Good afternoon, ladies and gentlemen. Welcome to Research Frontiers Investor Conference Call to discuss results for the Third Quarter of 2014. During today’s presentation, all parties will be in a listen-only mode. (Operator Instructions) This conference is being recorded today. A replay of this conference call will be available starting at 12 PM on November 7, 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 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 this conference call, either in their presentation or as a part of the Q&A session at the end (Operator Instructions). I would now like to turn the conference over to Joseph Harary, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Thank you, Kate, and good afternoon everyone. Before we begin I want you to know that unlike our usual quarterly conference calls our CFO and Vice President of Business Development, Seth Van Voorhees will not be joining me today. As you might have seen from yesterday afternoon's press release, Seth is co-presenting with the Head of the Conservation Office of the Smithsonian's National Postal Museum, the results of a study on how SPD-SmartGlass technology and VariGuard museum case panels can provide substantial protection from light damage, the priceless documents and other artifacts. If you're in Washington DC for any reason you should definitely see the behind the “Behind the Badge” exhibit at the National Postal Museum. It features the most light sensitive documents that they've ever displayed and they've entrusted the protection of it to SPD-SmartGlass from VariGuard. Since our last conference call, there have been some very nice developments. First let's start with the numbers for the third quarter and look at revenue and expenses. When you back out non-cash expenses, our expenses for the third quarter were down $179,000 or 12.6% from the third quarter of last year. For the nine months cash expenses were down $113,000 or approximately 2.8%. Compared to the second quarter of 2014 cash expenses for the third quarter were down 256,473 or 17% from the second quarter. Fee income for the third quarter was up 14.5% from the prior quarter to approximately $453,000 after being up 28.3% in the second quarter. Revenue from automotive represents about 70% of our revenues in the first nine months of this year. Aircraft represents a little over 14% and architectural and VariGuard represent most of the balance. Automotive revenues in the third quarter was a larger percentage than in earlier quarters. Now let's talk a little bit…

We will now begin the question-and-answer session. (Operator Instructions) Our first question comes from [Craig Marsh with Morgan Stanley] (ph). Please go ahead.

Hi Joe.

Hey Craig.

The company for a long time as you know and it sounds like you made a lot of progress and it sounds like there's some nice potential out there. If you can give me a little color, I mean you've got $115 million market cap rate now and based on the numbers you said for the quarter revenues of 400 some odd thousand so your run rate is roughly $2 million. So it's kind of like 55, 60 times revenues right now. Can you give me a little bit of an idea as to what the market potential is for Mercedes in terms of revenues some kind of range, so I could then move into those numbers in trying to figure out what it means if we get some other OEMs? And then also maybe breakdown what the market potential is in the next one or two biggest potential markets for your outside of automotive?

Sure, I'd be delight to Craig. First let's take the market where most of our revenues are coming from, the automotive market. When you're seeing really up until this third quarter of this year was only sales of the SL and SLK. Combined they sell about 30,000 cars of those two models and those cars are in there third and fourth year of production to typically the volume decreased. You know, fortunately that was offset somewhat by the higher take rates of Magic Sky Control. But compare those numbers which is 30,000 cars total to the roughly 115,000 to 145, 000 cars that Mercedes is expected to produce annually for the variants of the S-Class and there's about five variants that we're on, the Coupe, the extra long wheel base, the long wheel base, the standard wheel base, and the Pullman limousine. So, just to give you a flavor, you are talking about something that is about four to five times bigger in terms of unit volumes. The other thing to keep in mind is that the S-Class typically is a technology rich option laden vehicle when it's bought by the customer. So we expect to the take rates to be higher on the S-Class than they are on even the SL which are much higher than Mercedes ever expected. To put some numbers behind that, we've given the range on the S-Class of getting between $150 to $250 per car. So we just take a midpoint and the reason we give a range is twofold. Number one, we cannot reveal exactly what Mercedes is paying Asahi for the glass although we know because we get quarterly reports. But also the size of the roof will vary from 1.32 square meters on the Coupe, to 1.7 square meters on the…

And it's safe to say that from a cash flow standpoint you wouldn’t have any significant or additional need for capital at this point going forward to fund any of that?

Not to fund our current businesses, but there is opportunities out there and as I mentioned earlier, we're looking for hitting, firing on all cylinders in all of our markets. So if we need to spend more money in certain markets and we've already made some hires in different areas and especially in the marketing area, although I do not expect our expenses from marketing personnel to jump that much. There are opportunities out there that we hope to be very significant and continue the success we've been having. So yes, but I think model our company the way you've been modeling it and you'll have a pretty good idea that we essentially have fixed expenses and very predictable expenses.

Lastly Joe, I am assuming you are not getting any kind of pushback from Mercedes on ongoing with any other OEMs. In other words, they wouldn't be opposed to that and/or require any preferential pricing on the product versus the competition?

Not from us. We get a 10% royalty from everybody, but I will share a comment that Mercedes made to me because obviously we are working with these other OEMs and I cannot reveal to Mercedes what other OEMs are doing, but didn't want them to get hit from left field and read it in a press release one day. So I did mention that you know, at least we're having discussions with other OEMs, this is a while ago and they said that they were delighted actually because in order to get this into the high volumes market within Mercedes and we are not talking about just the premium market but things like the C-Class and the CLA and others. They would like to see other OEMs kind of contributing to the scheduled price reductions due to efficiencies of production that come from high-volume. So they would welcome at this point, now that they have the bragging rights of being first, other OEMs getting in there and we certainly don't have anything exclusive with anybody, so that's fine.

Thank you for that color and good luck going forward. It sounds like the story is starting to come together.

Yeah, it is becoming a lot easier to monitor our progress I think and these conference calls I think have become a lot more detailed in terms of what we can say and what it means for our future.

The next question comes from Joseph Skolnik a private investor. Please go ahead.

Yes. Hello, how are you doing? I have been looking at a company out here in Pedis, California, from a neighbor of mine and called View Incorporated and sells a product that they don't quite tell you how it works, but it's supposed to reduce the cost of your air conditioning so forth in industrial glass and they claim that they can offer to builders for about 50% increase in cost of glass. Do you know anything about them?

Sure. Matter of fact, View and Sage and Research Frontiers and one other company Merck are all presenting at the conference that I am the keynote speaker on. I have seen one installation from View, it was in the lobby of a hotel. I was told by the concierge that the glass was donated and it takes about a half hour to an hour to switch. It does not get as dark as Research Frontiers glass, it does not get as clear as Research Frontiers' glass and it is not as uniform in the change as Research Frontiers technology. So there is markets out there for cheap cars and expensive cars, were the high-performing car basically in the switchable market and it seems like if you could judge based on the amount of smart glass out there, the market seems to prefer our glass to our competitors combined. So of course we follow them carefully. I am really looking forward to being on the same stage with them because one of the things that I have been stressing for the last three or four years to all of the companies that are in the smartglass industry, it is, let's have some transparency in what we say. Talk about switching speeds, talk about switching speeds at different sizes, talk about specific pricing because they give you very relative numbers and you could have some fun listening to how they describe their pricing and their performance, but the simple matter is the market so far has picked us and I am looking forward to being on the same stage and really having some candid discussions with an intelligent group of people about what the performance, differences are between electrochromic, SPD, liquid crystal and other technologies from a technology perspective.

This is an electrochromic technology?

Yes electrochromic. It is a different technology.

Thing that worries me is about is they have significant access to venture capital and they are talking about putting hundreds of millions of dollars into building the glass themselves.

Yeah, they are going to need it. We do not need that kind of capital expenditures because of our business model. Our licensees are putting that money in and we do not have to raise that. So, the factories that are out there with Asahi and Pilkington and other companies that are making the capital expenditure based on our business and we get a 10% to 15% royalty typically on that.

Okay, thank you for that.

Thanks a lot.

Bye.

The next question comes from Michael Kay from Kay Associates. Please go ahead.

Yes, hello Joe, based upon what you said regarding the initiation of the S-Class with the larger roofs, larger wheel bases and lower costs which could mean increased take rates, do you think am I correct in saying that it will be about the second or third quarter of 2015 when shareholders could really see a significant increase in fee income based upon those factors?

I would estimate it be a quarter before that. I'd put it in the first and second quarter that you start to see that ramp up because by the end of the second quarter, beginning of the third quarter the high variant S-Class's begin to its showroom, so companies like Asahi will be producing the roofs for that. I mean even today they are starting to produce the roofs for these other variants.

Do you think it is conceivable that based upon that, that the company may show break even or a profit in 2015, because so many have been waiting to see when that would occur?

You know, it is all going to depend on take rates and remember we only have a half year's worth of production at the high-volume rates and of course there is always a ramp-up in the beginning. So I do not want to make a prediction one way or another, but hopefully you and I will be around to see the excitement start to happen then.

Okay and you did pretty much about what progress was if any has been made in the architectural market, I know it is hard to break into that market, but on the other hand I feel that, that actually in the long run has even greater profit potential to the company than some of the other markets, perhaps architects have been more amenable to SPD?

Well I think just judging from the awareness at Glasstech among various people that design buildings, yeah, I think that market is going to look very good for us. I mean right now it is not our top two markets. I mentioned automotive and aircraft are, but you know, certainly something that can grow very nicely because 60% of world's glass goes to that market.

Yes, what are you seeing especially in terms of energy conservation that would be a big plus and the last one would be, are there, would there be other windows on the car where SPD could be installed?

Absolutely. The places on the car, I mean the lowest hanging fruit is roof glass because you get the extra headroom and the heat benefits because horizontal glass becomes a solar collector if you are not properly shading it. So we really make a big difference in terms of heat inside the car, but side glass for privacy, rear glass for privacy and glare are all very important markets and also a very significant market I think will be the sun visor market. So the front top of the windshield if you drive a lot like I do you are always getting blinded by the light and you need a way to control that without difficulty and I think we offer safety and comfort there.

Yeah, when would Vision Systems be able to actually put that on the market? The sun visors which are detachable and retrofittable, that would be of great interest to passengers.

It is something that there is a great interest in between Vision Systems and Research Frontiers and we've been working very closely on that, but I cannot comment on timing at this point other than their product looks very good and it is getting a very, very warm reception among the relevant focus groups. Let's take the next question just so we have time for the remaining questions I see in the queue.

The next question is from a [Jared Albert] (ph), a private investor. Please go ahead.

Yeah.

Hi Jared.

Hi, so two years ago you were super excited about the Audi A2 and then the cool shade on the concept active tour, but here we are two years later and were sort of, you know, the roof systems $2500 on S it sure seems like they could go in if they wanted to, I mean it other companies wanted to and you say that they are looking, they are interested, they have obviously shown it?

All right

Is there any indication, in the G1, G2, shown next year in Frankfurt. If we see a year from now and there is no other OEM with it, what would we say, how should we think about the G1?

Here is how I would, I would go back to the comment I made earlier Jared, which is the OEMs have basically said very clearly to us that they've done the development work that they need to develop for SPD and quite frankly, so is Pilkington and so is Asahi and they have very good production experience with SPD based on the serial production vehicles they are on right now. So it becomes a lot easier for any new OEMs to put this on the market and as we have been saying fairly consistently, the OEMs, the other OEMs have said we are going to look and see what happens with the S-Class and they are beginning to see various success. One OEM told me what the take rates were for Mercedes, which i found kind of interesting because it's one of the most closely guarded things that bits of information that they have, but they are watching very carefully and they are seeing the success. And they are also seeing the deployment. You are looking at taking your flagship and not just putting it on the top-of-the-line part of your flagship, it's kind of an experiment, but putting on every variant of the S-Class I think that's not something that is lost on the other OEMs because remember their most profitable cars or the ones that compete directly with the S-Class. So Mercedes is hitting them where it hurts and if you want to have some fun follow the drama between now and the end of the year as BMW and Mercedes fight with each other to be the number one luxury car in the United States and there's always this battle royale going on between BMW and Mercedes for that. So yeah, there is, they watch each other very carefully and fortunately the technology in the production processes have been all developed and are mature and they selected vehicles where they want us to go. So they made their choices.

I know, but I mean they had an LCD roof on the Maybach, but in the past you said you know the production schedules, you know the models, but I assume in retrospect that you referred to a year to a Mercedes rollout rather than the global car industry or something like that, is that fair? It sounds like from where we are assuming that there will be adoption if there is demand because Mercedes has kind of led the way and they all copy Mercedes. It is a reasonable presumption, but that is really what I am hearing at this point.

We have better knowledge obviously from Mercedes because we get royalty reports from them on what their production is of every vehicle so we know that. We do not have the same visibility within the workings of the other OEMs but we do know the general range of cars and what their plans are because we are here to help them achieve their objectives with those cars.

They are working with the intent to put them into production models. Schedules can't be revealed, but the models schedules can't be revealed...

And I think Jared the other thing just to keep in mind about why this is probably a significant time is it was only in September that Mercedes revealed what the retail pricing was on the Coupe. So you're talking about now every OEM having access to the same information that you and I would have which is go on the U.S. configurator it for the S-Class Coupe and type Magic Sky Control and see that it is a $2500 option you know, so I think that is a bit of information that is very useful to the other OEMs because they know that if it's a $2500 retail option then Mercedes is making money on that, it is costing them less than $2500 for a 1.32 piece square meter roof.

If the prices dropped, we'd sort of, I know at the annual meeting that was the goal, I mean this whole roadmap was laid out, get it into auto, get the price down, get it everywhere else.

Yes, sometimes it works.

Right. It works on a timeframe, I suppose seeing this crossed I guess.

Right.

I appreciate.

Have a great time.

Thank you.

Thanks a lot.

The next question is from Alan Yakabov from Wells Fargo. Please go ahead.

Joe, how are you today?

Good, how are you doing?

Good, very good. Thank you. I know a couple conference calls ago you answered a question and I think you had mentioned that you would not be surprised if the take rate on the S-Class could be upwards of 50% and just want to know how you felt about that this time if you still feel the same way and secondarily regarding the E-Class when would you think would be the latest next year they would announce if it was an option on that model car as well?

Let me answer your second question first. When do I think that Mercedes is going to announce whether Magic Sky Control is an option on the E-Class and the answer is I do not know because it depends on not only when the E-Class comes out, but when some of the competitors like the 5 Series or the A6 come out from BMW and Audi and kind of what are the marketing objectives. I think I alluded to the fact that it is no longer just kind of its coming out and the car is either redesigned or refreshed, but there is usually a marketing component that kind of can adjust that so that they get the most bang for their buck if you will from there and the other question about the take rates, I mean obviously we've been given some guidance from Mercedes, so I cannot be very specific about what the take rates are going to be, but they are pretty high on the SL and we expect them to be higher on the S-Class.

Alright. Thank you Joe, have a good day.

Right. So we are basically still very optimistic.

Okay.

I think there is one more question in the queue.

Yes. The question is from [Seth Nickerson] (ph) from Retail. Please go ahead.

There is one more after that also. Good, okay. Hi, Seth.

Hi, Joe, good afternoon. I remember seeing a Webasto roof of the future?

Yes.

I was wondering is that what's going into the Mercedes S, are they making it or?

No, they are not the roof supplier for that car. The roof supplier for that car, was Arvin Meritor, they sold their roof business to a company called Inteva.

Okay. I haven’t seen anything on the Internet about it or it just seemed?

Well, you are not going to see a lot of OEMs mentioning their suppliers by name. Usually they want you thinking Mercedes, BMW, Audi when you think about a car, not Research Frontiers or Webasto or Inteva or any of these other companies. Once in a while they make an exception like they did for us and allowed us to make the connection between our technology and Magic Sky Control and there have allowed Asahi to make the connection with their new WONDERLITE brand of SPD-SmartGlass.

The only other question I had is, I have seen a lot of Mercedes commercials, they are starting to hit the air a lot now and I have never seen anything mentioning Magic Sky or SPD or it's even in the background or is your marketing, your new marketing department going to do some marketing or is Mercedes going to do some, or is anyone going to some marketing?

Well, we hope so and we have been working very closely with Mercedes-Benz U.S.A. and Mercedes-Benz China to encourage them to focus more on the Magic Sky Control feature, but the real buying decisions, I mean it may be useful just to kind of go through the buying decision in the United States, in China versus Europe. So in Europe if you are buying a car you basically can tick off the box and say I want this size engine, this color, these seats and I want this NAV system and I want Magic Sky Control and within three weeks you get your car. In the United States it is not the customer that is doing the check off the box, it is things like regional buying groups that will decide how many S-Class's with Magic Sky Control are coming into the Northeast region or the Southwest region and their marketing, general marketing like on the commercial just does not work. Obviously we are still being awareness at the consumer level, but I think more importantly we've gotten great support and cooperation from Mercedes in the regional buying group area and they are very big advocates within the regional buying groups of the Magic Sky Control option. So we are very fortunate there. So it is just a different buying decision in the U.S. and in China. The marketing you see is meant to get people to come into the showroom and buy a car as opposed to buy something specific when you are trying to present a specific option in the United States or in China you typically do it through the regional buying groups.

Alright thank you Joe.

Thanks a lot.

Good luck.

Thank you to all of us.

And your next question is from Neil Levin from NCL Financial. Please go ahead.

Hi Joe, how are you?

Hey Neil, how are you?

I am good. I have two real short questions for you and you probably could answer quickly?

You may want to speak up a drop because I just want to make sure everyone could hear your question.

Okay, can you hear me better now?

I can hear you fine.

Okay. I was just wondering because I am not a car person, is SPD bundled with any other option or is it standalone?

Right now it is a standalone feature.

Okay and the second question I had was on something that wasn’t talked about at all today and is not in your top two markets but last week there was a big boat show down in the East Coast of Florida since I live down here I see that kind of thing and I expect that I see some kind of press release or at least something coming out of the company and I did not see anything. I am just wondering if you can tell us whether or not any of the $4 billion in boats they talked about, had SPD and what the future, the next year or so might be as far as the boat, the yacht market maybe the cruise ship market as far as our technology is concerned?

Those are all excellent markets and there is a lot of I would say private, I mean private stuff going on between the manufacturers of these yachts and these other vehicles and the suppliers like our licensees about SPD. In the past we've noted that were standard equipment on the Cheoy Lee Alpha 76 and then the Alpha 76 Flybridge, those are both production yachts. We are also on the Hatteras 100 foot yacht. Those were all announced at prior boat shows, so you could expect that there will be other fairly high-profile marine applications announced by other OEMs as well, but at the Fort Lauderdale boat show you know you are just talking about those two basically at this point and it came at a time when there was a lot of other marketing activities that we felt were most significant for our short shareholders to know about.

Okay, thank you.

Thanks a lot. If there are no other questions, I'd like just to make some closing comments. We received most of our revenues from the automotive and aircraft markets that use SPD-SmartGlass technology and these markets have grown and continue to grow nicely and new markets for our technology are also developing. In the last conference call we outlined in detail the rollout schedule and total own unit volumes for various vehicles, the most important of which to our near-term revenue growth is the Mercedes S-Class and the highest volume variant of this vehicle come out around the middle of next year. So shareholders should certainly pay attention to revenues between now and then, but should understand that the high revenues from the S-Class are basically a 2015 event for us. Shareholders can also expect major new customers to announce the adoption of SPD perhaps even before the high-volume variants of the S-Class come out. We set out to show the world how smart their glass can be and the world is beginning to understand and this has made SPD SmartGlass the technology of choice, the best performing and the best-selling smart window in the world and thanks for being part of this great endeavor with us everyone and thanks for your participation today.

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