Earnings call transcript: Research Frontiers reports Q1 2025 revenue surge

Research Frontiers Inc. reported substantial revenue growth in Q1 2025, driven by a surge in automotive royalties and a significant reduction in net loss. The company’s stock rose by 5.04% in aftermarket trading, reflecting positive investor sentiment. According to InvestingPro data, the company has achieved impressive revenue growth of 46.83% over the last twelve months, though it continues to face challenges with negative gross margins of -65.28%.

Key Takeaways

• Q1 2025 royalty revenues increased by 79% to $560,000.
• Automotive royalties soared by 128% compared to Q1 2024.
• Net loss decreased by 60% year-over-year.
• Stock price increased by 5.04% in aftermarket trading.

Company Performance

Research Frontiers demonstrated strong performance in Q1 2025, with notable growth in its automotive segment. The company continues to leverage its SPD SmartGlass technology across multiple industries, including aerospace and architectural markets. This performance aligns with broader industry trends favoring smart glass innovations.

Financial Highlights

• Revenue: $560,000, up 79% from the previous year.
• Net loss: $177,687, a 60% reduction from Q1 2024.
• Cash and cash equivalents: $1.4 million.
• Working capital: $2.3 million.

Market Reaction

Following the earnings announcement, Research Frontiers’ stock rose by 5.04% in aftermarket trading to $1.25. This increase reflects investor optimism about the company’s growth trajectory and its potential to achieve profitability by the end of 2025. The stock’s movement is notable given its 52-week range of $0.93 to $2.415. InvestingPro analysis shows the stock has gained 12.26% in the past week and tends to move independently of the market with a beta of -0.1. However, InvestingPro’s Fair Value analysis suggests the stock may be currently overvalued. Discover more insights and 10+ additional ProTips with an InvestingPro subscription.

Outlook & Guidance

Research Frontiers anticipates revenue growth across all market segments and aims for profitability by the end of 2025. The company is focusing on the development of its black particle technology and expanding its architectural market presence with retrofit applications.

Executive Commentary

Joe Harari, CEO of Research Frontiers, emphasized the company’s commitment to innovation and market expansion. "We’re not just advancing the state of smart glass. We’re shaping the future of how people experience what they see and feel through that ubiquitous material glass," he stated.

Risks and Challenges

• Market Saturation: Increasing competition in the smart glass industry could impact market share.
• Supply Chain Issues: Potential disruptions could affect production and delivery timelines.
• Macroeconomic Pressures: Economic downturns could reduce demand for high-tech glass solutions.
• Regulatory Changes: Shifts in trade policies or tariffs could influence cost structures.

Q&A

During the earnings call, analysts inquired about the company’s black particle technology and its potential applications. Discussions also covered tariff impacts and the exploration of new markets, such as heavy equipment and construction vehicles.

Full transcript - Research Frontiers Incorporated (REFR) Q1 2025:

Erica, Conference Call Operator, Research Frontiers: Afternoon, and welcome to the Research Frontiers’ Investor Conference Call to discuss the First Quarter of twenty twenty five Results of Operations and Recent Developments. The company will be answering many of the questions that were e mailed prior to the conference call, either in their presentation or as part of the Q and A session at the end. In some cases, the company has responded directly to e mail questions prior to the call or will do so afterwards in order to answer more questions of general interest to shareholders on this call. Some statements today may contain forward looking information identified by words such as expect, anticipate, and forecast. These reflect current beliefs, and actual results may differ materially from those expressed due to various risk factors, including detailed in our SEC filings.

Research Frontiers assumes no obligation to update or revise these statements. Today’s call is in listen only mode with a q and a session to follow. To ask a question, press 1. The call is being recorded and will be made available for replay on Research Frontiers’ website at smartglass.com for the next ninety days. If you find that your question has been substantially answered as a courtesy and to allow time for other shareholders to ask their question, please remove yourself from the queue by pressing pound 1.

Also, we ask that you keep your question brief in the interest of time. I will now turn the conference over to Joe Harari, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Joe Harari, President and Chief Executive Officer, Research Frontiers: Thank you, Erica, and hello, everyone, and welcome to our first quarter of twenty twenty five investor conference call. Let’s start with our financial results. I’m pleased to report that the first quarter of twenty twenty five marked another strong period of revenue growth and momentum for Research Frontiers, driven by increased demand for SPD SmartGlass, particularly in the automotive sector and also in the aircraft sector, with growing interest in new projects in the architectural market. Our royalty revenues in Q1 twenty twenty five were up over 79% to $560,000 This was an increase of more than $246,000 over the first quarter of twenty twenty four. Also significantly, royalty income was up 214% or up 382,000 sequentially from the previous quarter Q4 twenty twenty four.

This increase was primarily the result of higher royalties from the automotive market, up 128% compared to Q1 twenty twenty four and up 267% compared to our previous quarter Q4 twenty twenty four. Revenues from the aircraft market were also up sequentially in Q1 twenty twenty five compared to the prior quarter, Q4 twenty twenty four. And we expect revenue in all market segments to increase further as new car models and other products using the company’s SPD SmartGlass technology are introduced into the market. As a consequence of these factors, our net loss was $177,687 or $01 per common share for the three months ended 03/31/2025. And this was $265,000 or 60% lower than the first quarter of last year.

Turning to our financial condition and liquidity, we continue to manage our resources effectively. As of 03/31/2025, our cash and cash equivalents stood at approximately $1,400,000 and our working capital was approximately $2,300,000 We continue to be debt free. Based upon our current operations, we believe our current cash and cash equivalents would fund our operations for more than the next five years. We do not need to raise capital at this time and do not anticipate doing so unless there’s a strategic reason to do so. We continue to see progress and significant developments across our markets.

Our SPD Smart technology is currently licensed or used by many major companies serving five major application areas, aerospace, architectural, automotive, marine, and display products in almost every country of the world. I’ve been asked about other technologies being used. You know, when I first joined Research Frontiers, the head of l b and l laboratories in charge of the smart window project told me to keep an eye on two companies who are the most advanced in the world, Asahi and EsoClima. At the time, both were focusing on electrochromics, a competitive technology to SPD. It’s telling that both are now active licensees of ours for SPD SmartGlass.

You know, along the way, many other companies became, frankly, roadkill on the side of the SmartGlass road. Some crossed over to us, like Asahi and Isuklima. Some asked us to bail them out. I won’t name names. And some stubbornly stuck to losing technologies with the hope of breakthroughs and miracles that have eluded them for decades.

Two companies in our industry filed for bankruptcy this past year, Vue and Healio, while another has gone relatively quiet in the market and is yet to come out with even a rudimentary smart product. Throughout these industry challenges, Research Frontiers never wavered from our mission. Our success stems from having the best performing smart glass technology paired with a low risk business model that preserves our upside while encouraging diversification and a robust global footprint. A recent example of the benefits of our approach was highlighted in Gauzy’s recent press release about the lack of any meaningful impact of tariffs on their business. And this is something I had also indicated with our business on the last conference call in March, and we’ve received a number of questions about this that were e mailed to us.

This also further demonstrates the logistical advantage of our film technology. It also certainly reinforces the strength of our business model and of the strategic partnerships we’ve built. We’ve spoken in the past about key developments in the automotive market. Royalty increases in this sector were a major driver of our Q1 growth. We continue to see significant momentum in automotive with new car models expected to be introduced in 2025 using our SPD SmartGlass technology.

Q4 saw the introduction of the SPD SmartGlass for the Cadillac Celestiq, and Q1 twenty twenty five showed somewhat higher sales to Cadillac. The production callouts by Cadillac point to significantly higher royalties from GM in our current second quarter of twenty twenty five as production ramps. Similarly, we had strong sales from Ferrari in Q1 twenty twenty five and expect strong sales from Ferrari for the current quarter q two twenty twenty five based upon their production callouts to our licensee. Also, think everyone was pleased to see from our press release in April and also Gauzy that Mercedes is back in the picture with their luxury van that debuted at the Shanghai Motor Show. What’s unique here is, one, that is in in an area other than the sunroof, and two, it is unique in that it uses in the side windows a combination of SPD, PDLC on 75% of the van’s glass.

Now let me take a question that was emailed to me from mister Erdmann. What is the advantage of a dual stack smart glass combining SPD and PDLC over SPD only. Well, SPD by itself works fine for shading and privacy. But when you want privacy with light coming in, and remember, we’re dark in privacy, you might wanna use a combination of the two. And, also, in areas where you’re projecting an image, it’s somewhat more like a movie scene in a theater with PDLC.

So it’s a visual effect sometimes with displays that you want. That becomes less relevant, by the way, in a world where most of the displays are embedded inside the glass and things like transparent OLEDs, which is a, you know, very interesting market for us. On prior calls, I mentioned new car models in Asia, Europe, and in The U. S. These are still on track.

And while I can’t discuss the details yet, we have also landed another European car model to the mix since our last conference call together in March. Revenues from this are not reflected in our first quarter royalties. Yesterday, I received several email questions about the electrochromatic roof on the new 2026 Corvette, and I can’t provide any details about that at this time. It’s up to GM to decide to what extent they wanna talk about this. In the architectural market, we are excited about the potential for growth.

We have begun work on private projects utilizing FPD SmartGlass. We are looking forward to the launch of the retrofit application, and our licensee in this area has projected a strong second half of this year. We also believe what we believe is a game changer for the industry is the retrofit application by significantly simplifying installation, reducing costs, and minimizing disruption while upgrading building envelopes to make them smarter and more energy efficient. And supplying government buildings is a very large opportunity and regulatory support such as the Dynamic Glass Act, which offers substantial tax credits of between 3050% should help the private sector adopt SPD Smart Glass in buildings and homes as well. Jeff h emailed me, what is Research Frontiers doing to tell a story?

Because it sounds like you have one to tell. Well, we certainly do. One thing is we’ve been working very closely and that’s increasing with Galaxy to get the word out. They have substantial sales and marketing resources and we coordinate with them. They’re also quite good at social media and other digital marketing, and we coordinate with them as well on this as well as business development.

And we recently had some high level discussions about even doing even more together. We also know we needed to update our website, and we did more than that. It’s been totally redesigned, and we’ll be working on the pre on the final prelaunch steps this weekend and expect to go live by early next week. And I think you all are going to love it and find it a great tool for sharing information with others. Several and by the way, our web address is smartglass.com, if anyone wants to check it out or peek in maybe over the weekend.

Several shareholders have asked about what catalysts we see for our company, our revenue, and our stock price. Jared asked, do you see a catalyst or a combination of price, performance and availability that finally meets the value proposition or does success remain out of reach? Well, I think that the steady improvement, Jared, that we made in the growing revenues and approaching breakeven, while others in our industry have failed, certainly means that we are on the right track and nothing is out of reach. And I’ll talk more about this in my closing remarks later. But certainly, the catalysts are happening in terms of price performance and availability of the product.

As I mentioned, we’ve included some of the questions previously sent in by our shareholders in the presentation today. And with that, I look forward to answering the questions that I’ve not already answered in the course of my presentation. And we ask that you keep your questions limited to questions of general interest. We could always talk about specifics after the call. And if you want to get into more specifics, you can do so by e mail or calls offline.

I’ll now ask that our operator, Erica, to open up the conference to any additional questions people participating today might have that we haven’t already covered.

Erica, Conference Call Operator, Research Frontiers: If you would like to ask a question, please press 1 on your telephone keypad now. You’ll be placed into the queue in order receipt. Please be prepared to ask your question when prompted. Once again, if you have a question, please press star one on your phone now. Our first question comes from Francis Coturba.

Please state your question.

Joe Harari, President and Chief Executive Officer, Research Frontiers: Yeah. Hello, Joe. How’s it going? Hey. How’s it going?

Pretty good. Yeah. You didn’t mention anything about the dark particle. And why do define it? Why do you define it as the holy grail?

And number two, will whenever it is available and it’s used in various different products, will it be a combination of just the black part dark particle and PODC, or will it just be the dark particle? And Okay. Does it when might that’s a great question. When when might it be available? Okay.

These are all great questions, and I’ll answer what I can. Also, we got similar questions from John Nelson and and Mike White. So thanks for asking about the black particle. So we announced together with Gauzy the black particle in January at the Consumer Electronics Show in Las Vegas, and we demonstrated that, a film using it, behind closed doors to key people in the industry, and it was very, very well received. And since then, we and Gauzy have done a significant amount of work together on advancing it towards commercialization.

And I hope to be able to share some very good news about that. But I think the way you’re going hear that news is we’ll announce the final product, you know, is in production. You asked why is it the holy grail? Well, some of it is technical, and some of it is aesthetic. The aesthetic would be that it’s more of a neutral color.

So if you are not just looking through a sunroof, but let’s say you’re looking through a side window of a car, you may not wanna see blue as much as you would through a sunroof where people are used to seeing blue sky. The other is technical. So the reason that our current particle looks like a sapphire blue is because it blocks in all areas of the spectrum except one, which is the dark blue. So the dark blue in sunlight gets transmitted, that’s giving it a blue color. If you can also block in the dark blue, then you’re gonna have far less light coming through.

So while in the dark state of the current SPD, there’s 99.5% of the light being blocked, that half of 1% is still coming through and making it look blue. If you’re able to close-up that gap, it’s gonna look opaque. So so you won’t see any image or any any colors through that. You asked about whether it be used in combination with PDLC, and it depends on what you’re trying to achieve. For the most part, SPD by itself or PDLC by itself are good at achieving privacy.

Maybe there would be a slight advantage in the black with with more privacy, but not a meaningful amount where it would be the the reason you would go black versus blue. And if you recall the question I answered earlier, with PDLC, a lot of times, it’s when you wanna have privacy with light coming through because PDLC doesn’t block light. It scatters it. So it allows light to come, come through, but it does achieve privacy. And it does have some advantages, in terms of getting that movie theater type screen look when you’re when you’re going for that in a display application.

But for the most part, I think a black would be a, you know, a significant development in the industry. I think that it would give architects and designers the ability to have a more neutral color, and I think that would be useful, you know, especially in things like vertical windows on the side of cars or buildings. I I think other than the timing issue, which I can’t answer at this point, I’ve I’ve answered that. But if I forgot anything, let me know. Has there been any projects that have been put on hold waiting for the commercialization of the dark particle?

No. No. But it’s certainly an improvement in performance. And, you know, we always are striving for better and better performance. Mhmm.

The upcoming shareholders meeting, is that going to be open? Or It’s open to everybody, and and I it’s open to everybody to attend. It’s at Research Frontiers. Unlike in you know, ever since we started to do quarterly conference calls with investors, it used to be that the annual meeting was the main, you know, opportunity to get a report on the operations of the company. Given the fact that it’s only a few weeks away, you know, the different quarterly calls are really where we’ve chosen to give, you know, more fuller updates.

So it is probably mostly gonna be an administrative meeting where, you know, officers are directed and or elected and I’m sorry. Directors are elected and the agenda items are are put up for a vote. But it’s not going to be one where there’s gonna be, you know, a new report unless, of course, something happens, in which case, we’ll announce it regardless of whether there’s an annual meeting or not. But everyone is encouraged to attend, and and please vote. It’s important to vote.

Do you have any products to demonstrate there? We have a whole design center here. So if you’re in the Woodbury area and you wanna see some really cool smart glass that’s operated with by Amazon Alexa or automatically through sensors or through a whole variety of things, you’re welcome to come and and experience that. But you don’t have to wait for the annual meeting. Come anytime you want.

I’m here. Are any of the products have the dark particle? No. We’re not we’re not showing that until it’s commercial. Okay.

Thanks. Except except the except the people that are developing products based on it. Okay. Thanks. While I’m at it, there was another question from John Nelson.

And John, by the way, I appreciate the fact that you’ve substantially increased your ownership even beyond what’s listed in our proxy statement. So thank you. Your question was, are you seeing any effects of The U. S. Trade tariff policy on your business?

Are there any changes in strategy because of this? And I think, you know, we went into some detail last conference call about how the premium market is not really affected. So Ferrari is not really affected by by this. Rolls Royce today got a some sort of relief from The US on tariffs. I think Trump made the point that you’re probably not going to build a Rolls Royce factory here in The United States, so we’ll give you a break.

But for the most part, you know, volume manufacturers are going to deal with the tariff situation, and it looks like they’re all negotiating for reasonable trade deals. It hasn’t really affected us. And I think more specifically, if you look at the announcement that Gauzy made in in April, they said that it hasn’t affected them either. And it’s because we all have worldwide footprints. It’s not like, you know, we’re really isolated and only exporters or only importers of product.

We we have a presence all over the world, and that’s and that’s been helpful, especially in the world of tariffs.

Erica, Conference Call Operator, Research Frontiers: Our next question comes from Leonard Litzo. Please state your question.

Joe Harari, President and Chief Executive Officer, Research Frontiers: Hey, Joe. I have Hey, Leonard. I have a question. When you you mentioned that, you know, one of the areas would be the display areas, and I know you’ve been working with LG and all of that sort of thing. And I’m just wondering, is there anything that is gonna come soon in that area?

Well, you know, I I guess the best way to answer that without directly answering your question, because I don’t wanna speak for LG or or for the customers of their product. But there’s been a lot of public visibility, especially in the area of train windows in terms of embedding, OLED displays inside of, windows. And, you know, and I think if you just look in general at what’s been happening, even let’s just take the Cadillac sunroof. It’s a four quadrant sunroof, and it has all sorts of things embedded in there besides SPD, such as LED lighting and other things. So the glass itself is becoming more fun functional as part of the car.

And I think you’ll continue to see that trend with OLEDs come you know, combined with SPD so that you can get really good displays and good information projected well, not projected, presented on on glass surfaces. And that’s the extent of things like heads up heads up displays too. Okay. Thank you for that. I also noticed that in heavy equipment, you know, it’s being used in in the windscreens and that.

Is that a trend that, means visors are not gonna be needed inside of most cars? Yes. You you know, you’re beginning to see things happen in that shade band above the AS line on your windshield, and you mentioned also heavy equipment. You know, a lot of construction equipment has a lot of glass, and they become ovens. And you can’t slap around huge air conditioners in your, you know, your harvester or whatever.

So being able to control the heat coming in, you know, with with the glass doing the work becomes very significant. See, I expect these trends to continue. And and, you know, Gauzy’s subsidiary Vision Systems has always been in the forefront of that market with, you know, specialty specialty equipment uses for SPD as well as, you know, the bread and butter, you know, aircraft and boats and things like that and airplanes. Yeah. So we so we’re we’re we’re very close to profitability now, so we’ll probably cross over that by the end of the year.

If we stay on the track that I expect, we can have a very good year. Well, bless you, and I hope we get there. Okay. Thank you, Lynn.

Erica, Conference Call Operator, Research Frontiers: Our next question comes from Jeff Harvey. Please state your question.

Jeff Harvey/Mike Kaye, Shareholders/Analysts: Hi, Joe. I got a couple

Joe Harari, President and Chief Executive Officer, Research Frontiers: of accounting questions. Under current assets, you’ve got royalty receivable, net of a million to reserves. What are the reserves for? Our reserves are for once something goes over a certain level of collect of time, we put a reserve in there. Some of that is very old.

And some of it is also on receivables, just timing. You know, at the end of the quarter, you know, especially as our sales have ramped up, at the end of the quarter, money is due, The licensee doesn’t necessarily get invoiced or pay it until, you know, a short period of time after that. So you’re gonna see at the end of every quarter, and that’s gonna become an ever larger number as revenues grow, you know, something that’s in transit. Well, then under cash flows, you’ve got a royalty receivables of a negative 310,000. What’s that?

Yeah. That’s those Say that again? I said under a cash flow from operating activities, you have royalty receivables of a negative 310,000. Yeah. That that basically, you would you would put add that back in.

You’d add that back in. Okay. Right. Now, Gauzy, sometime last year, in fact, you and I had talked about had announced that they were talking about 50,000 cars a year. What’s happened to that?

Is that still on track? That that that that 50,000 car per year was not an SPD project. As far as I know, it’s still on no. That’s they have things that are much larger than that for SPD that are on track though. And are you So I’m not allowed to talk I’m not allowed to talk about that.

Sorry. No. I understand that. You’re still on track for the new Asian car model that you talked about? Yeah.

As I yeah. As I said earlier, we we had we’ve mentioned in the past an Asian project, couple European projects, and a US project, and they’re all on track. And then since then, we’ve added another European one. So between the March, early March call and the early May call, we’ve we’ve actually added another project in Europe. Yeah.

And you brought up a good point today, and I I hadn’t thought about it. But companies like Caterpillar and Deer make a lot of equipment where the guy is gonna pry inside. I would think that would be a a really good market for for this. I hope Gauzy or somebody I mean, do you have any other company that helps you market this stuff to companies like that? Sure.

Every one of our licensees is marketing their products through their sales and distribution network. And Gauzy happens to have a very large footprint in all the major areas of the world. But they, you know, they bought Vision Systems, and Vision Systems was doing that work for the specialty equipment market quite successfully. So, you know, things like, you know, container handlers at ports and things like that also use a lot of lot of glass. You know, they’re huge cranes.

I mean, you can’t drive by a board. Is there anything in the works where potentially one of these companies is gonna adopt SPD for for for this? Oh, sure. Oh, sure. Okay.

Because it makes a lot of sense to, like, any of the It does. It does. Yeah. It does. Yeah.

And those are things where, you know, they’re you they’re they’re workhorses, so you can’t sit there and, you know, put a huge air conditioner in there and take up all your cabin space. So that’s Okay. That’s where the glass becomes important. Okay. Thanks very much.

Thank you, Jeff.

Erica, Conference Call Operator, Research Frontiers: Our next question comes from Mike Kaye. Please state your question.

Joe Harari, President and Chief Executive Officer, Research Frontiers: Hello. Hi, professor. How are you?

Jeff Harvey/Mike Kaye, Shareholders/Analysts: It could be better. I just want to comment on something you said regarding having people being aware of Research Frontiers. I read all of the Gauzy reports. And even if research even if SPD is used in one of the Gauzy products, It’s very deep inside. And if you want to make the investment community aware of Research Frontiers, I respectfully submit that you cannot rely on Galaxy.

They have their own agenda. And in their press release so if you ask most people, they would know that Research Frontiers is connected to the SPD and has all these applications. So I feel you should consider, given the fact that the company has no debt and is seems to be on the cusp of being profitable to hire a decent investor relations company to make its story known to the investment community. Gowdy has a lot of other things to do than to try and publicize Research Frontiers because it does. Okay.

Also, I’m not clear, Joe, and I know you could elucidate. I was and I follow this quite closely regarding tariffs that when the tariffs go through, it’s going to make a if you have a tariff on parts of cars or cars themselves that is going to significantly increase the cost of the product, whatever the product is. And now if you want people to add SPD to it, that, of course, will be an additional cost. So am I correct in you’re saying that the tariffs will not have any significant effect on the sales of various kinds of automobile?

Joe Harari, President and Chief Executive Officer, Research Frontiers: Right. Yeah. What what I said last time at the on the conference call is that, typically, if you’re talking about a price sensitive market, like, you know, mid mid level cars or below, it might have some impact, but I don’t expect that to have any practical impact on our revenue in that market.

Jeff Harvey/Mike Kaye, Shareholders/Analysts: Yeah. I see.

Joe Harari, President and Chief Executive Officer, Research Frontiers: You know? And also and also and also these Asian cars are sold in their home market primarily. So it’s not like they’re gonna be affected by US tariffs. In the premium market, take the Ferraris and the Cadillacs, it doesn’t make a difference. People people are gonna buy them, and it’s not gonna matter.

You know, I think Ferrari announced the 10 price increase. I don’t think anybody canceled an order because of that. You know? So so I I think that and then the other thing is just understand that that because we have a worldwide footprint, that also helps too. And, you know, if you look at how some of these paid deals are going, Michael, you know, you look at content US content of cars, for example, and they’ve gotten some relief.

Well, you know, we we’re considered a US content, you know, component of a car.

Jeff Harvey/Mike Kaye, Shareholders/Analysts: Right. Yes. That’s right. Because if people

Joe Harari, President and Chief Executive Officer, Research Frontiers: Well, because because we’re we’re we’re we’re here, Gauzy is here, and all the glass companies have facilities here. So it’s not like, you know, it’s not as dramatic as some of the things where you have to build, you know, a $500,000,000,000, you know, chip factory in The United States. That production is already here.

Jeff Harvey/Mike Kaye, Shareholders/Analysts: I see. Yeah. And if people have enough money to buy a Rolls Royce or Ferrari, these premium cars, a few thousand more isn’t gonna make much of a difference to them. But I really what I really had in mind is you once said this is really where the revenues are going to come from would be from the, you know, low price or mid mid range types of automobiles, especially That’s where the where that’s where

Joe Harari, President and Chief Executive Officer, Research Frontiers: the volumes are coming from. I’m not saying that’s where our, you know, profits are. And certainly within the time horizon that I’m looking at for this, it’s not gonna impact things.

Jeff Harvey/Mike Kaye, Shareholders/Analysts: And are the are the sun visors, what’s the status of that? Will that

Joe Harari, President and Chief Executive Officer, Research Frontiers: be available? Well, it’s I’m not gonna preannounce what customers are doing. So I think you just have to wait on that. Some of them will be built into the car, and some will be aftermarket items.

Jeff Harvey/Mike Kaye, Shareholders/Analysts: Oh, if I pay you the system

Joe Harari, President and Chief Executive Officer, Research Frontiers: Okay. I think, Michael, I think we in the interest of time, we need to move on because there’s other people in the queue with questions. But we could talk offline. We could talk offline.

Jeff Harvey/Mike Kaye, Shareholders/Analysts: Okay. Thank you.

Joe Harari, President and Chief Executive Officer, Research Frontiers: Thank you. Our

Erica, Conference Call Operator, Research Frontiers: next question comes from Todd Brady. Please state your question.

Joe Harari, President and Chief Executive Officer, Research Frontiers: Hi, Joe. Todd Brady here. Hi, There’s some kind there’s some kind of a trend going on where you have text, but a lot of the manufacturers and the display people, they now want to have that text converted to speech. So you have text and speech combined. Do you see any of that developing?

And can you expand on it? Well, not directly with SPD, but my windows in my office here in Woodbury, I could talk to and, you know, and tell them to clear up or darken, and they do. So, you know, voice control is something very, you know, I think very important, especially for safety and driving. So there’s been a lot of work done there. But, yeah, when it’s pretty easy for us to and it you know, whatever whatever is developed there are would work with us.

Okay. Thank you. Thanks.

Erica, Conference Call Operator, Research Frontiers: Once again, if you would like to ask a question, please press 1 on your phone now. We have follow-up question from Francis Coturbo. Please state your question.

Joe Harari, President and Chief Executive Officer, Research Frontiers: I believe that Joe, well, one last question. Are there any prospects of anyone else manufacturing the emotions in film other than Gauzy? I’d rather not comment on open call. We’ve we always get interest from companies that wanna expand into FPD, and, you know, that’s a bigger strategy. Right now, we’re very happy with the investment that Gauzy has made in terms of expanding production worldwide.

They significantly invested in the SPD facility in Germany and in establishing sales and marketing arms throughout the world and then increasing emulsion production both in Israel and in other areas of the world. So they’re doing exactly what a good partner they are for us would do. And that’s expanding and, you know, thinking long term and and cooperating and and collaborating. But but the plant in Subcar, they only they’re only capable of making seven, eight hundred thousand square meters of film? Because that’s current line well, they built in redundancy there.

So they could actually have a line right next, you know, next to the one that’s there and double the capacity. But my guess, Frank, is that they are going to locate the next filmmaking plant somewhere else in the world that’s closer to the major customer. So, you know, Stuttgart is near a lot of obvious premium car makers, but, you know, there’s a lot of, you know, business in other areas of the world too, North America and in Asia that where they may they may also locate it. I don’t think anyone’s gonna locate it in China, but, you know, both for, well, for intellectual property reasons, but also for other reasons as well. Okay.

Thanks. Thank you.

Erica, Conference Call Operator, Research Frontiers: Our next question comes from Charles Michael. Please state your question.

Joe Harari, President and Chief Executive Officer, Research Frontiers: Yes. Hi, Joe. Hey, Chuck. I wanted to yes. I wanted to ask about the the dynamic glass act, but there really hasn’t been much discussion about, like, office windows and or what what progress are we making on on those sorts of products?

That’s a great question. So I think a very significant development in the in the SPD office window market is coming from the retrofit. And I mentioned that we expect the second half of the year to be much more visible there. If you think about an office, let’s say you have an office and you wanna out you know, be make it smart. Well, if you’re, you know, doing a traditional installation, you gotta get landlord approval, You gotta get permits.

You gotta build scaffolding underneath if you’re anywhere above the First Floor so that, you know, debris and glass and things don’t fall on people that are walking by there. And it’s very disruptive. You may have to move out of certain areas of your office while that kind of work is being done. Now let’s flash forward to a world where there’s a retrofit from the inside of the building. You don’t need scaffolds.

It’s more like a Venetian blind or a shade where you don’t need approvals. Right? And you could come in over the weekend and, you know, we’ve discussed the, you know, capacity to do this and it’s quite doable. And, you know, retrofit floors at a time without disrupting anyone’s work. So we’re very excited about that because it minimizes tenant disruption and it or occupant disruption, and it minimizes cost.

Yeah. I I I think you, you know, you make a good case for it, but I’m just wondering, you know, what about, you know, what’s been the result in terms of purchases? We have projects underway. We have projects underway even without the retrofit application being finalized. And then we have the retrofit coming.

So the progress is there are architectural installations, plus there’s, you know, I think, what I consider a game changer, which is the ability to retrofit an existing window into SPD Smart Window. It’s not something other people can do either. So it’s, I think, it’s very meaningful in terms of competitive advantage that not only do we have the best performing technology, but I think we have the best delivery system for that to get it more easily into your home or office. So so who has I’m not clear. Who has to approve of this in force to be able to do these retrofits?

Well, the customer has to want it. So just like any buying decision, it’s the customer. But, you know, there’s product development that goes into it that we’re doing. And there’s, you know, data generation, you know, for the architect so they know that if they retrofit a building, what are their expected benefits likely to be? I see.

All that’s being worked on now. Thanks a lot. Thank you, rep mhmm. Bye bye. Bye bye.

Erica, Conference Call Operator, Research Frontiers: Once again, to ask a question, please press 1 on your phone now. At this time, we have no further questions. I’ll turn it back over to your host for some closing remarks.

Joe Harari, President and Chief Executive Officer, Research Frontiers: Okay. Thank you. So if you believe in smart glass done right, stick with us and our licensees. They’ve already accomplished more with SPDs than any other smart glass company in the world, And they have far more in the pipeline than ever before. As a company, quarter after quarter and year after year, we’ve steadily grown revenue, streamlined operations and advanced our technology.

The reasons for these positive results are easy to understand. We have a highly desirable and the best performing smart glass technology in the world. By increasing revenues, managing our expenses and preserving the best aspects of our asset light business model, we’re steadily moving towards being cash flow positive and profitable. Our Q1 twenty twenty five results demonstrates this trajectory. Royalty revenue is up over 79%, two fourteen % if you are comparing us to the fourth quarter sequentially, and it’s primarily driven by higher royalties in the automotive market.

And this growth builds on our successful integrations of SPD Smart Glass and vehicles from Ferrari, McLaren, Mercedes, and Cadillac. Mercedes debut of their luxury van this past month also shows that SPD SmartGlass and automotive is not just for sunroofs, but also has meaningful benefits in other areas of the car, such as side windows. There are also other unannounced projects in automotive out there that will also show this. And we expect revenues in all market segments to increase further as new products are introduced. We are excited about and continue to see significant potential in the architectural market, especially with the anticipated launch of the retrofit application.

Regulatory support such as the Dynamic Glass Act, which offers substantial tax credits, should further encourage the adoption of our SPD SmartGlass in buildings. Our relationship with Gauzy, our licensee and strategic investor, remains very strong. We work very closely with them hand in hand on a daily or weekly basis on various projects throughout the world, sharing information and ideas and business development. Their SPD film sales are a very good leading indicator of our royalties, and their recent IPO this past June has brought greater transparency and resources to the industry, which should greatly benefit our entire SPD SmartLabs industry. Research Frontiers and our shareholders also will benefit from that.

And together, we are reinforcing the market position of SPD SmartLabs as the premier smart lab technology and further expanding our footprint and capacity throughout the world. And I look forward to listening to their investor conference call this coming Tuesday morning. Financially, we remain debt free with low and predictable expenses and are approaching breakeven and profitability. Our strong cash position projected to fund operations for more than the next five years and no debt means we are in a position of strength and do not need to raise additional capital at this time. The outlook for the smart glass industry remains extremely promising, and we stand at the forefront leading this industry, driven by our superior technology, increasing demand and regulatory support and continuous innovative breakthroughs.

We’re not just advancing the state of smart glass. We’re shaping the future of how people experience what they see and feel through that ubiquitous material glass. This coming year, based on the momentum and catalysts we see, we expect you to see even better results. We remain intently focused on execution, innovation and driving significant shareholder value. Your support, dedication and belief in our vision have been instrumental in our success, and we appreciate your trust and support in this exciting and important journey together.

Thank you, and please remember to vote at our annual meeting coming up on June 12. Thank you all.

Erica, Conference Call Operator, Research Frontiers: This concludes today’s conference call. Thank you for attending.

Joe Harari, President and Chief Executive Officer, Research Frontiers: The host has ended this call.

Jeff Harvey/Mike Kaye, Shareholders/Analysts: Goodbye.

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