Good afternoon, ladies and gentlemen. Welcome to Research Frontiers Investor Conference Call to discuss the fourth quarter of 2022 and year-end results of operations and recent developments. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions by pressing star one. This conference is being recorded today. A replay of this conference call will be available starting later today in the investor section of Research Frontiers' website at www.smartglass.com, and will be available for replay for the next 90 days. Please note that some of the comments made today may contain forward-looking information. The words expect, anticipate, plans, forecast, and similar expressions are intended to identify forward-looking statements.
Statements that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions that are part of the Private 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. If you find that your question has been substantially answered, as a courtesy and to allow time for other shareholders to ask their questions, please remove yourself from the queue by pressing pound one. Also, we ask that you keep your question 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.
Yeah. Thank you, Paul. Hello everyone, and welcome to our fourth quarter of 2022 and year-end investor conference call. I'm gonna keep things more informal than usual today because I wanna open up the floor to questions and discussions. We built off a number of very positive developments in 2022 and started 2023 off quite strongly. Gauzy had their largest booth ever at CES this past January and moved into the prestigious Automotive West Hall. Major worldwide customers such as Bosch, LG Display, LST, Talgo, and Continental joined them with various products, mostly for automotive, aircraft, trains, and boats, but also showing architectural applications. That was just the first day of the show. That night, the CEO of BMW at his opening keynote speech at CES, aided by Arnold Schwarzenegger in person and David Hasselhoff remotely, showcased BMW i Vision .
The car was equipped with its glass all around being SPD-SmartGlass. Highlighted prominently in Oliver Zipse's keynote and BMW's press releases was a heads-up display that added vast functionality and readability because of the SPD component. You can read more details in the press releases about this, but I was there at CES from the beginning, and some of our shareholders had even visited. You could see SPD at the Gauzy booth as well as other places, and it was impressive and prevalent. Moving to another active licensee, AGP has visibly expanded its operations to now be headquartered in Belgium, close to many of its European customers. They have several SPD car models coming out this year. They also expanded in Flanders, and they also have an amazing, highly automated smart glass factory in Ghent, Belgium.
I visited it. It was really impressive. We also focused on positioning your company well over the past several years. I mentioned in one of the previous calls, in response to questions about economic uncertainty, how Research Frontiers had positioned itself to be somewhat recession-proof and certainly inflation-proof. That continues, and I guess it's been well that we have done that, 'cause those things seem to be lurking or here. We are also patient, and because of that, we ultimately win over the customer. Many of you that have followed the smart glass industry, might be aware that both Mercedes and Ferrari both used another smart glass technology before switching to SPD. This year we expect another OEMs that originally selected another switchable pin technology to switch over to SPD.
Usually the OEMs ultimately understands that not all smart glass technologies or the company supplying them are created equal, and we foster this by education, continuous improvement, data, having a high performing technology, focusing on being a profitable business and constant refinement of our business model, as well as good partnerships and cooperation with our licensees and a drive to reduce costs and to diversify the industries we're in. We and our licensees are constantly tapping into and fulfilling the need of customers to offer solutions to their customers and enable them to deliver new and improved and innovative products. With that brief introduction and recap, I will now turn to some of the questions that we received by email. Tom had asked, last conference call, you said that quote, "All indications are that GM is drilling SPD or will pretty much in those words.
Can you give some details on this and why do you believe this? Do you have any specifics on that that would be important to investors? Well, let me, let me first by saying that General Motors has adopted SPD-SmartGlass in their flagship electric, the CELESTIQ. They've announced continuously now their EV strategy, which is to really introduce a number of much higher volume EV vehicles, you know, starting this year. Why am I confident that they're going to expand into other things? Well, simply put, they told me. I'll give you a little bit of the background. Initially, I spoke at a conference on switchable, well, on glass in general, automotive glass in general.
The head of GM's glass and roof systems attended my presentation and then attended the breakout session that I had hosted. We spoke afterwards, and about 1 year later, he told me that they had several car models that they had slated SPD for and asked my advice as to how to proceed with that. Of course, I gave it to them. You know, they have a number of vehicles that are coming out after the CELESTIQ, but this is their flagship. This is their bespoke model. It's hand-built and, you know, it's a beautiful car. Another question Tom had asked, please talk more about Hyundai, the Magic Roof, as this was out on the Internet. I know you can't get too specific.
I spent a lot of time on the last conference call speaking about Hyundai as a company and about, you know, the Grandeur, the GN7, and some other vehicles that they have. What I'd like to do now is just focus on, you know, what's in it for them. What's in it for Hyundai? First of all, to the extent they put this on internal combustion engine vehicles, they're gonna save 4 g/km in CO2 emissions, which is very important, especially in Europe, where there's penalties for not hitting CO2 targets. And in general, their fleet will have better gas mileage by using SPD-SmartGlass. If they put it in the electric vehicle area, you're gonna get an estimated 5.5% increase in the driving range.
Of course, you get the halo effect of having what's on Mercedes, McLaren, Cadillac, and Ferrari. Those are reasons that I think Hyundai is on a good path with that. Another question came from Chuck. I'm gonna try just to use first names here just to preserve some privacy. With the Dynamic Glass Act passed and other progress happening, when are we going to see a significant number of SPD windows in offices and other buildings? I'm gonna ask you, Chuck, to hold that question because I will answer it in my closing remarks. The other question you know, you had is about the Dynamic Glass Act itself.
Certainly that changes the dynamics for the better because it's offering a 30%-50% tax credit for adoption of smart windows such as SPD. It makes the economic equation that much better for people adopting it. This is from David. Many licensees have patents for various SPD uses. Do these licensee patents significantly hinder the implementation of SPD by other licensees? One of the things that we wanted to make sure of is that it wouldn't hinder other licensees from using improvements that develop over the years. Every one of our license agreements has, and you can look at Section 10.4 usually of the license agreement.
There's a license back, David, that basically, when the license terminates or expires, we get rights in all of the IP related to Smart Glass and SPD. Another question came from William. The CHIPS Act with the focus on Made in America brought about by the CHIPS Act, are there any ramifications for Research Frontiers? We have a number of U.S.-based manufacturers. To the extent that there's economic advantages for manufacturing in the U.S., our licensees all have operations here. We have some licensees that are only in America. That's good. Okay, this comes from Jeff. Several of the EV makers are in financial difficulty, and some will not last long.
This will limit use to the major automotive companies which are harder to gain entry as their planning starts years ago. How do you assess the current market? View is in financial difficulty, how does that affect you? Okay, well, let me kinda take both questions. One of the advantages of being in the licensing business is that we can afford to be nice to everybody in the electronic, you know, the electric vehicle industry. We really don't have to pick and choose who we work with because quite frankly, nobody knows which EV makers are gonna be successful and which ones aren't. There was even doubt years ago, whether Tesla was gonna be able to make more than 10 or 20,000 cars a year. You know, they've gotten their act together, you know, quite nicely.
We expect there to be shakeouts. You know, I'm a student of business history, and if you think back to the turn of the 20th century, there were so many car makers, most didn't make it. You wanna cast a wide net, but being a licensing company, we can. The other part of your question is about if this starts moving only towards established car companies, how does that affect us? Well, one thing I would say is that our bread and butter has been the established car companies, Mercedes, McLaren, General Motors, Ferrari now. The fact that we've proven ourselves both from a reliability standpoint, which is something that the existing car makers certainly admire and respect, has been very beneficial to us.
you know, we have a long track record, and it's one that is a prestigious track record. If the electric vehicle market ends up going to the established car makers, we'll do well. If it goes to some newcomers, we'll also benefit. As far as your question about View and their financial difficulty, yeah, they are not doing very well financially, and we'll probably learn more on March 29th when they have their year-end conference call, which is pretty much the last minute. They've been somewhat of a negative force for the entire architectural smart glass industry.
You know, first, they've had financial and accounting issues, plus, it's very hard to figure out what a smart window should cost because they've been heavily subsidizing, their sales to customers, which is why they ended up losing $260 million last year. You know, they are doing what they can. As well, not too much to say other than, I wish all of our competitors well. They create a great reference point for a better performing, technology and a real business. Another one comes from Judy. I recently came across this TechCrunch article claiming that the passenger display portion of the CELESTIQ mega screen will incorporate SPD privacy blinds to minimize driver distraction. Is this fact or fiction?
Well, you can't always read what reporters will say. I will say this: Some OEMs are working with SPD to minimize driver distraction. For now, the only thing I'm sure of is that SPD-SmartGlass will be standard on the CELESTIQ roof. We certainly have had broad discussions with GM about the benefits of SPD, so nothing there would surprise me on that. Okay, I think we answered most of those questions. From John, Robert, is Resonac previously known as Showa Denko and Hitachi Chemical an active licensee producing and selling SPD film? With the passing of the IRA, have REFR architectural glass licensees experienced a material increase in inquiries and sales? Bob, thank you for the questions.
The Inflation Reduction Act or the, as it was titled when it was introduced, the Dynamic Glass Act, certainly changes the economics of buying smart glass or, and, or putting it into, you know, small and large office buildings and residential buildings and also homes. As far as your question about Hitachi Chemical, as we noted in our 10-K, Hitachi Chemical had sold their division that was doing the SPD film to Showa Denko, and it's now been rebranded as Resonac Corporation. They continued to sell film into late 2022, but we think that, you know, because this division is part of something that just kinda moved from company to company to company, there's the possibility that they may reduce or wind down that business because of this.
However, that shouldn't affect us because of Gauzy, whose film is comparable in performance and in many cases better than the original film, and it's certainly less expensive, which expands the market. Thank you for that question, Bob. Okay, this is from Claire. I recently saw an ad for an electric BMW that had a sunroof that appeared to be using SPD technology, although the technology was not mentioned in the ad. Do you know if this was SPD technology? Originally, they were using something else, more often than you can imagine, and I kind of alluded to this before, the OEMs soon realized that other switchable glass technologies like PDLC or electrochromic has problems. As I mentioned, we're selling a new OEMs this year for this very reason. I think that's...
It's good that they're experimenting with things. I think ultimately, when they do the high volume production, and they want the real stuff, they'll use SPD. I also just wanna thank Matt for his kind words about a dear friend who we lost, Ron Rosado. Ron was a longtime shareholder and a broker, and really was an amazing person. I've spoken to Ron many, many times, and I wish his family well, and that he rest in peace. I think at this point we've answered most of the questions or all the questions that were emailed to us. What I'd like to do now is have Paul open up the floor to any live Q&A that people might have that we haven't touched on already. Afterwards, I'm gonna make some closing remarks here.
If you would like to ask a question, please press star one on your telephone keypad now. You will be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, to ask a question, press star one on your phone now. Our first question comes from Leonard Leetzow, from Wealth Planning and Design. Your line is open.
Thank you very much. Good afternoon, Joe.
Hey, Len. How are you?
I'm doing well. Thank you very much. A question. I think I was reading that Gauzy was going to be going public with an IPO probably in the first quarter. Number one, is that true, and will it happen?
I read the same article you did, Len, and I think ultimately, Gauzy's goal is to go public. I think it has many benefits, one being it gives visibility into their strength as a company and provides expansion capital. A lot of large OEMs like to know who they're dealing with. You know, Gauzy has, you know, some very well-heeled investors, such as Hyundai and others, that I think, you know, would welcome a strong supplier like that. I can't comment on the timing of that. I think that for a long time, I think we all realized that the IPO market has dried up. We're also seeing that it's beginning to thaw out, and good companies like Gauzy, I think will do very, very well when they do go public.
I'm gonna limit my comments to that. I probably know more about this than anyone outside of Gauzy and maybe even more than some people within Gauzy. Let me just limit my comments to that at this point.
A second question. I know that they have increased the amount of emulsion that they have been making. That was announced almost a year ago.
Right. 5x increase. Yeah, the 5x increase in their capacity.
It has to be going someplace, so, you know, isn't that gonna push us towards positive earnings per share relatively soon?
Yeah. I'm delighted that they're making that investment that's gonna benefit not only their investors but our investors as well. You know, I can't say enough nice things about Gauzy. They really are an amazing company that, you know, really is doing smart glass the right way, and that's what originally attracted us to them, is that we both shared the same vision as to where this market can go, if it was done right.
Are you content with where it's going and the speed with which it's getting there?
I'm never content with that. I was born in six months, Len, so, you know, for me, waiting is not top on my list of virtues. On the other hand, I think it was very important that we and Gauzy does, you know, do things the right way. You know, you don't wanna have either bad starts or false starts with a new technology, and I think that that has proven, you know, to be a good approach for us. When companies haven't done this, we've seen companies like View that, you know, really ran into tremendous problems and, you know, some of them can end up killing the company.
I think it, y ou know, you wanna do it right, and they're doing it right. They're making the investment to do it right, and they're hiring people to do it right. If you look at kind of their hiring patterns, I think you'll get a real good feel as to not only what they're doing but where they're planning to do it.
Yeah. With the Glass Act having passed, I think the credits start hitting in January of 2024. Is that still accurate? If they order now, do they get the benefit of?
I think you have to put it in service by then. Yeah, so you won't miss out if you do it in 2023.
Oh, well, that would be very good for us.
Yeah. Very, very much so. Very much so.
Okay. Thank you, Joe.
Thanks, Len.
Thank you. Our next question comes from John Nelson, private investor.
Your line is open, sir.
Hi, Joe.
Hey, John.
How are you doing today?
I'm great. Thank you very much.
Mike, I've got a couple questions, but the first one is kind of a broken record question as far as any updates on the visor, the windshield visor.
That actually has started to incorporate itself into some vehicles already in a built-in sun visor. A lot of the test vehicles that we do, the concept vehicles that we do, have that kind of concept already built into it. You know, in McLaren's case, they actually put it into the windshield itself. As far as the fold down sun visor, you know, that's moving forward, but mostly targeting the aftermarket. Until that gets introduced, there's not much I could say about it other than it's being worked on by several licensees, and I think it's a good application.
Okay. Great. This next one you may or may not be able to comment on, but it looks like we're set up at REFR for a significant jump in revenues in 2023. Is that a reasonable assessment?
I think if you look at the, this is by the way, I don't know if anyone noticed, but in prior conference calls, I used the F word without mentioning the name of the car company. For the first time in our 10-K and in our press release today, I mentioned Ferrari. I was really pleased that earlier this week, Ferrari started saying that cars are being delivered to customers. Actually, one of the Purosangue customers reached out to me indirectly to say how excited he was to get, you know, this smart glass in his car. It's between, you know, what we have with McLaren and what we have with Cadillac and what we have with Ferrari and what You know, it's coming out in Asia.
As I mentioned, it's not just one carmaker now, it's two over there that are unrelated to each other. I think a lot of people have assumed that, you know, Hyundai and Kia, you know, I view those kind of as joined at the hip even though, you know, they're separate companies. I'm talking about yet another company in a different part of Asia that also looks like it's coming out with an SPD product as well. Yeah, I think we're gonna have a good year. The jump in revenues, because a lot of these cars don't come out until toward the end of the year, may happen in the third or fourth quarter.
Okay. Great.
I think we're on a positive trajectory here.
Excellent. Thanks very much.
Thanks, John. Our next question comes from Michael Kay from Kay Associates. Your line is open.
Okay. Hello.
Hey, Michael.
Hello, Joe. You know, I'll tell you, I've been a shareholder for over, well over 20 years, and a very, you know, proselytizing the SPD and the company. You know, it's getting a little tired and old because it seems that even though you indicated you've reached a sweet spot regarding the cost of SPD film, and we have Gauzy, but it seems, you know, quarter after quarter, the fee income really is pathetic. Given the fact that SPD is the best light control technology on the market, and that the costs have been down to the extent that it's a sweet spot, using your words, I still can't understand why there aren't, you know, architectural firms, other car manufacturers, many of these car manufacturers, many of them are just like concept cars.
What about getting SPD into the lower priced cars that you indicate could be the case? Like Mercedes-Benz.
Okay.
Increase the volume, you know?
Yeah. Well, every car maker I mentioned is not a concept car this year. These are actual series production cars. I think people that, you know, are following the industry will look at a mid-level car manufacturer like Hyundai as being the potential to vastly increase the volumes. You know, if you're a farmer and you plant crops, you could stare at the ground for a long time, but each crop takes a certain amount of time to grow. We planted a lot of seeds, and this year three or four of them have already started to grow. One or two unexpected ones also came in that, you know, I think you'll hear about. All good stuff. I think you'll hear in my common, my closing comments, you know, some things that you might find also useful with respect to all of the markets, but also architectural.
Don't most companies want there to be more than one source of film? If you said that Hitachi basically, you know, most of the film production would be from Gauzy, which is fine. Previously, you said you were looking for a U.S.-based company that could manufacture the film. Is that still?
Well, I never said U.S.-based. What I said in the past is that you're looking for a second source. It's probably going to be, you know, co-located near their major customers. That may be in Asia, maybe in South Korea, maybe in Europe, maybe in the United States, depending on where the volumes are. The licensees make those kind of decisions about where to put their production facilities. I think that part of this also is that if you have competition among the glass laminators, you know, which we do, we have pretty much the who's who of the glass industry, then you'll satisfy the diversity requirement that a lot of people in the automotive industry feel comfortable with.
What about Panasonic? Has there been any progress regarding displays and the use of SPD?
Yeah, I think when you look at Panasonic, you should really look at who's supplying Panasonic, and that's LG Display. We've spoken about that. You know, they've had a very strong presence with SPD and their transparent OLED, which is a remarkable technology. I mean, if you see this in action, it's mind-boggling how good it is. It certainly is an attention-getter. You know, typically LG makes the displays for Panasonic and a number of other display manufacturers as well. Being there is very helpful for us.
Going with the market in planes and trains that seem to be on the upbeat, but there hasn't been.
All going very well. All going very well. I mean, if you look at CES, for example, Talgo, the Spanish train operator, had SPD. We were in the Deutsche Bahn train. We're in a number of things. We're in Japanese trains. You know, pretty much around the world, you're seeing SPD adopted for trains and other transit. You know, I must say that having Vision Systems as a licensee in that area has been extremely helpful because their focus from day one has been on trains and transit and buses and, you know, and all of their other ancillary businesses, whether it's the safety tech business, you know, or their electronics business. They all focus on, you know, providing high-end solutions to those industries. It's really good to have someone that is that knowledgeable about trains and mass transit vehicles involved.
Okay. I hope that we wouldn't have to wait another 20 years before, the stock, you know, performs in a way that correlates with people's confidence in the technology and your management.
Okay. Thank you. I, you know, it could be worse. You could be involved with either View or Crown and lose 95% of your value in the last year. We're, you know, we're holding steady in a market that's very difficult. We're in an industry that we seem to be, you know, the dominant player in now. You know, whether we have competition or not, we're gonna continue to do things the right way.
Okay. Thank you.
Thanks.
As a reminder, if you do have a question, please press star one on your touchtone keypad now. Our next question comes from Jarrod Sherman from Strategic Planning Group. Your line is open.
Hey, Joe. Thanks for taking my call.
Of course.
Question for you is just surrounding the revenues. I was hoping you could kinda help me understand, not necessarily from a guidance standpoint, but what it's gonna look like going forward?
Sure.
If we're in some planes and trains and yachts and a few, you know, high-end cars that produce probably very little numbers, and we're pulling in $130,000 in revenue, you know, what does it look like if we get somebody that moves 50,000 cars a year or 100,000 cars a year? From, like, a price point, what does that look like from a revenue-wise for us?
Okay. Great. First of all, let me just kind of back into the question a little bit. Revenue this year, when you, when you exclude, you know, one time and special events and things like that, was roughly the same as the prior year. All of the cars that are coming out haven't been reflected yet in our revenue for 2023 yet. 'Cause they're all coming out in 2023. They weren't in series production in 2022. If we took the original kind of estimates that we had when Mercedes-Benz was doing this, we were getting between $150–$225 per car in revenue, in royalties for that. Since then, you know, fortunately, the price of the technology has come down quite a bit.
You know, I'm thinking that probably a good estimate to use for your back of the envelope calculations, you know, would be anywhere from, you know, $75-$150 for the car now in terms of royalty per car. If you multiply that by someone putting in 50,000 cars, you know, you'll see that that can make us profitable, you know, clearly.
Isn't the size of the glass, I mean, the original ones, we're just looking at a standard sunroof? If the entire roof is glass, that doesn't improve the numbers for us?
It could in that you're dealing with a, you know, a larger piece of glass. On the other hand, a lot of the cost that goes into any kind of glass product, whether it's switchable or not, is the fabrication, so the interlayers and things that go into it. If you're, you know, if you're spending labor dollars to lay up a, you know, laminate piece of film, whether it's smart or not, you know, that's gonna cost you money, and it's, you know, it won't be as much on a larger piece of glass as a smaller one, but there'll be some difference. Yeah, it's certainly a benefit that, you know, sunroofs are becoming bigger and bigger.
You get the panoramic roofs or the ones that go from the, you know, the windshield all the way to the back of the car, like you see on the Model Y and some other vehicles. What's good about those panoramic sunroofs that are basically all glass roofs, is that the car makers have realized sometimes after the car goes into production, which is another opportunity for us, that you can't shade something that big with a traditional mechanical shade that pulls across, like you see on a typical sunroof. You need something else that can shade it. Now, in the beginning, they used heavily tinted glass to do that, but if you're putting such a heavy tint as to manage the solar heat gain inside of a car, you might as well just have a metal roof.
They're beginning to realize that they need a switchable, and the switchable also has the added advantage in that you're actually reducing weight. Even with a normal Bentley did these calculations years ago, a typical roof, if it went from a moving roof to a stationary roof that had SPD-SmartGlass in it, and that's the example they used at their presentation, would save about 56 components and about 13 pounds of weight in the roof. Saving the components is actually a significant cost saving because it's really the cost of assembly that's the cost of a car, not necessarily the cost of the components.
You know, we are not only more reliable because there's no moving parts in a SPD sunroof, but, you know, we should also help save you know, money for the car maker. Of course, you get the other benefits, increased headroom, you know, reducing the cabin temperature by 18 degrees Fahrenheit and other things like that.
The slow adoption of it, you don't think has anything to do with it being too costly of an item because you're saving elsewhere? It just seems like...
It is, yeah.
Such a good product, it's taken forever to be adopted. Tesla, you know, how does Tesla not use it? You know, it's stuck to these high-end cars. It's like, wow. I mean, no one's gonna touch it that's in a $50,000-$60,000 range?
If you look back at the, at the transcript of this conference call, you'll see that I said earlier on that eventually everybody adopts SPD. It's just a matter of us having the determination to make sure. You know, I wouldn't be surprised if Tesla was one of those OEMs that also did that.
Okay. All right, great. Thank you. Appreciate it.
Thanks, Jared.
Our next question comes from Art Brady, a private investor. Your line is open.
Hi, Joe. Art Brady here.
Hi, Art.
Can you comment on the AGP factory that was established? Was this built on exactly the same specs of the Düsseldorf that was built by Gauzy, or it's their own configuration?
It's a different type of factory, but it's a good question, Art. They do share one thing. They're both highly automated factories, so very low labor costs. The Ghent factory in Belgium that AGP has is highly automated. I mean, I walked through this thing, and we saw three engineers that were just looking at some monitors to make sure that everything was working okay. It was, you know... If you think through, what does that mean? It means that all of a sudden now you could approach Chinese labor costs because you don't have labor. Also the consistency and the reliability of an automated system. You know, once you make the investment in automation, is quite, you know, quite good payback because you're making a very expensive piece of glass.
You want it to be good each time it comes out. If you look at some of the videos on AGP's website, you'll see some amazing things that they've been able to do with our technology in their glass. The Gauzy factory makes film, which is a totally different process. It's a roll-to-roll web where you're coating an emulsion on a moving web of, you know, ITO-coated PET and then curing it with UV. It's a different process than what AGP is doing, which is taking that film that they would buy from Gauzy and putting it between two sheets of glass and using a hot melt adhesive like EVA or PVB or polyurethane to laminate that stack together into a laminated piece of glass.
About, two years ago, you were in a quarter, with, some of the Gauzy people. I'm wondering what the status is, if there's any movement there and when we might expect to see some revenue from, that experience that you had in the Middle East.
I think you're gonna see revenue from them from all over the world. They have a very strong presence in the Middle East. They have a very strong presence in Asia, all parts of Asia, actually. They have a strong presence in North America, and they're expanding all of these. I mean, I, you know, I'm privy to what their plans are, and I don't think they're doing this because they like the climate. I think they're doing it because they like the customers where they are. Yeah, we all expect a very good payback from this investment that they're making all over the world.
When do you think we could actually start seeing some revenue in that regard?
Well, you know, if you look at where, you know, they have the factory in Stuttgart that is making the film. It has the capacity to do 1 million square meters of film, and if they needed to replicate that elsewhere in the world, they can. They've quintupled their emulsion production. Those are probably the best leading indicators I could give you as to where I think their business is going. You know, if they are in fact going public, you know, they're not doing it based on having a me too PDLC product. They're doing it based on a SPD product. That's the strategy for growth at Gauzy too.
Joe, I wanted to ask you about these train accidents. Does Gauzy or any of your groups have any types of products that they could sell to enhance the safety of trains instead of them falling off the tracks as they've been occurring pretty frequently?
Both Gauzy and Vision Systems have very sophisticated sensor systems, and I wouldn't be surprised if, you know, some of those things could be deployed. You know, if you think about, you know, the tragedy that happened in East Palestine, you know, it was ball bearings that heated up. It's not anything to do with heat coming into the cabin or anything like that. They do have electronic sensors that might have been helpful. You know, if you look at the tracks in the United States, they were a mess, you know. I think you have to fix the roads that these trains go on before you fix the trains.
Yeah, I understand. Have you heard of a company called SolarWindow Technologies? Are you familiar with them?
Not very familiar. There's a lot of companies out there that are trying to do things in energy efficiency and generating power through transparent photovoltaics. You know, we like them. They're complementary technologies because, you know, if you look at what, for example, Vision Systems did years ago, they were partnering with a French company that had a transparent photovoltaic material that they were able to make a self-contained aircraft window, where you would just pop it into the side of the window. You didn't have to wire anything, and it would generate 20 times more power than it needed to operate the smart window, so you could charge your cell phone or other devices, you know, using solar energy. There's a lot of companies like that are trying.
There's some are homegrown in the United States that we've spoken to, and, you know, they have promising technologies. We, we keep track of them, you know, because we don't need a lot of power to run a smart window. Any of these photovoltaics, especially the transparent ones that don't typically generate a lot of energy, still can generate enough energy to power a smart window. Then the real benefit there is you could pop this into a building or a home or a vehicle without having to wire it up, and that eliminates the need for electricians to be on site, et cetera.
Thank you.
Thanks a lot, Art. Good talking to you.
Our next question comes from Michael Forster, Private Investor. Your line is open.
Joe, thanks for answering all the other questions. Since I'm the last in line, I think I've got enough information now.
Okay, great. Thanks, Michael. I think we have one more in the queue, that just joined.
We have. Sir, we have a question from Tom DiGiavo , a private investor. Your line is open.
Yeah. Hi, Joe. First of all, I'd like to thank you.
Hi, Tom for your efforts.
Hi. I think you're really working hard towards the right things. It's tough with a new product. It's got to get into the market. Anyway, the EV9 and the Grandeur, as you know, were mentioned with the Magic Roof. It's not been mentioned lately, but it sounds like Hyundai Kia is a possibility. The EV9 has been noted that it's gonna come out with some info on the 15th and perhaps more by the 30th. I know you mentioned Kia SUV stuff. Without getting too specific, it's coming out soon, some info on it. Do you see this as a car that looks like it could very well likely have SPD?
I think that it's a prime candidate for SPD, but I don't think it's gonna be first, and I'll tell you why. I think that if I was Hyundai, you know, I would probably reserve to myself first, you know, the good stuff before I gave it to my sister company in Kia. You know, you never know what the internal politics are between them. They're basically joined at the hip. I think that the work that Hyundai is doing with SPD, you know, and they're a direct investor in Gauzy, which I think is important to know, I think will benefit Kia as well.
Okay. That's.
I just don't think that. I just don't think the EV9 will be first. Look, I could be wrong. I've been wrong about other vehicles that, you know, in trying to handicap which ones were gonna come out first.
Something as soon as this month, you wouldn't be well aware of by this point?
I would think that if it's, you know, I don't think it's gonna come out this month.
Yeah. That's no problem. No problem. Yeah. That's good. Thanks for the answer. As far as the Grandeur, you know.
By the way, Tom, that doesn't mean that it won't come out on the EV9. It just may not be a, you know, it may be like a mid-model introduction or something like that.
Gotcha. Gotcha. Are you able to say if, you know, BOS was working on the Grandeur sunroof in a roundabout way because they're working with Gauzy, or not necessarily?
You're talking about a different company that we're very familiar with that is working on that project.
Yeah. Okay. With the.
Okay.
All right. Thank you, Joe. Appreciate it.
Thanks a lot, Tom.
Bye-bye.
If there are any final questions, please press star one on your touchtone keypad now.
I think we have one more in the queue, I.C.
Yes, sir. We have a question from Tom McCarthy from Raymond James Financial. Your line is open.
Hi, Joe. My question's already been answered, so I'll pass.
Okay. Thanks, Tom. Good talking to you anyway.
Yeah, same here.
We do have one that just joined the queue, and that's from Jeff Harvey, a private investor. Your line is open.
Hi, Joe.
Hey, Jeff. How are you?
My question is relate to GM, Ford, and Stellantis. I mean, I know it takes a long time to get in their queue for their electric vehicles. I just wondered if you can give us an update on progress with those?
Sure.
Big companies.
Sure. I, and I actually read your question earlier and answered it. I will say this, that, you know, in a nutshell, because of the track record we have with Mercedes-Benz and McLaren being in the other established automakers is actually a positive thing because they respect reliability more than anything else. That's certainly what we've had in our DNA since 2010. We've got the automotive market.
What about, what about cost, though? I mean, is cost a factor for these, for these mid-range, you know, inexpensive cars? Is that what's holding up adoption for this?
No, I wouldn't say that now because if you think about, you know, you know, the expectation is that Hyundai is gonna have this, and those are not very expensive cars. I don't think cost is gonna be the issue now. I think you have the benefits that become cost-effective when you don't have to, when you can eliminate 56 components and reduce the weight in the roof to increase the stability and increase the headroom and things like that. There's a lot of things that go into cost, but also the basic cost of these smart glasses, far lower now with the Gauzy film than it was with the Hitachi film. That's also enabled a lot of things to happen also, you know, it's, I will say this, just, because I gave some time to your question earlier.
Okay.
if once you do the, once you hear the replay, if you still have any questions, you know.
Okay.
Feel free to call me on my cell phone. I'm happy to go through those.
That's fair. Okay.
You're always welcome. You're a long-term friend, so I appreciate it.
Yep. Okay, Joe. Thank you.
Thanks, Jeff.
We have no further questions in queue. I'll turn the call back over to our host.
Okay. Thank you. I'm just gonna make a few closing remarks. You know, every day we all probably wake up, and we ask the same question, why would you invest in Research Frontiers? If you want to invest in the smart glass industry in a proven technology that's used across diversified industries, then we think the best place and actually the only place to get all of those benefits is Research Frontiers. If you think of Research Frontiers as a materials company that has worked to develop an extensive patent portfolio with hundreds of patents on a basic material, you know, it's as if we have a patent on stainless steel or titanium. Smart people out there then figure out how to use our materials as a solution to everyday problems.
You know, basic human needs: heat control, light control, glare control, safety, security, privacy, comfort, enhancing product performance. These are the things that our technology has allowed these companies to do. You know, we invite you to check the box of things that we've thought about and taken care of already. We have a strong and growing product pipeline, mostly automotive, but also trains, planes, boats, consumer electronics, and architectural. Expanding upon that, we've become known in the industry as the best performing technology in this area, and the most reliable. Our competitors have lost 95% or more of their market value. Another reason to think about where you want to deploy your investment if you're investing in smart glass. I think they're also helping us become known as the most financially viable player in the smart glass industry as well.
We also have the who's who of the glass, automotive, yachting, and aircraft industries involved with us as customers. It's not just our competitors that make us look good. We worked hard over the years to build and maintain credibility and establish ourselves as the industry leader. As I mentioned, we did this by paying attention to a lot of things, and we've done this through financial stability. We have cash for at least the next five years and no debt. This gives us plenty of the necessary resources, but we're smart enough to know that we wanna spend these resources efficiently. We have diversification of industries, a proven reliability for 12 years in the automotive industry. In our industry, that is quite a long time and very compelling data that everybody respects. Research Frontiers is well-positioned for a recessionary and inflationary environment.
We talked about that, I think two conference calls ago. I was drawing upon my background as an economist at the Federal Reserve Bank of New York, and having gone through both recession and high inflation when I was there, you saw what happens in the world and what you can do to navigate through that. I think that's been helpful for our company to have that perspective. We also have a healthy mix of business and government and commercial customers. Experience and respect and credibility and longevity as a company, which I think is good as far as how suppliers view us or as customers view us rather. We have good partnerships and a good business model with high rewards, predictable expenses, and low CapEx requirements. We're expanding our use into new applications like TVs, headlights, adaptive grilles, heads-up displays.
You've seen all of these happen very tangibly in the past year by some, you know, very well-respected companies. This year, I think you'll see more of this, but in different areas that can also address very large markets, like architectural glass. Look for us later this year to talk about exciting developments in areas such as impact-resistant, hurricane-resistant windows for the architectural market. Even the ability to retrofit existing buildings with SPD-SmartGlass so that installation is quick, with minimal disruption to building owners and tenants, and with lower costs. With that, I wanna thank everybody for participating on today's call, and I look forward to sharing more good news this year with all of you.
This concludes today's conference call. Thank you for attending, and have a pleasant day.