Good afternoon, ladies and gentlemen. Welcome to Research Frontiers' Investor Conference Call to discuss Full Year Results for 2015 and recent developments. 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 later today 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, forecast, 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 part of the Q&A session at the end. [Operator Instructions] Also we ask that you keep your question brief in the interest of time. 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, Austin. And good afternoon everyone and thanks for being here today. Joining me today is Seth Van Voorhees, who is our CFO and also heads up our VariGuard division. 2015 was a disappointing year for the markets. The Dow and the S&P were down, and the small cap market was particularly bad and year-to-date all the Russell indices are down. Even Warren Buffett was down 11.8%. Research Frontiers closed the 2015 year up slightly but since year-end our stock is down. We're all disappointed in this. We're stockholders too. We had a mixed fourth quarter too and we will discuss this in detail. In some areas like aerospace, we had predicted that revenues would be up because we would have a full quarter’s worth of production of the King Air 250, and the introduction of the high volume King Air 350i. We were right about this and the King Air, which we are standard equipment on, is selling particularly well. We were disappointed however, that the introduction of the high volume V222 S-Class Sedan with the Magic Sky Control option occurred later than we were originally told. Originally we were told by Mercedes that these cars would be in dealer showrooms by December but the option for the V222 only started appearing in the Mercedes Dealer Ordering Guide starting November 5, 2015. S-Class V222 Sedans with the Magic Sky Control option are in production now and are expected to be in dealer showrooms in April. And even though the V222 did not generate the revenues we thought it would in the fourth quarter, the reasons for the delay are not related to SPD. These are production and timing decisions rather than anything relating to demand for the car itself or for the Magic Sky Control roof option. With…

Thank you. [Operator Instructions]

While we're assembling the queue, let me just take a few more of the email questions. A shareholder asked, do you see the application of new glass technology in automotive, specifically Gorilla Glass, affecting the business in any way? Well Corning and I both participated in the automotive Glazing conference last week in Stuttgart, and it became very clear that they're making a very strong push in the automotive market. Gorilla Glass, like any chemically-strengthened thin glass, works very well with our SPD technology. It's a very good complimentary technology. And when you're trying to achieve advanced automotive designs, things like reducing weight in a roof for example, becomes very important. And Gorilla Glass and SPD combined certainly could achieve that. And our licensees like working with chemically-strengthened glass like Gorilla Glass. Most of our licensees have developed an expertise in combining thin glass like Gorilla Glass with SPD. While we're waiting for other questions, another shareholder asked: Please update us as to whether any progress has been made on film production from another source besides Hitachi. The short answer to that is yes, and speaking of Hitachi, another shareholder asked: Has Hitachi shown SPD film in architecture or Green Building Trade Shows in the past. This refers to a recent trade show last week that Hitachi Chemical did in Vancouver, and this I believe was their first major exhibition. So I think it bodes well but they are beginning to also increase their marketing efforts. So with that we'll take some questions from the participants on today’s call.

Sure. Our first quarter comes from Greg Palm with Craig Hallum Capital Group. Please go ahead.

Good afternoon guys, thanks for taking the questions.

Hi, Greg, how are you?

Thanks. Maybe start with the SL and the SLK, given the refreshes there. Have you already seeing any negative impacts there from a production or sales standpoint as they start to introduces these newer models in the spring?

No, no. Basically what we're seeing is pretty historically steady - at least historically steady for the number of cars with Magic Sky Control. The overall vehicle numbers has gone down since the car was introduced in 2012 but that's typical. What they typically do it start high, move down and then when you have a refresh of the model, they bump up. So what we've seen is the amount of SPD-SmartGlass on the SL and the SLK has remained very strong regardless. So we're very happy with those results.

I know that makes sense, I was looking for more - obviously, they have a refreshed vehicle coming out usually. Before that you start to see lower production numbers as they ramp up production of the new ones.

Yes, I mean typically you see that in the total volumes. We haven't seen that on the number we look at, which is the amount of car that come off the production line with the Magic Sky Control panoramic roofs.

Got it. Moving on to the S-Class, I guess my first question is how much, or did you recognize, any fee income from the high volume variant in Q4? And then can you just sort of remind us how you do recognize fee income there, whether it's on a production or sales standpoint? And maybe you can talk about how you think that ramps throughout the year.

Right. First of all, we started to see the beginning of production start at the very end, like the last week or couple of days of the third quarter of 2015.So in the fourth quarter we did have production of S-Class roofs, but looking at the total number of cars that were produced in the fourth quarter there weren't that many, not just of us, but in general. To answer your other question, we get paid on two events. The first event is when, in the case of the SL and the SLK, Pilking to sells the roof glass to Mercedes. And in the case of the S-Class vehicles, which are the Coupe, Maybach, and now the V222 Sedan, we get paid when Asahi (AGC) sells the roof glass to Mercedes. So we get paid that event when the glass itself is sold to Daimler. And then we also get paid by Daimler, a smaller royalty, but one that can add up over the tens of thousands of cars they are producing, on the electronics part of the car as well, powering the smartglass. So we get two royalty streams from Mercedes based on that. And that's a good way to have pretty meaningful data. We get almost daily production reports from Mercedes on the number of cars coming off the production line with the Magic Sky Control feature, and we get monthly or quarterly, depending on the license, reports on the glass side for production reports. So we're able to match things. To answer your question about what do we expect for 2016. Obviously we're disappointed because we we're originally told that cars would be in showrooms in December. And that implies a certain ramp up rate when that was moved to April, and we have a pretty high level of confidence in this because not only do we see the glass reports that we're getting from AGC but we also see the production reports from Mercedes and what's on their computer systems. We see that the S-class cars, the V222s are being produced now and based on the three week delivery time to get them from Germany to here; we expect that these cars will be here in April. So starting in April, I think you’ll start to see a more firmer ramp up in the Magic Sky Control feature and, based on a lot of data, a lot of which I can't go into because it steps MBUSA and Daimler in Germany has confided in me, in terms of market conditions and what's going on in one certain set of programs come in place. I think that you'll see the second half of the year to be a lot more significant for us some of the first half. But the ramp up has started and I'll have more to say about that a little later on in the call.

Okay, thanks. I guess just last one for us, you mentioned other OEMs you were talking with was just curious, how you feel those talks are progressing. Are some of these OEMs, ones in the past or some of them, any color there would be helpful. Thanks.

Yes, I got them. That's an important question about other OEMs adopting the technology and there is a couple of things going on there Greg. Number one, you have the tradition premium OEMs like BMW and Volkswagen and Jaguar Land Rover, and Lexus, besides Mercedes that basically comprised the bulk of the premium car unit volumes about $50,000 MSRP. Those companies have been working with SPD, they're pretty mature in their stage. To them it's not a matter of how do I put this on a car, they already understand, they understand the supply chain. To supply chain is already validated, the production processes and of reliability of this in the real world and production. So, for those OEMs, it's really a matter of watching the take rate on the S-class and the visibility on the S-Class. They say the definition of a pioneer; one definition is the visionary that sees into the future and does things. And the other is the guy with arrows in his back. And I think these other OEMs that want to be the one with arrows in the back, so they're letting Mercedes go first as they often do. And if you look at history of the automotive industry which is something that you’re more familiar with than I am - you see that often when Mercedes adopt something, the other car makers become fast followers. So that takes care of let's say the traditional premium OEMs. There has been a number of new ones that, now that their business is kind of improved and they get - I guess the firmer feet on the ground, somebody of the other premium automakers are also now thinking about the benefits of SPD. So I wouldn't be surprised if several of them, both existing and kind of new entrants into this, adopted SPD. But as we know, it's a multi-year process and some started early, some are starting now.

Our next question comes from Alan Yakaboff with Wells Fargo. Please go ahead.

Hi, Joe, how are you?

Hi Alan, how are you?

I'm good, I'm good. The gentlemen pronounced my name perfectly, I give him a lot of kudos. Regarding the law suit, how much revenue is in play, can you get into that? What you're looking at and what percentages you're looking at of those revenues if obviously if the best case scenario came to fruition?

Let me first kind of give the caveat, on a conference call it's not the place to discuss a litigation, Judges don't like that. They like the cases tried in their court room and not outside of it. The amount of sales is substantial, measured in quite substantial amount. Speaking very generically, typically in a patent litigation, you have to determine infringement of a valid patent and the second thing is what are the damages if there is infringement. And that in the damages phase, if you're the court you're trying to approximate what a hypothetical licensor would charge a hypothetical licensee for the technology that's being infringed. Our position - and this is clearly in our papers, so I'm revealing anything other than summarizing it maybe, is that we're not hypothetical licensor, we're an actual licensee with 40 plus arm's length negotiated license agreements all charging during the relevant period 10% to 15% percent royalty rates. So that would be a very good scenario in terms of damages and would result in a substantial recovery for Research Frontiers and maybe to anticipate some of the questions we get, what we do it that money. I think special dividends is something that I as a board member would certainly vote for and I think others would too. So I think that we all have a meaningful stake in this litigation and at success.

And you mentioned - I was wondering if you could give some color on why the additional information was put forth by your company by first Research Frontiers in early January. Can you disclose any specifics to that or what happened if the judge was about to make a decision in January or February?

There were some material things that had occurred and that we learned after the hearing and I think the court also wanted a full record in front of him. So that's basically what happened. I can't really comment beyond what was filed in the litigation papers but I'm sure like most of you we have Pacer in our bookmarks on our computers and are updating it frequently to wait for that decision. We're very optimistic as I said.

And regarding the V222, is it going to be revenue recognition the first quarter?

Yes, there will be. Now that thing has ramped up, now the cars are being produced with Magic Sky Control. You will start to see more and more cars coming in with it. And we look at the experience we've had with the other cars that have Magic Sky Control. Once people realize it's there, and I'll talk about that maybe in my closing remarks, once they’ve realized it's there, they want it. Our experience has been SL, the SLK, the Maybach and the Coupe. And I'm sure we're going to have a similar experience with the V222 Sedan that is going to be nicely taken option and people are going to continue to enjoy it.

Just one last question, regarding the E-Class, any thoughts on that or any movement on that, any possibility that that's going to incorporate the magic roof?

The E-Class is great car. I would be surprised if Daimler put Magic Sky Control on the E-Class so soon after just putting it on V222 because I think you want to make the S-Class customers feel very special and a little bit exclusive, at least for a little bit of time before you open it up to a broader market. And that's typically been the tradition with E-Class. So we'll see what happens there.

Thank you, Joe.

Our next question comes from Charles Michaels, Private Investor. Please go ahead.

Hi, Joe. I just had one question with regard to the last quarter, it looks like there was a bad debt expense for almost a third of $1 million. Just wondering if you could explain what that was about?

Sure. First of all, one of the questions we get is, is it anybody really significant to our revenues. Like Pilkington or Asahi or Mercedes, and the answer is no. When you see receivables for example on their balance sheet, a lot of those are just timing issues and they're paid usually right after invoiced, it goes out quarterly. In terms of the bad debt expense, we just thought it was prudent given - maybe this is the economist in me but I look at all events, I look at certain regions of the world and I say you know something, let’s take a [reserce]. Historically, where we've taken a reserve, we've actually had recoveries of those amount. So maybe it's just overabundance of caution.

Okay, thank you. That's all I have.

Our next question is from Jeff Harvey, Private Investor.

Can you propose a reason why Lincoln didn't go forward further with their concept car?

Okay. I'll repeat the question in case people didn't hear Jeff's question. Do I have a reason why Lincoln has not adopted SPD technology yet. Because the car that was introduced at the Detroit Auto Show did not have SPD in the roof like the concept car that was there was at the New York and the Shanghai Auto Shows in 2015. What I was told by Lincoln was the following, It typically takes them at least three years to validate a glass technology. And between the time when they decided to put SPD in the car and when the car was coming, there wasn't just enough runway for them to complete that process. We are discussing whether there would be a mid-model introduction of SPD like Mercedes has done, and stay tuned, we'll see what happens there.

And just quickly, can you give us some feel about how much longer these other automotive OEMS want to see the uptake in the S-Class? Are we talking a year, year and a half or what's your best guess?

Automakers are a lot like investors, everybody has their own comfort point about when they adopt something. Typically Mercedes has been an early adopter of new technology and they've been very successful with that model. Other car makers tend to wait for more proof points and some wait for even more proof points. So one factor is really kind of the corporate culture at the different OEMs and the other thing is really just a matter of – the cars that SPD is being slotted for. If a car is coming out in two years, even if they are ready today it's going to come out in two years and the marketing will start a year from now. It also depends on what's in the new product pipeline at these car companies. And then there is also some other considerations that often come into play. For example; if you have a car that's not going to be refreshed for three or four years but you're trying to boost up sales, you might come in with an introduction of something new and innovative in between when the model is introduced and in the refresh state which is typically three and a half years out, so you could see mid-year or mid-model introductions even before the refresh date. It's going to depend upon a variety of factors and I can't really comment on what's in play at each specific automaker, because that's their business.

Okay, thank you.

Our next question comes from Georgia Wahankah [ph], also a private investor. Please go ahead.

I think you answered my question in that you've put such emphasis on April and I was wondering whether the first quarter would not show the royalties which you mentioned that accrued, once the glass is shipped to Mercedes. So you really answered that. It's been a great call, I thought I took myself out of the queue I guess, I didn't.

Anyways, thank you for the questions you compiled which I incorporated into my presentation also. I think they are helpful for all the shareholders.

Obviously disappointed with earnings but I think you explained that quite well. Looks good for the future. Take care.

Thanks.

Our next question comes from Neil Leaven [ph] with NCL Financial.

I have three quick questions. One is on the way the licensing deals work where payments in most cases I believe is 45 days after the end of the quarter.

Right.

But some deals are monthly. Do you have any plans or are you in the process of renegotiating old deals so that they all become monthly instead of this 45 day delay after the end of a quarter?

To answer your question, simply yes. We try our best to get monthly reporting when we can. We've been much more successful at it with the newer licensees. Some of the licenses like Asahi though which is a significant source of revenue, they've been a licensee of ours since 1992, so it's very hard to get them to change but we're working on it.

You've mentioned are at least once that back in previous calls that you thought that if the S-550 performed on a take rate the same way that the SLK and SL did, that the company could possibly be profitable but you didn't specify any period of time. Based on this delay that took place by Mercedes, can you comment on profitability for 2016?

We don't have a data on how quickly the ramp up is going to occur. We know the general plan and our licensees that are producing the glass know the general plan, but even they are getting constantly adjusted numbers from Daimler. They could produce whatever Daimler asked but they get these readjusted numbers pretty much every month on what they are being asked to produce. So even they don't know. And when we conclude the call, I think you will have a better idea of some of the things that may improve the take rates.

Okay. You must have had some information or data that you based your comment on, I'm just wondering, my question was really if based on the delay that took place, would that have like thrown a monkey wrench into those comments?

The delay was not related to SPD at all. The start of the race starts in April instead of December.

Right but that's what I'm asking you, the fact that it's starting in April does that change your previous outlook as far as profitability for this year?

Since I've never given an answer in terms of what the probability would be for 2016 other than to say as you've correctly paraphrased, if we get similar take rates that we're getting and experiencing with the other cars, the V222 can make us profitable. That's certainly something that still remains.

Okay. And then my last question is sort of - a house-keeping kind of thing. Based on when you release your information, the next time you release you information for the first quarter it's going to be in May. And I've asked you a question privately a few times, do you have any - I know that you have a lot of issues where you can't talk about things as other companies can -- but do you have any plans based on providing information to investors and potential investors and institutions about releasing any information about the first quarter or your comments about the first quarter prior to May?

First of all, every shareholder is equal in terms of disclosure so if we release it, it would be to institutional owners as well as individual shareholders at the same time and in the same manner. But if you look back at where our key revenues are coming from, a lot of these license agreements provide for reporting 45 days after the end of the quarter and because these are very large companies that have to get their act together in terms of what they reported to us, often we don't find out about the sales until really almost the last minute. I mean it always makes the last week before a SEC filing, a lot of fun for Seth as we try to get all the data together from different licenses around the world. But you also know that if we can say something we try to say something and if we try to be creative in how to get that information out in a way that is not going to jeopardize our relationship with the customers. So if we can we will but chances are if history is any guide, we're not going to have that data until right before the filing anyway. So we'll do what we can.

So I guess it would help to twist some arms if you can and change that 45 days to monthly? Thank you, Joe.

Our next question comes from Bruce Balding in Retail.

Thank you for taking the call, Joe. I guess what is the soonest you could expect to see SPD going into an architectural project?

So what we're noticing Bruce, it's a great question. What we're noticing is ever since the World's Fair, every major project that is considering a SmartGlass seems to be finding us. I can't say the same to some of the reporters that are out there but in terms of the people who are really doing the research, a typical scenario is we'll get a call or an email or we'll develop a project ourselves. But typically what happens is that Sage and View which are the primary competitors in the architectural market will have pretty extensive sales forces that are out there beating the bushes and presenting the benefits of SmartGlass technology to these projects. Usually when they leave, I get a call saying how does your product compared to Page and View. And I love those calls because all you got to do is show up with a full size piece of glass and say, this is something no one else in the industry will do. I'm going to show you a full size piece of glass switching and you're going to see the difference immediately in terms of range of light transmission, uniformity of change, heat control, and of course switching speeds, and they say “What do you mean switching speed?” And I respond that, well you know, the smartglass panels that you're looking to put in your project are going to take 30 to 45 minutes to switch if they were electrochomics. Did they tell you that? And they said, no, they didn't tell me that, they've neglected to mention that. So often that's a good start when you show the performance benefits.

Okay. Any timeline wags at all?

There are things that are fairly well along in the architectural market, and they are potentially highly visible significant projects. Our licensees and we are working very hard on that.

And to segway into my other question, one of the things I've noticed you don't push, at least publicly, is reliability. And I guess I'll ask my typical question, have we got enough vehicles running after several years of the SL and SLK that we have very good reliability/failure numbers?

Yes, the failure number is zero. And the reliability numbers are 100%. I got to tell you, there is not many things on the car that could brag that, except us. Out of tens of thousands of vehicles that have been on the road, some for five years or more, no one reported a problem by anybody. So we're very happy. And we do talk about reliability by the way at industry conferences, automotive engineers and architects, the reliability becomes something that's very, very well presented. I'd like to take the last question and then make some closing remarks.

Sir, the last question comes from Jared Albert, a Private Investor.

I want to actually follow-up on Bruce's comments about architecture. It's something I don't understand because if you look at all the SLs and all the SLKs you ever meet with Magic Sky Control, its maybe on the order of 120 thousand square feet of glass. But if you look at some of projects, it sure seems like an easy way to just get the price down which is the ultimate goal. And maybe a lot easier than automotive as it turns out since this is taking forever and hangs on one company. So we've seen kind of architecture...

Let me first just say that we're not just focusing on one industry, the nice thing about having licenses in all five major industries is that, they're focusing on these industries, they're doing the same kind of marketing that Sage and View are doing.

So you suggest that the phone rings and you pick it up in your glass or the big piece of glass. You have huge resources to beat the bushes for these projects. It seems like this is moving - they actually exist, these are smart glass installations that go over the world.

What I'd like to do just as an exercise, I'm not - I don't mean to give you homework but I think it will be instructive. Take a look at when these projects started and take a look at geographically where they are. And I think you make some assumptions that a lot of these are highly subsidized or what I'll call backyard projects, a lot of them are in Minnesota for SAGE, a lot of them are in California for View where these companies are headquartered, a lot of them are highly subsidized. But also look at the disclosure about the projects, they talked about a stadium, so much square footage. But if you look at what was really smart, it wasn't that much. The Kimmel Center in Philadelphia, they talked about this huge glass atrium but this is actually is a little spot that has SmartGlass on it. So I think if you really look at the data that they are disclosing, you really have to kind of dig deep to compare apples to apples. And that's one of the things that I've been advocating to the SmartGlass industry for the last five years, let's do some real side-by-side comparison, let's talk in all of our press releases about the size of the panels, the switching speed, the range of light transmission, and the total number of square footage in uniform terms so that people can actually compare. And not surprisingly, our competitors have not taken us up on that. So with that I'd like to make a closing remark if I could. And this really focuses on marketing because I think now we're at a stage where - we're definitely at a stage where from a technology standpoint everything is really robust and solidified and mature in…

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