Good afternoon, ladies and gentlemen. Welcome to Research Frontiers’ Investor Conference Call to discuss the First Quarter of 2019 results 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, 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. I would now like to call over to Joe Harary, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Thank you, Erica. And good afternoon everyone, and thanks for being here. Joining me today is Seth Van Voorhees, our CFO and our special guest Rachel who is an intern here that is doing some special research on the electric vehicle market for us. In past conference calls, I outlined our initiatives for Research Frontiers. These involve reducing the cost of our SPD-SmartGlass technology to the customer, opening up new markets and new customers and operational efficiencies. As we will talk about today, we have achieved results in all of these areas. Fee income was up 13% this quarter compared to last quarter. Although there was a slight decrease between the first quarter of this year and the first quarter of last year when non-recurring items are accounted for from the first quarter of 2018, fee income would have increased by $26,384 in the first quarter of this year as compared to the first quarter of last year. We had higher levels of fee income in the automotive, aircraft and display market sectors, and slightly lower fee income from the architectural market this quarter. As I noted on our last conference call two months ago, 2018 represented the fourth consecutive year that expenses at Research Frontiers have decreased and the fifth consecutive year of lower operating losses for your company compared to the prior year. The improvements in these two areas continued in the first quarter of 2019. Expenses declined by over 20% or by $247,312 for the first quarter of 2019, as compared to the same period in 2018 due to our cost reduction initiatives. The company's net loss was about the same for the first quarter of this year compared to the same period last year or $0.03 per common share. The company's net loss would have been…

[Operator Instructions] Our first question comes from Austin Hopper. Please state your question.

Hey, guys. Thanks for taking my questions. You touch one s-class a little bit. Can you just help me understand if I'm a buyer of an s-class Mercedes what is this option, what is it generally going to cost me?

Sure. So they call it the Magic Sky Control option and depending on which car you buy it from it's going to have either one or two roofs. If it has one roof, you're paying $2,500 for that roof and that's the SLC the SL which are the two roadsters, the convertibles. And also the s-class coupe which has a 1.3 square meter front to back panoramic roof that's made out of SPD-SmartGlass. If you buy the Maybach or the s-class and that's either the S550 or the S450 does have both have two roofs and that option is $4,950.

Okay, great. And then can you give us a sense for the production of those automobiles and kind of what percentage of them that you're in currently?

Mercedes will not allow me to disclose take rates. You can kind of back into it based on some of the comments I made earlier that take rate seem to be rising because as you get further and further away from the introduction date of any car model, the number of cars they produce gets reduced. And if our royalties are going up and the numbers of cars are being reduced, you could just infer the percentage is going up. And we're seeing on our weekly report that we get from Daimler and the monthly and quarterly reports we get from the companies that are supplying them with glass. That's a very positive trend.

Our next question comes from Michael Kay. Please state your question.

Hello, Joe. Recently Mayor de Blasio of New York City made the headlines because it was somewhat erroneously reported that he was going to ban glass skyscrapers, however, he the clarified it by saying that if a company wants to build a big skyscraper they can use a lot of glass if they do all the other things you needed to reduce the emissions. And I think then that SPD would be a natural for this and I think it would be good if the company got in touch with Mark Chambers, he's the Director of the Mayor's Office of Sustainability. And I think he's not aware of SPD at this time. I think he'd be very interested in knowing that it could reduce emissions.

So his comments about banning glass skyscrapers, first of all it was I believe meant to be a little bit of hyperbole to get some national attention, but a couple years ago, reminds me a couple of years ago of a presentation I gave to a major European architect. And I said I started it with a picture of a bomb shelter. And I said if you want to build the most energy-efficient building you could remove all of the windows, cut out any connection with the outside world and you'll have a very energy-efficient building. But no one's going to want to live in it. And that's kind of my view of what the initial proposal was. And it's a fairly lengthy proposal that sounds very good in theory, and it's going to be very difficult in practice for anybody to build anything he wants to. Q - Michael Kaye But it was clarified later on that he didn't mean that.

Of course, politicians say one thing and then they correct themselves later on. You're 100% correct that SPD-SmartGlass is a highly energy efficient product that would actually allow architects to increase the ratio of glass in a building. Our solar heat gain coefficient is 0.06 in some configurations. That's the best on the planet. So it's something that we certainly view as a positive trend that maybe legislation will help legislate either more and more smart glass. It's certainly helping us in the other markets like the automotive market where regulations about co2 emissions have greatly benefited us.

Our next question comes from Chuck Michaels. Please state your question.

Yes. Hi, Joe. I had a question if you can give us an update on what is happening in the commercial airline passengers market?

So our aircraft revenues are up. We're still approaching both the OEMs and there are four major OEMs in the transport category. Boeing, Airbus, Embraer, and Bombardier and but also the approach has been to the airline's themselves because what I'm seeing out there is that the switching speed of what's on the Dreamliner is not very good. Even in its second and third generation iterations and because of that the airlines want something better for the environment.

Our next question comes from Thomas McCarthy. Please state your question.

Hi, Joe. In regard to the 19 vehicles that you mentioned that are seriously considering using SPD. What was the wording you used to describe them? Are they planning to use SPD? Are they seriously evaluating it? How would you describe that?

They're all working with us in our licensees on SPD.

Okay. How many car companies does that include?

I don't break it down by different car companies, but I think in our last conference call we had mentioned that we're working with 12 of them. And I believe also that Gauzy had used a similar number.

12 car companies?

Right. But I have prepared on that list of 19 so it may be more.

Okay. Besides use in the roof are there other considerations being evaluated, particularly sun visors?

Yes. Including yesterday's conference in Michigan that was very important for the sun visor market.

Right. And when we say sun visor we're talking about the first few inches of the front class.

We're talking about both that and an aftermarket.

Our next question comes from Art Grady. Please state your question.

Hi, Joe. Anything happening in the museum market?

Yes. Matter of fact our new licensee VeraGuard has something going on in the Baseball Hall of Fame. So there's a lot of very high visibility stuff that's going on in that market. And we're still very excited about it.

Another question that I have is regarding Gauzy. They recently signed up a distributor in Brazil. Do they have to take out a license from you also or is it just all filter through Gauzy?

No. They have to take out a license from us or we have to get special permission for them to have in effect a license underneath the Gauzy umbrella.

Will that take place or you will sign them up?

I certainly hope that they will be offering SPD because I believe that's their intention. And we're talking about substantial volume.

Okay, good luck.

More on that later.

Our next question comes from James Wyle. Please say your question. James, please go ahead.

Hi, Joe. It's Jamie Weil from RBC. Just look back at the revenues over the last couple of years, $1.24 million in 2016; $1.51 million in 2017; $1.49 million in 2018 and just trying to get an idea of when we may actually see some increase in revenues.

That's a great question, Jamie. So when you consider the fact that we have more and more cars coming online, which is the largest share of our revenue. And my statements in prior calls about 2020 being a much higher year revenue wise, I think that you'll start to see some meaningful up uptake and I'm going to talk a little bit more about that in my closing remarks.

How many quarters before you actually see some increase in revenues?

We're not going to give such precise guidance because some of the cars are introduced mid-year, some are introduced at the end of next year. And obviously that's going to affect when our revenues get recorded.

One of the things that I was curious about is that Gauzy has a pretty big plan up and running now. They're building a second one but if the revenues aren't increasing it doesn't appear that they're getting any revenues off even the first plan.

Remember, they just did their ribbon cutting on that in October. And the bulk of what we expect is coming from automotive. And if you look where that factory is located, it's located in Stuttgart. So that should give you some ideas as to where they think the revenue is coming from too. And that has lead times so you're not going to see that revenue until those projects start to hit, but they're out there and we're very excited about it.

At this time, we have no further questions.

Great. Well, if we haven't fully answered any questions that were emailed to us or if you felt that we haven't fully answered any of the questions or didn't have a chance to ask them in the live Q&A today, just email us and we'll get back to you. I'd now like to make some closing remarks and my closing remarks will be brief. I'll let the results that we outlined earlier that we're beginning to see -- speak for themselves. Moving forward we have a number of growth areas for our business. In automotive, the focus has been on premium vehicles and reducing CO2 emissions where we could save 4 grams per kilometer of pollution, and with the new standards coming in Europe in the next few years this amounts to a savings of €380 per car in avoided penalties. And there's also a pronounced movement towards electric vehicles and our SPD-SmartGlass technology can increase the driving range of electric vehicles by 5.5%. And today we spoke in detail about the work that is being done by Gauzy, about their new factory in Stuttgart, and the continued expansion of our business especially in the automotive industry. 2019 and 2020 are expected to be the beginning of highly significant years for us in the automotive industry. Trains are doing well and could be our second-biggest market over the next few years. And our aircraft business grew again this quarter thanks to the effort of our licensees in this area, and Mike Lapointe, our Vice-President of Aerospace products. And with the introduction of a wider and less expensive film and new competition among the SPD filmmakers, Hitachi and Gauzy all markets will benefit and it also opens up for the first time the very large potential architectural smart glass market. For…

This concludes today's conference call. Thank you for attending.