000 cars that could have the options of SPD exactly how many were selected by customers to have the MS Magic Sky control?

Michael the longest discussion we had about our agreement with Daimler involved the nondisclosure and short answer to your question is yes, I’m completely prohibited from revealing something as sensitive as a take rate and I’ve made the point that we’re a public company that has an obligation to our shareholders to report as much information as we can. And there was a lot of discussion back and forth, but that’s one thing that we just can’t -- we can’t give.

So if you can just say like you have been in general terms this is more than they expect all of the take rate they could without giving…

Right, I could give qualitative not quantitative.

Right and do you envision a time when it will be standard that the SPD features will be standard in the models of Mercedes and other manufacturers?

It’s a natural tendency and we’re starting to see it in other industries, so why not. I think in the interest of time, I'd like conclude here so.

Okay. Thank you.

But thanks Michael, it's good talking to you and make sure you come by when you’re in town. So just to conclude, your company is in the strongest shape that it's ever been in. We have the resources and active licensees and together we’ve planted seed that are growing into mighty oaks out there in all of our industries. And I’d like to conclude by summarizing what we can all expect for the balance of this year, first and foremost the visibility in revenues from the S-Class Coupe and the Sedans. This is something that we expect to be a very-very public expression of our technology. As mentioned in our last conference call, these cars will use three times the amount of glass of the SL and SLK and are expected to sell three times the volume of the SL and SLK combined and even higher take rates are expected. Second, I think you could expect the ramp up of projects in the pipeline which we’ve talked about earlier. Third, we plan to continue to open up new markets both by geographic area and product application area, and we’ve already opened up Russia and Brazil and we like to see a controlled entry into the Chinese market which represents about half of the world’s construction activity by value and it's also the largest market for premium cars such as the S-Class. For us, OEMs in the automotive specialty vehicle market and the aircraft to marine market has slated SPD to be standard equipment during the past year. I'd like to see this trend continue to grow to higher volume application. And in addition to what we spoke about today, there are quite a few projects in the pipeline in all of our major markets including automotive, mass transit aircraft, architecture…

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