Good afternoon, ladies and gentlemen. Welcome to Research Frontiers Investor Conference Call to discuss the First Quarter of 2018 Results and Recent Developments. During today's presentation, all parties will be in a listen-only mode and following the presentation the conference will be opened for questions [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 expects, 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. In some cases, the Company has responded directly to email questions prior to this call or will do so afterwards, in order to answer more questions of general interest to shareholders on this call. [Operator Instructions] Also we ask that you keep your 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, Jerry and good afternoon, everyone. And joining me today is Seth Van Voorhees, he is our Chief Financial Officer and also the President of our VariGuard division, which I am sure everyone enjoyed reading about this past quarter. For me the royalty reports that I focus the most on are from our automotive and our aircraft licensees. This is where the lion's share of our revenues have been coming from. This quarter both Asahi for the S-Class and Pilkington for the Roadsters showed nice increases in their royalties compared to our prior quarter. This is a very good sign. Our increased revenues in automotive means that overall take rates in the magic sky control using our technology are going up. Basically the take rate is the percentage of cars that have our technology as an option on it. How do we know that these take rates are going up? Simple math, because the take rate is the ratio of cars with our technology on it to the total number of cars produced. Since as with most car models the total number of vehicles produced goes down for the typical seven to eight years life of a new car model, and we’re several years into the car models and in all cars within Daimler using our technology. So as you would expect the number of cars being produced in total has gone down. So the higher automotive royalties over a smaller number of total cars means that the take rate is increasing. This year it may be hard to do an apples-to-apples comparison of fee income because of the new accounting standards 606 that came into effect. We're going to try to help here. The new 606 accounting standard gives guidance on how payments on long-term contracts such as…

[Operator Instructions] The first question comes from Ishfaque Faruk with WestPark Capital. Please go ahead.

Hi, good afternoon, Joe.

Hi.

My question relates to, you reported much higher revenues from the automotive aircraft and architectural sectors this quarter. Do you have any particular item that was a major contributor at this quarter?

I am happy to say that if I look at the royalties that we got from Asahi, from Pilkington and Daimler in automotive, they are all up compared to last quarter which was nice to see. And really those – like I said, those are the royalty reports that I look at very carefully because that’s a lion’s share of our revenue. But also our aircraft was up and I was pleased to see that as well.

Okay, in turn that the respective, I look at the raw numbers regardless of what the revenue guidance, in fact last year or this year says, what I look at is how much money are we getting paid in cash from the licensees in these markets and they’re all up.

Okay. And in terms of aircrafts are you being installed primarily in the newer ones, newer aircrafts or are in the after market segments?

Okay. So that's a great question, Ishfaque. The general aviation market, private jets and turboprops is a strong market for us. And we are standard equipment on things like the HondaJet and Textron’s King Air. And we're also in the aftermarket in about 35 now different models and there's been a whole bunch of other aircraft that are being starting to get the delivered their customers in the general aviation market that have us on it. We are making progress and this is why I like the question, we are making progress with the major aircraft manufacturers and also with the airline customers. And one thing to keep in mind is that we're the only electronically dimmable window technology in the world that can be retrofitted. So if you’re Delta airlines for example and you have a fleet of aircraft that are out there. At any given time, you have planes in the shop for what they call a D check, which is the heavy maintenance upgrade where that replace the seats and the carpeting and modernize the interior, things like that. And because we can be retrofitted, you don't have to change the structure of windows in the aircraft like you have to do on the technology that's in the Boeing Dreamliner. We could take advantage of those D check and other maintenance moments if you will to upgrade. And I must say in attribute to our licensees, they've been really good at making our technology plug-and-play so that you can actually upgrade the windows quite easily now.

Okay. So you don't have anything in the aftermarket currently or it is just from general aviation?

The aftermarket we have in general aviation in the airline market which is we technically an aftermarket upgrade for most airlines. We don't have anything yet but we're making good progress. I should say, our licensees and we're making good progress there.

All right. Thank you, Joe.

The next question comes from Geoffrey Harvey [ph], a private investor. Please go ahead.

Hi, Joe. A couple of things, what we're all waiting for, of course is some announcement which you sign another auto OEM. I just wonder where you think that stands and when we could expect something like that to come along?

That’s coming, I can’t tell you when, especially not in advance of them.

But it seems like that we – this has been delayed, we all I think expected something late last year and it seems we're now that we past the auto shows and everything.

Yes, I mean if you’ve noticed – if you've noticed the whole industry is in somewhat of a flux. I mean, they're all kind of adjusting to the world, if you will and there's ultimately a good for us but they’re adjusting to a world, where diesel engines are not only not going to be put on cars but existing – I think your dog is barking to my barking maybe.

Yes, I know, I heard the story.

That’s okay, my dog is being very quiet but that can change also right now. They’re adjusting to a world where diesel engines are not going to bail them out of this emissions requirement and some cities in Europe especially have now outlawed diesel engines from coming into the cities themselves. And that has upheld constitutional challenge over in Europe so the auto industry has been very much in a scramble mode right now, it delays something but like I said earlier, it creates a million good opportunities for Research Frontiers because of the four kilograms per kilometer that we save in CO2 emissions.

What caused the decline in the display market this quarter?

Just timing, just timing I mean, some of the projects will probably show up in the second quarter in a much bigger way than even last year in that market. So that's probably just a timing issue when products are shipped.

All right, thanks very much.

Thank you, Goeff.

The next question comes from Mark Brady [ph], a private investor. Please go ahead.

Hi, Joe. You haven’t mentioned much about Nippon Glass in the last few conference calls. But the initial presentation by Nippon was they were looking to become much more aggressive and they are working with quite a few auto manufacturers. Can you comment on the activities at Nippon Glass?

Well, Nippon Sheet Glass actually has two distinct businesses that are both involved with our technology, we have their subsidiary Pilkington, which is active and as I mentioned their sales grew this quarter from last quarter for the Mercedes roadster. And then we have Nippon Sheet Glass’s one more division which is doing the special glass that's used by Panasonic which I spoke about earlier. So I think they're coming up nicely and we'll see where that market takes us, as I mentioned I'm very optimistic that there's going to be growth in that market but a lot of that also is leading up to a very big market in 2021 the Tokyo Olympics comes around because that’s Panasonic's home turf and they want their name everywhere.

Joe, another question that I have is just the way you impacted SmartGlass into stoves as a new application, have you considered impacting or implanting SmartGlass into their front doors or even sheetrock doors as a specialty item?

When you say front doors of home, yes, of course and also…

Front doors of home and even just generally sheetrock for a very high plinth house.

Yes, we actually have that in our design center and it's quite effective with the architects, so these are all areas that are good used [indiscernible] technology. Some of the most fulfilling conversations I've had with these industrial designers because they figured out uses beyond just the major ones that we have talked about for our technology. It's a very versatile technology.

How about just general sheetrock for people who are on the real high end?

Sure, we've done that where you embedded right in the sheetrock walls and it looks quite good. So if you come to Woodbury I’ll show you how that looks like you'd be impressed.

Thank you.

Thanks a lot.

The next question comes from Tom Mccarthy with Raymond James Financial. Please go ahead.

Hi there, Joe. Could you give us the current status of sales for the Panasonic store windows and also what are the likely sales over the next 12 months?

We don't have projections because Panasonic does not give those projections even to Nippon Sheet Glass but I did speak about that a little earlier, we're very optimistic about that market and obviously it doesn't matter who are optimistic about it. The key is whether Panasonic and the Nippon Sheet Glass are and they have a nice spring in their step and a roll out plan.

Are there current shares.

Yes, of course.

And I am sorry, where are they.

No, we not disclosing that. I don't think Panasonic would like it if I reveal their business to the market. But they are included in our revenues. They are included in our revenues for the first quarter.

Okay, very good, thanks for sharing.

Thanks a lot John.

The next question comes from George Wellhanker [ph] a private investor. Please go ahead.

John, you’ve talked about film width several times. What are the implications of doubling, almost doubling the film width in terms of costs. Does it have any favorable implications or none at all.

Well there will be some economies at scale, if you basically coated film, lets say twice as light as you currently coat because you just have higher production capacity for a given a shift. But when you consider that most of the cost is coming from the materials such as the ITO-coated film or the emulsion. It is not going to have that much of an impact other than economies of scale in purchasing. Because, these are highly automated production lines, so you just press a button and it cranks out some – it is not that labor intensive. What I think the real significant storage for wider film and this is something that I am excited about may be sharing a little later on this year with everybody is that it opens up a very, very big market for us. If we look at the use of glass worldwide 27% of the world’s glass goes to automotive. 60% goes to architectural. And in the automotive market one meter wide film that's currently produced by us, it's actually it's pretty much wide enough for almost every automotive application you can think of. Some of those targeting bigger but I think as long as one dimension is one meter or less you're fine. Same thing with the aircraft market, having wider film is not going to be a big deal there in terms of opening up the market. But with architectural most sight lines on buildings are typically done in five foot increments. They have 60 inches between your [volumes] and let's say to your windows. But yes, 40 inch film, 39.5 film produced by Hitachi. So it creates some aesthetical challenges, what you need to – production challenges too. You need to either see in the film, so that within the glass two pieces of film are butting up against each other but that will create a micro stream if you will. And our licensees are pretty good at minimizing that, but if you could avoid it, it's much, much nicer aesthetically and also from a production standpoint lining up that film inside a piece of laminated glass takes some real skill. If the operator had a little bit too much coffee or something that day maybe his hand shakes a drop and it's not as close, it is not as it should be. So having 60 inch film would be a huge advantage there and as I mentioned, I'm excited to maybe talk about that a later on this year. But it opens up the architecture market for us.

A follow-up question does [indiscernible] equipment, which I understand is approximately two meters the coating heads, could that be used for an SPD film.

It could be used. Right now, I think they're coating 1.8 meter wide PLDC film and it is a very similar technology and even after coating they have lowering of PDLC film in terms of putting bus bars in cutting and things like that is very similar to SPD. So it's something that is if they want to they’d have a lot of experience with.

Okay, Thank you Joe.

Thanks George.

Your next question comes from Michael Kay with Kay Associates. Please go ahead.

Hello Joe. I hope the increase in fee income could be sustained indefinitely, I think that is very important. Joe what is fact

That is our plan. That is our plan.

Or what is the status of the SPD sunvisors as developed by Vision Systems, will that be on the market any time soon.

Well, I think actually a high-level of meeting about that market and probably in a couple of weeks, not probably, in a couple of weeks. So I can't give you an update until after that. It is something that we think there is an excellent market and you're referring to the aftermarket sunvisors that is that existing to glass. But, there's also just to complete the discussion [Audio Dip] that's also a very elegant solution. And if you look for example, the Continental Automotive video commercial that came out there, they have a multi-segmented sunvisor in front of the car that can adjust to things like what angle the sun is coming in at. So you don't have to dim the whole sunvisor, you could dim maybe the top third of it, or the middle third or the top two thirds depending on whiting conditions. So, it's quite a nice use of the technology in that format too.

And in discussions with potential licensees, did they give any feedback as to what improvements or innovations in SPD would make it even more attractive to them, than it is presently like in terms of either color or some other factors that you could share with us.

Wider film, cheaper film and different off shape colors are always top on the list.

And I assume that where your R&D people are working on.

You are assuming correctly, yes that is exactly right.

Okay, thank you. thank you very much.

Thanks a lot.

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

Thanks Jerry, we've been focusing with effort and precision on growing revenues and reducing expenses. We saw a good revenue growth last year and that growth continues with the results shown in this quarter. We’re seeing substantial cost reductions as well, we've had over $2.5 million in cost reductions in the past two years or so. And with five straight years of year-over-year reduction at our net loss, which continued in the first quarter of this year which was another reduction. We are approaching our goal of being cash flow positive and profitable. Let's compare our results for those of our competitors in the major markets now. In aircraft, we're still the longest flying and most reliable electronically dimmable window in aviation. We were also on the most variety of aircraft from fixed wing to helicopters. Revenue this quarter from aircraft were up from last year and from last quarter as well. We believe that we're also making progress with the major aircraft manufacturers and their airline customers as they get more experience with different performance characteristics of different electronically dimmable window technique to create a fast switching screen and uniform change of SPD. And we remain the only technology that airliners can use to retrofit their existing fleets of aircraft. In automotive we continue to dominate that industry with no competitors. Since our last conference call additional automotive OEM’s have stared new projects and new uses for SPD-SmartGlass. Revenues in automotive were also up from last year and from last quarter as well. And in architectural our two main competitors in that space are losing tens of millions dollar and $100 million per year with relatively little show for it. What they have lost in one year exceeds the amount that we have invested in developing as SPD-SmartGlass market…

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