Good afternoon, ladies and gentlemen. Welcome to Research Frontiers Investor Conference Call to discuss the Fourth Quarter and Full Year 2023 Results of operations and recent developments. During today's presentations, 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, that 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. In some cases, the company has responded directly to e-mail 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 questions brief in the interest of time. I would now like to turn the conference over to Joe Harary, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Hey, thank you, Paul, and hello everyone, and welcome to our fourth quarter and full year 2023 investor conference call. As you have seen from the numbers that we released about 30 minutes ago in our 10-K, revenues were up quite substantially, 109% in this past year, costs have been reduced and we're much closer to profitability. Today, we're going to discuss what's underneath these numbers and why we can all expect 2024 to be an even better year for Research Frontiers and its shareholders and licensees. Research Frontiers is the market leader in smart glass. We're also the most diversified company in the smart glass industry, with product applications in automotive, aircraft, architectural glass, marine glass, and augmented reality displays, and other areas, including consumer products. We're also the most diversified in terms of skills and capabilities of the companies we work with and geographically diverse, with licensees operating on almost every continent except Antarctica. This broad and diverse footprint allows us to coordinate, collaborate and service the needs of our customers locally and rapidly, wherever they are. Right now, the markets we primarily serve are automotive and aircraft, and this has been our bread and butter since 2011, when the first Mercedes came out in series production with our technology in it. We were the first to apply switchable tint technology to the aircraft industry in both general aviation and transport category aircraft. We are the only switchable tint technology in helicopters. And this past year, we were introduced on several aircraft produced by Airbus and more recently by Boeing. Perhaps of even greater significance here is the change in the way that the switchable tint technology being used in these aircraft was selected. It was selected by the customer and not just by the manufacturer. That is…

Thank you, Mr. Harary. [Operator Instructions] And our first question comes from Ted Campbell, a Private Investor. Your line is open.

Hey, Joe, how are you?

Ted, it’s great to hear from you. I hope you’ve been well.

I’ve been well. Thanks for asking. It’s always a pleasure talking with you. And I just wanted to congratulate you on a nice fourth quarter, a really nice fourth quarter, and an improved 2023. It’s great to see the increase in revenues for both of those, but especially this fourth quarter. Is that something you think we’re going to…

Yes. I mean thank you, Ted. I can’t take full credit though. It’s a team effort among us and our licensees, but we’ve all worked hard, and I’m really pleased with it as well. But thank you for that.

I know that. I appreciate everybody’s hard work. But is this increase in revenues, especially in the fourth quarter? You think that’s something we can build on in the 2024, or was this like a one-time event in the fourth quarter?

I think based on the trends that we’re seeing, I mean a lot of that was due to Ferrari coming on Board with their all glass roof, using our technology. And based on the film orders for 2024 by the licensee that’s supplying Ferrari, I expect that to actually grow quite a bit in the coming year. So yes, I don’t think it’s a one-time event.

So you think this…

It’s not a one-time event. Yeah, definitely. We’ll build on it. Plus, we have a car coming on Board from Asia that everybody’s quite excited about that’s more of a medium sized car. And then also a couple more cars that are being produced in Europe that will be new introductions for SPD. So, yes, I think that we’re going to do quite well in the coming year.

Yes. I’m excited about the upcoming models. But I also liked your comments on the retrofit market. I’m really looking forward to revenues coming from that.

I think it’s a game changer, and I appreciate you picking up on that. Right now, if you wanted to put a smart window in a building, you got to take out the glass. And if you’re on a building that has more than one or two floors, you have to put up scaffolding, which is very expensive and disruptive to the retail stores on the ground floor and things like that. So this retrofit solution allows you actually to install smart windows from the inside of the building. And you don’t have to put up scaffolding, you don’t have to get landlord approval. You don’t have to do a lot of things that can either add to the cost or increase the delays in getting a system in. And we’ve seen installations of this system where you come in over the weekend and do it, so you’re probably not even disrupting the workflow in an existing office.

All right. Well, I don’t want to hog anybody else’s time asking questions, but it’s always good talking to you. And thanks again and to everybody at Research Frontiers and Gauzy for all the hard work you put in.

Thank you, Ted. Appreciate it very much.

All right. Have a good one.

You, too.

Thank you. Our next question comes from Alan Ginsberg, Private Investor. Your line is open.

Yes. Hi, Joe, how are you?

Hey Alan, how are you?

I’m fine. Last call, you mentioned Hitachi in passing, but I’ve heard nothing since then. Is there anything going on there, which might lead us to believe that they might again be part of the manufacturing process here?

I think you haven’t seen the last of Hitachi’s technology. I think that part of this I have to defer until a time when that could be more fully announced. But it’s good for the industry.

So you think there’s a chance that they’re going to be reintroducing different products?

I think you’re going to see their technology come into the marketplace, perhaps from different paths than you would expect, but significant for us.

And today still – obviously they still have a license even though they still…

Right. They still have a license. They still have a license. Even though the company itself was sold to Showa Denko and then renamed itself. The license still is intact.

Okay. Thanks. That’s all I wanted to ask.

Thank you.

You’re welcome.

Our next question comes from Gerald Sherman of Strategic Planning Group. Your line is open.

Thank you. Hi, Joe, question for you on the cash flow situation and the current cash you guys have in the bank. I was kind of under the impression from the last couple of calls that we had, like a four-year running room. And now after reading this last financial that came out, it looks like you got a negative cash flow of about $1 million for next year. Are you…

What – yes, we actually have a five-year runway. We put that in the press release. The – what you’re seeing is kind of an accounting way of expressing it, which the way they test things is, do you have enough cash to last you at least 12 months from the filing date. But if you look at our MD&A section or in the press release that came out, it’s about a five-year runway. Now, some of that is cash on hand. We had $2.5 million at the end of the year and much lower burn rate as we approach breakeven, and then also anticipated revenues from the existing project. So I don’t know if we’re going to raise money or not. Mercedes or Ferrari or McLaren wants to make a strategic investment, I might say, yes, that’s always good. Gauzy has a strategic investment from Hyundai, and that’s been very helpful for their business. So you never know where those things can lead you. But I don’t anticipate doing an offering.

Okay. All right. Great. Thank you.

Thank you.

[Operator Instructions] And our next question comes from Leonard [indiscernible], a Private Investor. Your line is open.

Hey, good afternoon, Joe.

Hey Leon, great to hear from you.

It’s great to be here, buddy. When do you think we’re going to be over the hump to positive cash flow? Is that going to happen in 2024?

I don’t know if the trends continue, it’s a possibility. I don’t want to predict when we become cash flow positive or profitable, but – because that depends on things outside of our control. But a lot of those seeds that we’ve planted over the last several years, you’re beginning to see pop-up nicely. And we’re also seeing kind of a movement towards SPD in the automotive industry, which is more predictable for us. So I have a greater degree of confidence that we’re on the right path there.

They’re using it more windows then, right.

More windows, and a lot of people are beginning to realize in the automotive industry the benefits of putting this in a vehicle and the shortcomings of what other technologies that have promised the world and haven’t delivered it have. So I think you’ll see that there’s a lot more cars that are using SPD than anything else, and new ones coming in or switching over from other technologies to us. I think that’ll all be very good for us and for our licensees.

Okay. And you’ve had some retrofit with the government buildings recently?

We’ve had it over the last several years as part of test programs to make sure that the system is reliable and easy to work with and easy to implement. And we’ve improved the system even more since those initial tests started. But everything is moving in a very positive direction. And I think that’s a game changer for architectural.

And then with the tax credits, it would seem like everybody, how long do those last? Do you know how many years we can look forward to that?

It’s a fairly complicated calculation, but I think you can get a lot of it up front. So it makes implementation a lot easier. And you never know with the government when they’re going to either increase or decrease a program. They usually increase them, though.

Yes.

But I mean, it’s nice to be mentioned in the same sentences as other recognizable energy efficient technologies like solar energy and other things like that. It just adds a lot of credibility that SmartGlass in general and us specifically have made it, got the recognition.

Yes. With those projections, I saw the other day again that was from a marketing company. And so the reason they didn’t mention you very much. Is it was their clients that they were making the comments for, because that’s…

Right.

So I talked to the analyst and that’s what he told me, so that’s okay. There is – that’s why what…

I don’t mind if anyone increases awareness of SmartGlass. I’m so confident in our performance. And as you’ll find, probably the costs have come down fairly considerably, to the point where we can get into the mid level cars, which tells you something. And because of that, it makes us cost competitive on a real economic basis, not on a subsidized basis like some companies do. So on a real basis, we’re cost competitive and we don’t take on business. It’s not going to be profitable for our licensees, but it's nice to be able to have the awareness built out by these other companies and then take the business.

Yes. Okay. Well, thank you very much, Joe.

Thanks, Lynn.

Our next question comes from Art Brady, a Private Investor. Your line is open.

Hi, Joe. Art Brady here.

Hey, Art, how are you?

Good. I'm just kind of curious if you and Gauzy have had any conversation regarding building of homes using smart glass. In other words, a whole house built out of smart glass.

You mean, no concrete or wood, just smart glass?

Yes. Like, something like…

We haven't had that conversation.

What was that?

We have not had that conversation. But I'll say that the old adage about people living in glass houses shouldn't throw rocks with our glass. It would protect you from the rocks and the privacy. So it's possible.

I think there are some individuals would go wild over it, especially nature lovers. And the considerations are that this is part of the real future. Because if one of the car companies, from what I heard, was building a car out of smart glass, we could actually build a house out of smart glass. And I think you guys should really give it significant consideration, especially what's going on with interactive, possible building of facilities down in the future on the Moon and Mars.

Okay, well, I think we're going to go for the low hanging fruit first, but it's such a big market that I don't rule anything out. But thanks for the question, Art. I appreciate it.

Sure.

Our next question comes from John Nelson, a Private Investor. Your line is open.

Hi, Joe. How are you doing?

Good. Hey, John. How are you doing? And thank you for your question and also your kind words about Gauzy earlier.

Excellent. Thank you. A couple of questions on the Asian and European car projects that you discussed. Are they just for involving the sunroof, moonroof? Or are they also any either of them involved with shading the windows.

So one of the vehicles is just a sunroof. We're excited about that because the cost of the manufacturer is the lowest I've ever seen since 2010 when Mercedes started with that. So you're talking about a fairly substantial reduction in cost for that. So that's exciting in that respect. And then the other one actually uses side glass as well as roof glass. But thank you for the question, because that could vastly expand the way our glass is being used and also the volumes.

Great. Okay. And then regarding the retrofit solution, I should say, are your licensees in position now to be taking orders?

They will be in several months. Some of the data that we want to now generate with the latest and greatest SPD needs to be generated for the architects. The system itself is ready for primetime. Now, as part of the selling process, when you go to architects, they want to know all the data about energy savings and reflectivity and all the things that are important to them. So that's being generated.

Okay. And then regarding skylights, are the products being worked on simply the laminated product for new or is there retrofit product being tested for skylights also?

Both. Both. So sometimes when you're putting in a skylight, it's new glass. So you just put in smart glass there, and there's usually wiring very close to where the skylight is anyway, going through the ceiling or through those areas. With the retrofit, you can do that also. So if you wanted to retrofit an existing skylight with an SPD functionality, we've done that. And it's actually had very good energy characteristics doing that, because it also creates this air gap between the outer glass and the inner SPD pane. So you can actually enhance even further some of the energy efficiency, because you're not really so concerned about losing space like you would, like if you put it in your living room on vertical glass on a know skylight, adding that air gap actually could be beneficial. It's not so much of a detriment.

Okay, very good. That's all I have. Thank you.

Great. Thanks a lot, John.

[Operator Instructions] And our next question comes from August Berman, Private Investor. Your line is open, sir.

Hey, Joe, how are you?

Hey, Dr. Berman, how are you?

I'm well, thank you. Happy earnings day. Nice.

Thank you very much. I hope everyone is as happy as I am about the numbers.

Absolutely. Good to see that for sure. Just had a couple of questions. First, for the press release, it looks like there was a slight modification in some of the language for the Asian model. Has the Asian model indicated it might not be first half, 2024?

They haven't indicated one way or another. I just like to build in a cushion, given what happened, because we were expecting that in the second half of 2023, and for reasons unrelated to SPD and more in general, with their kind of production and QA issues that they had with the rest of the car, things got delayed. So being a little cautious, that's all.

Understand. And then I also noticed that it had mentioned, instead of at least one, just referring to one Asian model. Are we still looking at multiple Asian models or have things changed in conversation?

Things haven't changed. I just once again, want to be as conservative as possible. And the numbers will speak for themselves and the car introductions will speak for themselves. And one of the things I hope happens is that the car makers will be a little bit more forthcoming as to what technology they're using. And if you kind of remember, when Mercedes came out with the SLK, it was a little bit of a sales job, but we needed, we wanted and we impressed upon them the benefit of making the connection between the name Magic Sky Control and SPD-SmartGlass, and they allowed us to do that. When McLaren came out with their SPD roof, they just called it, electrochromatic, the generic term. And up until this year, now you're seeing they're starting to refer to it as SPD, which I think it indicates we're more of a badge of honor now. For a while there, they didn't want to reveal what the secret sauce is in their cars in terms of what technology they were using, but now it's become a badge of honor. It's like putting a BLAUPUNKT or Harman Kardon stereo system. It's a badge of honor to put SPD in there. So you're starting to see more car makers, I think, and I hope, continue to do that where they mention us by name, but if they don't, we'll find a way to make sure that our shareholders know what cars we're in. Like, Ferrari hasn't mentioned us as SPD in official pronouncements, but McLaren now did. So I think the gate is beginning to open there.

Yes. No, I was very excited to see that when they came out with that. And we pretty much seem to be in every car for McLaren that has a glass roof. So that's great to see and hopefully, Ferrari kind of falls at the same process as other models. I just had one other question. When I saw the news, I was very excited, and then I didn't see much follow up afterwards. And I kind of thought maybe it was just because of poor timing with the 737 issues. Are we under NDA for discussing that further the Boeing 737 that…

Yes. We're still waiting for permission to talk about the aircraft market. But I will say this, and you kind of raised an interesting thing that may be helpful to everyone on the call. People should pay attention to a couple of things. I mentioned in the past, pay attention to what you see in patent applications and patents, because it'll tell you companies that are working with our technology that we can't necessarily say are working with our technology, but also pay attention to what happens at trade shows. And trade shows are not only a forum for us to meet key decision makers and have meaningful conversations with them, but there's a lot of other benefits. And at CES this year, there was a number of things that were publicly announced, but there are also some things that we're still waiting on permission to be able to talk about publicly. And I'll tell you a little bit about something that we're still waiting on permission for. So I can't give a lot of details, but I'll give probably enough to make everyone understand where some of these things are going. One specialty vehicle, for example, at CES that's slated for production next year, and it's not a car, incorporated a novel approach to augmented reality in the windshield. And a key part of this was made possible by a combination of transparent OLED technology by LG and SPD technology that was produced by Gauzy. And the implementation of this was extremely well done. You could see the vibrancy added to the augmented reality display by using SPD in the windshield.

Joe, you still there?

Ladies and gentlemen, please stand by. We've lost. Mr. Harary, again, please stand by. We've lost, Mr. Harary.

Okay. I'm back. I apologize. So what I was saying is, at CES, there was a specialty vehicle, but it's not a car. And it was an augmented reality windshield that was made possible because of the combination of SPD film from Gauzy and the transparent OLED technology by lucky LG Group. And it was extremely well done. And you could see the vibrancy that happened with the augmented reality display by using the SPD film in the windshield. This product got a lot of attention in general. And at one point, when I was at the booth of this company, the Chairman of their South Korean parent corporation came to pay tribute to this vehicle. And he didn't know who I was. I was standing on the side, and I was watching him. He even politely and reverently bowed towards it while I was there. And it even made the show newsletter as the what's hot at CES product on day two of the show. And while SPD was not mentioned in the public articles about that, we're hoping to be able to talk about this in more detail when we and Gauzy have permission on that. But it gives you an idea of some of the things that are very pleasant surprises when you go to some of these shows. So we pay very much attention and we try to attend all the major trade shows for a variety of reasons, including that. And just so there’s no misunderstanding, even though this company is owned by a South Korean company, I’m not referring to the Asian car that we expected towards the end of last year with SPD. That’s totally different and very much on track and going through its final development stages prior to launch. And that promises to be just a very exciting project, because the cost to the manufacture of our technology has come down so much as to make it feasible for inclusion in a relatively moderately priced vehicle. And that, of course, bodes well for SPD-Smart technology being incorporated in much higher volumes across the middle market cars throughout the world. But pay attention to trade shows, and I think you’ll get some very good information as to what’s going on. Sorry for that long winded answer, Dr. Berman, but I…

I appreciate that. And honestly, I think shareholders have also noticed just a substantial increase in just commentary, mostly by Gauzy. Just looking at their social media page, seems to be every couple of days they mentioned something SPD. So I want to say this is the time, and I’m hoping it is. But it appears that things are more ready than ever before. And, yes, good luck to shareholders. And I think we’re on the right track.

And thanks for noticing the increased frequency of the communications by Gauzy. Like us, we try to say as much as we can when we have permission. And I think you probably have surmised that the frequency that we communicate with Gauzy is very often. I mean, it was much less when it was just Hitachi making film, but Gauzy has just been a wonderful partner, both in making film and in products and unlocking new industries and things like that. And they’re very visionary and very dedicated to this. And their future is betting on SPD. So we work very closely together. And they were in New York 10 days ago. They’re coming back to New York. I’ve met with them in Israel. I’ve met with them in France. I’ve met with them in Germany. There’s just a wealth of opportunity for our industry and they and we are very much at the center of that. But thanks for notice that they’ve become a lot more visible about this.

Yep. Well, appreciate it, Joe. Thank you.

Thank you. Thanks a lot.

Our next question comes from Mike Zelnick, Private Investor. Your line is open.

Thank you. Hi, Joe.

Hey, Mike. Good to hear from you.

And you, too. And just been reading your latest report that was posted about an hour ago, and I see revenues are up 109%. That’s what we like to see. That’s good.

I like triple digits.

Yes. Question I have has to do with Boeing and Airbus. I read the other day in the newspaper that both companies, and I think some other airlines as well, both companies have received orders from major airlines for hundreds of passenger jets, large passenger jets. What do you think the prospects are that on these orders using SPD on their windows?

I think they’re quite good. And it’s a great question. Let me kind of go a little deeper into why I think that. So if we take, for example, the automotive market when Mercedes and Research Frontiers was developing the SPD-SmartGlass product for the SLK, we had blinders on. We were just focusing on doing everything possible to make sure that Mercedes was happy. And it was a good strategy because we knew that if they were happy, and they have a very good reputation for quality assurance and production and innovation, that everyone else would follow. And then you started to see all the other industries fall into place nicely after that. So it was a good strategy to focus on making your launch customer happy. And once it was validated for automotive use, more and more companies like McLaren and General Motors and everyone jumped on board because they knew that it was something they could reliably and safely put in their cars and the same thing with aircraft. I think one of the significant things that happened this year is that we’ve been chosen for transport category aircraft, the big ones, the big aircraft. And the other thing that I think is significant is that we’ve gone from being pushed by manufacturers on their customers. That’s what they were doing at Boeing and Airbus before, to having the customer decide what technology they want in the aircraft. So you now have a technology that’s been validated, it’s in a number of different aircraft and it’s been reliably flying for decades and you have something that performs better than the current electrochromics that are there. Two second switching speed with no iris effect compared to a minute and a half for an electrochromic window to switch. So you have something that the customers can see as a much better performing aircraft window and greater dynamic range, just a whole host of things, right? So we’re excited about that, because when judged on the merits, I don’t think there’s any reason not to use SPD in an aircraft. And it doesn’t have some of the things that if you go on YouTube, you could see windows that are heating up and catching fire and cracking and doing things with other technologies because they’re more like a battery. And when a battery gets damaged, it gets hot. Think about your cell phone battery. So I think that there’s a lot of things that are pointing towards great success in the aircraft industry and especially the transport category aircraft. So Airbus and Boeing, I think, are significant developments, and they’re going to have legs.

Good to hear. Let’s hope those contacts with those two companies play out this year. Thank you, Joe.

We stay in good shape with everyone. Thank you, Mike.

Thank you. Our next question comes from Bruce Denny, Private Investor. Your line is open.

Hi, Joe. How are you?

Hey, Dr. Denny, how are you?

Very well, thanks. Hey, just one question. Congratulations on everything that’s going on. My question I think I’ve asked in past conference calls, but it always seems like a no brainer to me to couple the transparent solar cells with our window applications. Has anyone ever looked into this that you know of?

Yes. So let me give you a couple of examples where it’s been successfully implemented. Vision Systems had an aircraft window that generated 20 times as much power as the window needed to operate using transparent photovoltaics. And because of that, they actually put a charging port so you could charge your phone on the aircraft window with a USB port. With the retrofit application that’s something that we’re very much looking into is the combination of photovoltaics with SPD, because if you think about it, then you don’t need to have an electrician come to the job site when you’re doing the retrofit. Even in a commercial installation, you just pop it into the window and you’re good to go. And we actually had discussions about that two days ago also about that. So, yeah, this is very much in the plans.

Excellent. So glad to hear it. Thank you so much, Joe.

Thanks a lot.

Our next question comes from Jeff Harvey, a Private Investor. Your line is open.

Hi, Joe.

Hey, Jeff. How are you?

Good. On your last conference call, you did mention that the car wasn’t going to happen until the second half of the year. So has that changed any, or you still anticipate the Asian car in the second half of the year?

The second half of last year was the original expectation, and then we basically said, well, based on what we know, it’s probably going to be the first half of this year. And my expectation is we’re very much on track. But with everything else that kind of caused the delay in the car that wasn’t related to SPD. I don’t want to pin it down too much. But believe me, when the car company implements it, we’re all going to be thrilled.

So, one thing you haven’t talked about at all is the display market, which you talked about, I think, last time. Isn’t there anything going on in the display market, I know you’ve talked about before?

Yeah. No. So, one of the things that we talked about in the past is windows that incorporated display inside the glass using a combination of either electroluminescent displays and Gauzy Vision Systems has been doing that and things like aircraft windows and train windows and bus windows for years, and then more recently using transparent OLEDs with SPD film to make a very vibrant display. And that’s what I was talking about at CES, the specialty vehicle that had an augmented reality display. It was a display that combined transparent OLEDs and an SPD film. And it was just really amazing to look at. It wasn’t only me, but the press loved it, too.

But when can we expect to see some business from that?

Well, they’re talking about that vehicle coming out next year.

No, I’m talking about the display in a window, like in a department store.

Well, that could come out anytime. That’s just a matter of implementation and if you look at kind of the frequency that LG, who’s kind of leading the charge on that, has been exhibiting this. If you walked around CES, you’d see about four or five different booths from different companies that had transparent OLEDs that were being used to display things. And when you want that display to be vibrant, you would use SPD, especially if there's ambient light that can wash it out.

But do you know that any of that have actually been installed?

Oh, there have been installations, but a lot of that I wouldn't consider high volume. In the past, before LG went into this, they did museums and all sorts of things that were combining this. And because of the success of that, they did more. And now they're putting it into more mainstream stuff. But it's not something that we have prediction.

Okay, when do you think we actually get some architectural business? I mean, I'm very disappointed that that hasn't happened sooner, I mean as you know.

I don't know if you heard the earlier part of the call, but there's three prongs we're going after in architectural. One is the hard to shade areas like skylights, and then the second is government, and the third is traditional homes, offices, and apartments. And the game changer on that is the retrofit application. You could have sales this year in that in all of those areas.

Last year, especially with the retrofit, makes a lot of sense.

The retrofit is really ready now.

I live in a house that had, I'm in a climate where everybody has skylights, and I had to spend lots of money to put shades up in all my skylights. So be great if somebody like Budget Blinds could carry a SPD line that you could go and get and put up and cover your skylights.

Right. Although I don't know if Budget Blinds is the right entree into the market, because then you kind of have a race to the bottom in terms of innovation and profitability. But your point is well taken that SPD would be a great solution for it. And when you consider what your traditional motorized shades in a skylight would cost. And also, if you live in an area where there's snow, you can't put these shades on the outside of a skylight. It has to be on the inside or inside the glass. So SPD doesn't have those limitations. You can put it in any environment you want.

So, speaking of the airline industry, I did see today that I think United has stopped ordering new planes because they don't have enough pilots. Well, put it this way, they've stopped hiring new pilots because they can't get new planes. So, I'm not sure that the growth in the airline industry is going to be that great, because certainly Boeing has had an awful lot of problems with everything that they've been working at.

Well they certainly have. They certainly have.

I hope, I mean, I know Airbus I hope…

I don't think that's a sustained problem. I think that it's a terrible PR problem. I think it's a structural problem within Boeing that needs to be addressed. But I don't think that it's a permanent problem. So I think that – and believe me, there's a lot of – but remember, Jeff, one thing to remember also, you could retrofit an existing plane with SPD. We do it all the time. So you don't have to wait for new planes.

I'm surprised it hasn't happened because, like when I fly down to the church in Caicos, the first thing that the stewardess says is everybody shut their blinds. She could just…

Right, imagine flipping a switch. Yeah. Flip a switch.

Yes.

Yes.

So besides this Asian company, which is going to be a mid price car, are there any other manufacturers that potential have a mid price car that are going to put SPD on?

We're talking to them. Yes, but I think, because of the strategic relationship that this car company has with one of our licensees, you're probably going to see them have it first.

Okay, very good. Thank you, Joe.

Thanks, Jeff. Good talking to you.

We have a question from Leonard Litzo [ph], Private Investor. Your line is open.

I'm back. I'm thinking, is anything going on in the industrial market with SPD?

When you say the industrial market, what are you referring to?

Well, I'm referring to things like people are doing things with bobcats, different things around.

Oh, yeah. It's funny you mentioned that. If you were at CES, you probably would have seen a very nice bobcat. That's all I'm going to say about it.

Okay.

[Operator Instructions] We have a question from Alan Ginsberg, Private Investor. Your line is open.

Yes. Hi, Joe. It's a follow up question. You haven't mentioned anything about sun visors. Has there been any progress there?

Yes, there has. Still in development, and a lot of that is driven by when the launch customer wants to come out with something.

So it's just like one launch customer has to be the first one. Is that it?

Yeah. I mean, there's always the possibility this would become aftermarket, and if somebody doesn't do it, I would probably just do it. But I have to also respect the businesses and my licensees.

Okay. Thank you.

Thanks a lot.

You're welcome.

Our next question comes from Tom S [ph], Private Investor. Your line is open.

Yeah. Hi, Joe. How you doing?

Hey, Tom.

Yes, I was going to ask about the car you mentioned coming out from Asian car there, and it sounds consistent in your words, and you've been steady with it, so I do have faith it's coming this year. Without revealing. I know you can't reveal a lot, but could you give an idea on volume? Not exactly an SPD, but even the car or anything at all, is it going to be a trim package or how many we're going to get in of that volume would have SPD?

They have – I know what the initial, we're going to call it a test market, but the test market for a car with this volume worldwide, the volume is pretty high. The test volume is greater than when Mercedes had all of their cars using this. So even a test market for something with this kind of volume was a significant number. I also expect, though, that the royalty per car is going to be lower than Mercedes, because the price of the roof to this car company is lower than what Mercedes was paying back in 2010, 2011. But it could be significant. So we're excited.

Yeah, and that's good to hear. One follow up on that. When you say the test market and the amount and all that. So you're basing this test market on cars that will have SPD, not just is that like kind of essentially a forecast of how many? Because not every car, unless it's a standard.

The forecast we were given – right, the forecast we were given for what they consider a test market, which I consider substantial volume, is pretty significant.

And that's the test market that's forecasted for SPD, not just the volume of cars, it's the forecast of SPD.

Right. These are the number of SPD roofs that are going to be produced.

Okay. And I'm sure you probably can't say anything about if it might be or more leaning towards an option or trim package or. You can't say anything on that.

I don't think they know. But if I was going to guess based on what I know about the way car companies implement this, they like to put things as an option, because that's where they make their money. But sometimes an option can be a very high percentage take rate. If you look at McLaren versus Mercedes, the McLaren take rate for SPD is enormous.

Yes, no, I'm sorry to interrupt. I'm aware of that. I'm just thinking trim package is technically an option. There's like a standalone option or a trim package as an option. Trim package would be ideal.

I don't know if they're going to do a trim package. Yes, I don't know if they're going to do it as part of a trim package or if they're going to do it as a standalone option, or, God willing, one day it'll be standard equipment, because then you could totally downsize the size of your air conditionings to be a fraction of what they are.

And it could be because the ix is pretty much, I think 95% or more of the PDLC is in 95% of the IX [ph]. So that could happen, but hopefully we at least get out of a trim package. I noticed they started doing that in some cars, too. Well, thanks for your answers.

Sure. Appreciate it. Thanks for the question, Tom.

We have a question from Michael J [ph]. Private Investor. Your line is open.

Hello, Joe. I'd like to ask to what extent is cost still a barrier to having more organizations adopt SPD, especially the architectural one, someone who, you know, posted in quite detail comparing the costs of SPD with non-SPD windows. And it seemed that there still was a great disparity and that cost.

I didn't see the post, so I can't speak to what the post said. But if you look at, and if you go back to my earlier comments about why we're excited about this Asian car maker, the price of the film, the price of the cost reduction from streamlining due to the retrofit use can be significant. And if you look at some of the costs that you're comparing it to, like, let's say the skylight, we're cheaper than a skylight shade. So it depends on how you analyze the market. The market is going to decide, if someone wants it, they're going to buy it. But I don't believe in side by side costs unless you have a context.

To what extent is Mercedes still using SPD in their vehicles. It seems we don't have too much information regarding its adoption and other models. So what is the status of Mercedes and SPD?

We have a very good relationship with the people at Mercedes, and their name pops up on royalty reports from time to time. That's all I'm going to say.

Okay. Thank you.

Thanks a lot, Michael.

And our next question comes from Seth Nickerson, a Private Investor. Your line is open. Mr. Nickerson, your line is open.

Yes, hi.

Hey, Seth. How are you?

I'm doing well, Joe. Thanks for asking. I noticed on a chat board that Gauzy had posted about an MOU with LG back in January. I was wondering when….

Yes, they’ve had, when we were talking about transparent OLED displays, that's LG, providing, they have a unique technology, which is a transparent form of OLED. And just to kind of go, what's underneath that? So there's OLED displays out there, and typically they're what's in your television on the wall. A transparent OLED allows you to actually put that on a clear substrate, like a piece of glass, like a window. So the idea is you can turn a window into a television, but if you think about the optics of that, if you have that window face with daylight coming in from behind it, it's going to wash out the image. So if you now combine that transparent OLED with an SPD film, you have the ability to turn on the OLED, to turn the window, if you will, into a television and block the ambient light by using an SPD film. So all of a sudden, you go from having a washed out television image to a vibrant, clear one. And then let's say you want to turn that window, that television, back into a clear window. You would clear up the SPD film and turn off the OLED, and you have a clear window. So that's the idea. It's quite remarkable when you see it in practice. And as I mentioned, when we were at CES, there was flat panel displays that had the combination transparent OLED and SPD film at Gauzy’s booth and elsewhere. But also they had an augmented reality windshield, where imagine a piece of construction equipment, for example, and superimposed on the windshield was where all the gas and electrical lines were on the site that you're digging. So you could see, as you're digging, where the areas you need to avoid are. Well, if you're on a construction site and there's daylight, it may be hard to read what's on your windshield. So now, with the combination of SPD and transparent OLEDs, you could see quite clearly where the lines were, where the gas lines were, what to avoid. It was actually kind of cool too, because they have external cameras on these construction equipments, and you can actually, with a gesture of your hand, move the display over to the side. So let's say you're digging, and you want to see where you're digging. You'd look at the camera, because sometimes there's blind spots, and the camera would help you. But let's say it's getting in the way of you doing your job. You just kind of just touch the screen and swipe it to the side. And it's very much like minority report, where you can just play with these things in real time. So it was quite remarkable. And LG and Gauzy have been working together on this combination for quite a while. And I had encouraged them to do that because we saw that there was some real traction in that market.

I was watching the LG CES thing, and at 32 minutes, they brought out their T OLED, and they had that silly [ph] black screen come up from the bottom. And I remember what Gauzy had. It seemed like the answer.

Right exactly.

I'm just surprised with the stock languishing like, below a dollar at times, that you wouldn't make a press release about that?

Yes. Seth if we could make a press release about things, we certainly would. A lot of times, we're specifically asked not to or not now, and you have to respect the customer.

True. Okay. Thank you.

But Gauzy and I would love nothing more than to be able to talk about that.

All right, that's all I've got. Thank you, Joe.

Thanks a lot.

And see no further questions. I'll turn the call back over to our host.

Thanks, Paul. And remember, if we've not fully answered any questions that were emailed or asked today, just email us and we'll do our best. A couple closing remarks this past year has been transformative for Research Frontiers marked by financial growth, strategic expansions and innovative breakthroughs and new uses for SPD SmartGlass technology. And as we look forward, we are committed to continuing this momentum, improving the way people live, work and get around, and enhancing our global impact. In the past year, Research Frontier has achieved significant accomplishments, including 109% increase in revenues and a reduction in cost, moving us much closer to profitability. The company solidified its market leadership in the smart glass industry, expanded its collective global footprint, and diversified its product applications across automotive, aircraft and architectural sections, as well as augmented reality and other advanced uses of SPD SmartGlass technology. Other notable achievements include the introduction of SPD technology in Boeing and Airbus aircraft and the development of the SPD SmartGlass retrofit solution and triple digit percentage growth in automotive royalties. A few weeks ago, the market research from firm SNS Insider reported that in the smart glass market, quote, the transportation application segment holds a considerable market share of around 48% in 2022, driven by automakers inclination towards adopting SPD glass, especially in luxury cars. Well, first let me say nice to have our technology accurately and specifically mentioned by name as the leader in the automotive smart glass market. And as we noted, their conclusion about the dominance in the transportation section held true not only in 2022, but based upon the numbers we just reported for 2023 as well. And in 2024 and beyond, there may be new markets for SPD that dwarf and build upon our current ones. We and…

That concludes today's conference call. Thank you for attending and have a pleasant day.