Good afternoon, ladies and gentlemen. Welcome to the Research Frontiers Investor Conference Call to discuss the second quarter of 2023 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 opened for questions by pressing star one. This conference is being recorded today. A replay of the conference call will be available starting later today in the Investors section of Research Frontiers' website at www.smartglass.com and will be available for replay for the next 90 days. Please note that some of the comments made today may contain forward-looking information. The words expect, anticipate, plans, forecasts, and similar expressions are intended to identify forward-looking statements.
Statements that are not historical facts are forward-looking statements that are made pursuant to the Safe Harbor Provisions that are part of the Securities Litigation Reform Act of 1995. These statements reflect the company's current beliefs, and a number of important factors could cause actual results for future periods to differ materially from those expressed. Significant factors that could cause results to differ from those anticipated are described in our filings with the SEC. Research Frontiers undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. The company will be answering many of the questions that were emailed to it prior to the conference call, either in the 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 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.
Thank you, Jen, and welcome aboard. Hello, everyone, and welcome to our second quarter of 2023 investor conference call. First, I want to welcome Eyal Peso, the Chairman, CEO, and Co-Founder of our licensee and strategic investor, Gauzy Limited, to our board of directors. Eyal and I have worked together closely now for about six and a half years, since December 2016, and we share the vision of how smart glass can be done right. Gauzy has invested significant dollars, not only in Research Frontiers, but in factories and business development teams around the world, and cutting-edge R&D relating to SPD technology. They continue to break ever-increasing performance records set for themselves, and it is an honor and a pleasure to have Eyal Peso officially on our board of directors.
Turning to the numbers, we had good revenue growth in the first quarter of 2023. This growth continued in the second quarter of 2023. As noted in our Form 10-Q filed earlier this afternoon, total fee income for the second quarter of 2023 was up over 116% compared to the second quarter of 2022. Most of this was from even higher percentage growth in the automotive market as well as growth in the aircraft market. For the first half of 2023, revenue was also up compared to the first half of last year, once again driven by triple-digit % growth in the automotive and aircraft markets. We continue to drive down expenses.
Compared to the same period last year, expenses were down $131,000 for the first six months, ending June 30, 2023, and $118,000, or 14.3%, for the second quarter of 2023. Between higher revenues, lower expenses, and higher investment income, our net loss for the second quarter of 2023 was $0.01 per share, which is about $250,000, or 33.5% lower than the second quarter of 2022. For the first half of this year was $0.02 per share, which was about $414,000, or 30.2% lower than the same period of last year. Let's talk now a bit about some of the other developments since the last conference call.
In automotive, Ferrari's Purosangue are being delivered to customers with our SPD-SmartGlass roof, and we expect that deliveries of the SPD-SmartGlass roof for the Cadillac Celestiq will start in the 2nd half of this year. Looking towards our, looking towards our expectations for the future, more models are either specifying SPD or switching to us from other technologies. Also, since our last conference call, we made substantial progress on landing two new OEMs, and one of which has three models targeted for SPD. And while we can't always give specifics until the customer has spoken, I could give you some guidance as to places to look to give you a better idea of what's coming. Simply put, even if we can't say something directly, you can look to see what other people are saying and doing.
For example, if you look at the patent literature, a number of companies have filed patents for new and interesting innovations using our SPD materials for various applications, mostly in automotive. Looking elsewhere, sometimes you could find proud statements about their SPD projects on social media by people who work at these companies. Sometimes you can understand where a company is going and where they see their market and business opportunities by looking at how and where they are hiring. For example, Gauzy has about 70 job postings for new positions in key industries that we currently service. This is about double the positions they were hiring for just a short while ago. Let me also help you try to put some of the events that you might see in the near future in context, so you can understand their significance.
Research Frontiers and our licensees exhibit and speak at many industry conferences about the benefits of smart glass. Sometimes this has a very direct impact. For example, the Cadillac Celestiq came directly out of an automotive glass conference that I spoke at in Detroit several years ago. Based upon our discussions with GM, we expect multiple cars from General Motors to use our SPD-SmartGlass. These conferences also serve to educate the industry as to the benefits of smart glass and help them cut through the marketing clutter, claims, and other noise made by other technologies. This is beginning to bear fruit from us, for us. Some automakers that have selected other switchable technologies, and even put them into production, have now come to us and our licensees because of dissatisfaction with the performance and durability of these other technologies.
We became the gold standard through hard work and helping to educate the industry as to the differences in smart glass technologies. As we have noted many times on these conference calls, not all smart window technologies are created equal. These automakers are coming to us and their glass suppliers from a position of knowledge and with better context. Don't be surprised if the placeholders they have set with other switchable technologies ultimately get satisfied with SPD-SmartGlass. In addition to the 2 new automakers I referred to above, and their four different new car models targeted for SPD, in this latter category, another two to three automakers currently using other smart glass technologies are seriously considering switching to SPD. Why not? We have better performance and proven durability. Sales also continue to grow and expand to various models of aircraft.
Many of you saw announcements by our licensee, Vision Systems, that they are now supplying SPD electronically dimmable windows on two very large aircraft from Airbus, the ACJ 319neo with AMAC Aerospace and the ACJ TwoTwenty with Comlux. My closing remarks today will have some very exciting further developments in aerospace. Deployment of SPD on trains and boats continues, and for architectural applications as well. I took some of the questions previously sent in by our shareholders and incorporated them into my presentation. Let's take some additional questions. First question came from Jared Albert. This was in NY1. Extreme heat can reduce EV battery range by 31%, a study shows.
Jared mentions a 2019 study from the American Automobile Association found that EV range dropped 4% at 95 degrees, that's kind of timely with the heat wave going on here, without using air conditioning, and 17% when AC was running. Think about that. Your range drops 4% when it gets hotter and 17% when you have to turn on the air conditioning. Our Secretary of Energy actually was in an interview and started fanning herself because her staff had turned off the air conditioning to increase the driving range and combat the, you know, the speed up the charging of the car when they stopped for charging.
To help combat range loss, Recurrent, this is the AAA study, recommends pre-cooling your car while it's plugged in, as well as using sunshades or parking in the shade to help reduce heat. The initial cool down of a car takes more energy than maintaining it at a comfortable temperature, the study said. This is something we've been talking about for years. Most air conditioning systems are four to six times bigger than they need to be because of the need to make people comfortable. If you have an internal combustion engine vehicle, that's not such a big deal. You just run the air conditioning. When you get into an electric vehicle where you want more of the car's battery going towards driving it and less towards cooling it, we can reduce temperatures by about 18 degrees Fahrenheit.
Instead of getting in the car and it being 90 degrees, it's 72 before you even turn on the air conditioning. That initial cool down is actually done by our smart glass. Another question came from Mr. Claire Houghton. "Why is if SPD film is cost effective commercial and residential buildings, is SPD's film cost effective for commercial and residential buildings? If so, why is Research Frontiers not experiencing more revenue from that area?" To answer the question, it wasn't until recently that we had film that's available in 1.5-1.8 meter widths. Now that that's happened, I'm happy to say that Gauzy and their development team have landed some pretty big contracts for architectural, including some high visibility ones, which I'll mention again in my, in my closing remarks. Second question from Mr. Houghton.
The Lucid car has a large sunroof, and they're complaining about the interior heat. Is any of Research Frontiers' licensees approaching the OEM about SPD as a solution? Thanking you for your response. Well, thank you for your question, Mr. Houghton. To answer your question directly, yes, Research Frontiers, myself personally, actually, have had presentations with Lucid, our licensees have also worked with them. A lot of car makers are beginning to wake up to the fact that when they go to a panoramic roof system, where it's all glass, you need to have an effective way of cooling it, and sometimes they forget about it until a midyear, or a mid-model, problem arises when they get enough complaints.
I think you'll start to see more and more of that, where cars with large glass roof areas are going to need a switchable solution. Because we have the most effective heat reduction, I think that, you know, the trends are pretty favorable there. Mr. Nelson says, "Any new potential usage for SPD identified or exploring?" Well, one of the nice things about this business is that I look at Research Frontiers as actually having 250 patents on a basic material. It's sort of like if you had a patent on stainless steel or titanium. People figure out new and interesting uses for it. Even just this week, we've seen new uses for this in the automotive area that hadn't previously been done. Yes, the answer is yes.
There's constant work with new innovative activities. Of course, the bread and butter, like sunroofs and other areas of a car or a plane or a boat, or a building are out there. This question came from Mr. Albert: "You said that SPD pricing is 1/4 to 1/3 of when it started. Is that nominal or real, and is it Setra or SLK?" What he means by that reference is, are we going back to the 1990s with the first vehicle, which was the Setra luxury bus by Mercedes, or are we going to later on when Mercedes put this into series production in the SLK? The answer to your question is, I haven't calculated the real reduction in cost, but the nominal...
When you consider that most of that period, inflation was 2% or less, it really hasn't been that of a cumulative effect. It is the nominal reduction of what, you know, to one quarter to one third of where we started with the SLK. Yeah, a substantial reduction, and that's made this possible for even mid-level cars. You know, people keep asking me, are we still on target for the Asian car maker with a mid-level car? The answer is yes, as we've said in today's press release. What I'll do now is we've answered all of the questions that have come to us by email. I've incorporated them into my presentation.
I'd like to ask our operator, Jen, now to open up the conference to any additional questions, people participating today might have, that we haven't already covered.
Thank you. If you would like to ask a question, please press star one on your telephone keypad now. You'll be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you have a question, please press star 1 on your phone now. Our 1st question will come from Jeffrey Harvey, investor.
Hi, Joe.
Hey, Jeff.
I've asked you this before. I just wonder, Tecnoglass is a big installer of windows with different laminations. I just wonder, is that a company that Gauzy has approached, or is that a potential customer?
We both know them, you know, every glass laminator out there is a potential customer, but we know Tecnoglass very well. You know, as, as you could gather from maybe some of my earlier remarks, that the quality of knowledge about smart-glass technologies and what they can and can't do is definitely increasing. A lot of that is because of our efforts, you know, to educate people. You know, in some cases, PDLC is perfectly fine for privacy and an interior application, but when you start moving to the building envelope, the outside of the building, which is at least 10 times the size of the market, you know, people are realizing that you need something that actually can reduce heat and actually provide shading and not just light scattering.
you know, it's, it's nice to see that they're beginning to realize that there are these differences.
One other thing that I think, I, I don't know if you thought about this, but in, like, in the state of Maryland, you're allowed to, black out your side windows, which I think is very unsafe for a policeman. If you...
Right.
If they had an SPD on the side window, you could still block the sun, and yet the policeman could see inside the car.
Right.
I would think that there ought to be some effort to, I, obviously, cost is important, you know, compared to whatever film they put on cars now, is I'm sure, cheaper. But from a, you know, a police enforcement thing, I think that would be a great alternative to having blackout windows.
100% agreed, Jeff. As a, you know, as someone who cares about law enforcement, it's not the safety of the driver that they're worried about with window tint, it's the safety of the officers during traffic stops.
Exactly.
And, and we-
Exactly.
We've, we, we've learned, we've learned over the years, and I tell my kids and my grandkids this now, you know, if you're stopped, of course, be respectful. It's not the place to argue. Take your keys, put it on top of the roof so they know you're not going anywhere, and put both hands on the steering wheel. Be very respectful. You know, officer safety is very important, and I think that in a, in an age when you start having more and more side windows become switchable, you know, anybody that doesn't un-tint their windows when approached by a officer during a traffic stop, is going to get approached with maybe a hand on a gun and a lot of caution.
Yeah, that's what I'm asking.
and we could also. Yeah, we could also.
Side window.
Yeah. Yeah, there is, and I think you'll start to see that on side windows of cars. What you could do in Europe, you can do whatever you want behind the B-pillar, so it's not an issue there. The B-pillar is the area between the front and the rear of a car. In America, you can do whatever you want on a B-pillar and an SUV, which is more than half the vehicles on the road. We're really, you know, when you want to get into, you know, into the other areas, you're talking about, you know, 30%-40% of the vehicles that are not SUVs on the road.
You know, we've had discussions, and our licensees and their customers, more importantly, have had discussions about, you know, what should the regulations look like in a world of switchable glass, where you can now, you know, alleviate that safety concern. Thanks for the question, and it's something that we haven't really talked about in depth, you know, in the past, so I'm glad that you raised it.
Thank you.
Our next question will come from Leonard Blundo, investor.
Hey, Joe.
Hi, Len.
Good to be on the call again today. I think I just have a couple of questions here. Are there any real contracts, you know, with redo to windows on buildings that are there? Because now we know you don't have to put scaffolding and things outside, you can do it from the inside. With this heat wave we're having and everybody getting bent out of shape, it would seem like if there was anything there, we would be hearing about it relatively soon. That's question number one. Question-
The answer to that The answer, by the way, let me just take that, is that, there are architectural projects in the works that I think will become very visible and, you know, very nice for SPD, and they use a lot of glass. I'm sorry, your second question?
The second question is, now that, you know, you're cutting expenses and things are perking up, and there's other people looking at putting it on, I think we're pretty close at the crossover point to actually becoming profitable by the end of this year. Is that a possibility?
Well, I don't want to put a timeframe on it because it, that never is a good idea. I, I appreciate the fact you recognize that we've done a lot of very continuous cost cutting. I mean, if you go back over the last seven years, almost every year has been lower expenses than the prior one. You know, as I mentioned earlier, our expenses were down fairly substantially again, this quarter and for the first half of this year.
Yeah, thank you.
The idea is exactly that. The idea is exactly that. We wanna basically hit profitability sooner, cash flow positive sooner. You know, if you look at, you know, that we've been very, very careful about how many shares that we've been issuing. We also want, you know, are planning for a day when, you know, the board of directors will declare a dividend to our shareholders so that we can reward shareholders without them having to ever sell any stock.
Well-
That's always been our goal. Yeah, that's, that's always been our goal, and, you know, we've been very careful to do that. Some of our competitors, and I promise people I wouldn't talk about it, have done, you know, 60 to one reverse stock splits because, you know, they would have over one billion shares outstanding right now. you know, we've always just felt that, you know, you'd be very prudent on how you spend money, make sure that every project makes economic sense so that you can, you, you know, we and our licensees can make money on this and achieve profitability sooner. That's always been our goal, and we've been sticking to our knitting and I think, you know, we're well on our way.
Thank you very much. We all appreciate that as stockholders.
Thanks, Len.
We'll hear next from John Stroebel, investor.
Hi, Joe.
Hey, John, how are you?
Good, thanks. I got two questions. The first is, a couple weeks ago, a political blogger changed it from global warming to global heating, a huge jump in the concept of the problems going on in the world. Last week, UN Secretary General António Guterres says it's no longer global warming, it's global boiling. Given what's happening in the last couple, three months everywhere in the world, it's, it's, you know, down in South America right now, it's, it's wintertime, and temperatures are in the hundreds. Is RFI Gauzy and our OEMs going to have a concerted effort to point out that SPD is a wonderful way to fight the effects of, of global warming on the individual? Of course, architecture would certainly be a very big part of that.
Yeah. Thanks, John, for the question. First of all, we're all in this industry because there's environmental benefits to using our technology. You know, one environmental benefit, of course, is that we can substantially reduce the heat inside a building or inside a vehicle. The other benefit is that we're reducing CO2 emissions, that's very important as well. If you look at, you know, the regulations in Europe, they have certain CO2 emission targets for auto manufacturers for their fleet of vehicles, and for every gram per kilometer that they go above that, they're gonna have a penalty of EUR 95 times the number of cars they sell in Europe. That's quite a bit of a penalty. We can reduce CO2 emissions by four grams per kilometer. That's a message that isn't just something recent.
We've been, you know, we've been talking about this at conferences for, for many years now because I think the data is very compelling. Yeah, I mean, you know, in an area also where you have high energy prices, conservation of energy becomes very, very important. In the Middle East, for example, you know, you have a lot of sun, a lot of glass, and you want to make sure that, you know, things are going as efficiently as possible.
Our next question will come from Francis Cutrupi, investor.
Good afternoon, Joe.
Hey, how are you?
Pretty good. On the previous call, you had mentioned something, you don't want to put a timestamp on profitability. Last conference call, you put a timestamp on shareholders getting rewarded in the year 2023.
We still-
The only two ways I could see that happening is share price appreciation or dividends. As of today, I don't see any of that happening. If it's to occur in the year 2023, this should happen within the next quarter, correct?
Well, we have, we have, five months left in 2023, but my point, I think, is, first of all, dividends, we're gonna consider declaring dividends when we have a comfortable cash position and, steady, revenue. I think that's just the prudent thing to do. I think, you know, having said that, you could probably, see our expectation that it's the share price appreciation that is the way that we hope, shareholders are rewarded this year. You know, as things become more visible and as people, you know, understand, you know, the progress that has been made, not only by us and our licensees, but by the industry itself in understanding the differences between different smart window technologies, I think you're gonna start to see, you know, we rise to the top.
We still have an expectation, and we've, and we've always operated the company for the benefit of shareholders.
The only way I could see that occurring is, is if there were major announcements made.
I can never predict. Yeah, I, I can never predict what is gonna move a market. In our history, we've had minor announcements that moved our stock a lot and major announcements that didn't. The only thing I know how to do is focus on our business. Everything else will take care of itself.
Okay, thanks.
Thanks a lot.
As a reminder, if you'd like to ask a question, you may signal by pressing star 1 on your telephone keypad now. We'll move to our next question from Jared Albert, investor.
Hi, Joe.
Hey, Jared.
I had a, a single question. It's kind of a, an orientation question. So let me, let me just set the, set the stage for the question, which is, back in 2008 at the annual meeting, you identified sunroofs getting bigger, which turned out to be a good prediction. The goal was to get SPD into those systems to get the price down. Then it went into Mercedes-Benz, it proved it worked. Then it came out of Mercedes-Benz. The thinking was that it was price and just kind of a difficulty with Hitachi, Ltd. Now, and then Gauzy came on board. It's taken them, you know, kind of whatever their timeframe was, but they've been able to pass the OEM level testing that Ferrari requires.
This is maybe 2,000 cars a year with fairly, I'm guessing, fairly wide margins, but probably given the experience with light, with light-tuning, they probably really wanted it to work. They didn't want to go through that again, so.
Right.
Now, so that, so that's the stage we're at now, as far as I can tell. We know that the EV9 was shown in the investor presentation last March with side windows that were called smart glass. We know Hyundai is an investor in Gauzy, and we know that the Celestiq is coming out at the end of the year, presumably, and I assume it's Gauzy's SPDs. My question is, having kind of been in this thing through three waves of production, you know, for through, through film waves, I'm not going back to the Nippon Chemical boardroom in 1988. I'm talking about film production where it could be put on rolls and shipped. You haven't mentioned Hyundai, and I, I am concerned because the Grandeur was gonna be, like, the big model, and maybe you don't want to mention it.
The point is, is are we now at the stage where SPD is gonna go into cars, and we're gonna see a revenue ramp, or are we still kind of stabbing around in the dark, where we can only get into these super high-end vehicles, and despite price reductions and everything else, there's some other issue, there's some optical clarity issue, there's some adhesion issue, there's something else? What I have seen is the backdrop to this has now been driven by high-temperature PDLC. They have been able to come in with these systems that survive on horizontal surfaces and just penetrate this market all the way down to cars that are in the thirties. We've seen the Ambilight product.
Now, granted, that hasn't yet shipped outside of China and Vietnam, but ZEEKR is going to start selling a product in England this year, and I don't know if that roof system is on there or not. The point is, if they're starting to sell it in markets outside of China, they have a competitive product at this point. That's my open-ended question. You know, PDLC may be the pioneers with arrows in their backs, and they have opened the idea up to switchable glazing for the mass market. It seems like now is the opportunity to come in with a better product at a reasonable cost. You know, View has crashed and burned. They, they totally distorted the pricing market. I assume SPD is still too expensive for architectural, but the idea was to go into-
It's not.
mass production, get the price down. Okay, so but that's my question.
Yeah.
Now-
Yeah, and actually, Okay, I did, you know, I did in our press release today, and I think earlier talked about an Asian manufacturer, and I think that, you know, that's about as far as I can go at this point. It's always. I did mention that you have to let the customer go first, but take a look at what's going on around you, and I think it's pretty clear. I think your, your question, though, sets up a really great scenario here, which is, there is a greater awareness of switchables. People have tried cheaper PDLC. Yeah, it could survive, perhaps, although, you know, our experience in automotive testing is, you really, it's a very, very vigorous environment, and they may think it's surviving.
The fact that some of the people that are putting these in, and I think this is maybe an interesting takeaway, if you think back to what I said earlier in the call, there's 2 to 3 manufacturers that are using a different switchable technology that are actively and seriously considering switching. You have to ask your question, the question: Why would they be doing that? I think the answer is, whatever it is that they're being promised, whether it's cost or durability or performance, it's just not happening. Then you have us, where costs have come down. We've talked about it, and your question is an excellent one that you emailed in. You have performance that has been proven, and you have adoption that's been expanding, and I don't really think PDLC has made great inroads.
I mean, they, they got into some visible vehicles, but not in high volume. The fact that these vehicles are considering changing tells me a lot of what I need to know. Yeah, I, I think you set the, the, the table right, that this is a, a nice time in our history because there is great awareness, there is a great need. There have been some mistakes made by competitive technologies and by automakers using it, and they're beginning to realize it and starting to remedy it, and that's where we come in. As I said earlier...
Yeah.
Don't be surprised if, if the placeholder is the other technology, and the way you satisfy it is SPD.
Let me ask you just to follow up. If in 2 years, we're listening to these kinds of conference calls and we've switched seats, would it be time to get out? Because it's clear that for whatever reason, we're just not getting the adoption that we need, given the incredible tailwinds that switchable glazing is experiencing in sunroofs right now.
I expect two things to happen in the next two years. I think there is going to be a shakeout in the industry. Some people that are here now are not going to be here even six months from now. There is going to be a shakeout in technologies, because as the limitations of certain technologies become better known, and sometimes it's by trial and, you know, under trial and error, people stop putting that in. I think Ferrari is a great example of this. Ferrari had a uncertain electrochromic roof years ago, and it was a disaster for the Superamerica. Now Ferrari has an SPD roof. Mercedes had a PDLC roof years ago, and they switched to SPD.
Well, now they have a couple-
They have nothing. There's still sales going on of, of MAGIC SKY CONTROL, but it, it's mostly out there in existing vehicles. You know, what you have is a constant education. On the one hand, you can have technologies that are being tried now, that are going to be proven not to be good. You know, I-- if you go on the Ambilight website, for example, and I'm not going, you know, to trash them because there's no real data on that site. If you go on their website and look at the samples that they're showing, these very small samples of Ambilight, and look how dark they get, that's not going to move anybody's needle in terms of heat rejection or light rejection or glare control.
Yeah, nobody is working.
If it were-.
-on Ambilight that I am. I mean, they, they could turn it to 11, and it would, it would be basically like roofer at a very light setting. No, I, I understand all that, and yet they're selling, they're selling all over China. Okay. I mean, that was, that was my question, you know, to-
Yeah.
at this point, at this point
In 2 years.
Finally, in 2 years.
Yeah, in 2 years, I think that you're going to see some major changes in the industry. I think also you're going to see, some of the strong players get even stronger and stronger. When that happens, you know, Katie, bar the door, as Bob Saxe used to say.
All right. Okay.
Thank you.
You know. All right. Thanks, Jeff.
It's, it's a fair question. Thank you.
I think we'll move next to Art Brady, investor.
Hi, Joe. Art Brady here.
Hey, Art.
In the past, at certain of the annual meetings, you used to have a display by Lincoln, on the Lincoln cars, and I'm wondering what the status is. We never hear a word about Lincoln. Are we still talking to them, or is there some, something-
We, we are. We are, we're talking to their parent, we're talking to their competitors in the U.S. too. You know, I think that with every car manufacturer, there's a continuum of when things get introduced and where they put it. Just like Mercedes put it on the SLK first, because that was the car that was ready, that needed it first, even though the S-Class would have been a more logical first choice for them, right? You have to look at kind of a whole panoply of, of reasons why a manufacturer put something in or not. In Lincoln's case, we were very honored to be put in the Continental when they were trying to rebrand it.
They just, you know, for whatever reason, and I don't want to go into more detail, weren't able to get their act together in terms of series production. I, I don't think it was because of us at the time. That doesn't mean that, you know, things haven't vastly improved, where it's, you know, much easier now to get this into a vehicle. Because if you think about it, you know, back then, you had one manufacturer that had it in series production. Now you have at least three laminators that are doing it. Actually, four. You know, it's, it's much easier to get this into series production, SPD that is, now that you have, you know, four major players that have experience in cracking the code on getting SPD into series production.
Any timeframe as to when we could hear some kind of an announcement from that group?
Not that I could share.
That's ongoing?
Remember, it's up to the customer to speak first, and sometimes, you know, they'll allow us to say things on social media, but not in press releases. Sometimes they'll allow you to say something on a conference call, but not in a press release. You know, they have their reasons, and we respect them.
There is some communication continuing?
Yes, there is. Very recent, as a matter of fact.
Another question that I have is, it's so hot all over the world that your phone should be ringing constantly in, in that regard. If we can't show some very tangible results with this kind of an environment, I don't know when we would have a better opportunity.
Well, I think. Yeah, I appreciate the question, Art. I think, you know, it's not only our phone that's ringing off the hook, it's our licensees too. That's good. Remember, they have a lot of phones there because all of our key licensees have expanded dramatically, their business development and customer service teams. Yeah, remember I said, look, look at where people are hiring, okay? Look at the regions of the world. Look at the industries they're hiring for. You'll see a pretty clear picture of where things are going. Yeah, you know, I did mention car makers that are, you know, additional car makers that are coming on board with multiple models, in some cases, for SPD. I mentioned an architectural initiative that is bearing fruit. All these things are happening.
Okay. Thank you.
Thanks a lot, Art.
Once again, if you'd like to ask a question, please signal by pressing star 1 at this time. We'll move to our next question from August Berman, investor.
Good afternoon, Joe.
Hey, Dr. Berman, how are you?
I'm good.
I, I, I know I always get a laugh out of you when I say that, because you're, you're an impressive, but, but I know personally modest person, and I know that I, I could get a reaction out of you when I do that.
Love it. Love it. Appreciate it. Just a couple questions from me. First things first. I know a couple of conference calls, ago, there was a mention of an aftermarket uncertain . Is that still something about in twenty...?
Yeah, you're... The audio broke up a little bit, I think your question is, it's still coming out, the answer is yes. That's something that we're very excited about because it totally transforms the way that smart glass is delivered to a building. You don't have to put up scaffolding. You don't have to get landlord approval. Just a whole panoply of benefits from doing that. Also it gives you this very big market, because a lot of the government buildings have initiatives to increase their energy efficiency, they have monolithic glass. It's not even laminated glass anymore. If you can, you know, tap into that market and create a super energy efficient window, you know, the government, you know, being on the GSA schedule is a, is a huge, huge market.
Okay. I'm sorry, you said that was, it's going to be coming out in 2023, 2024? Or is that something we're, we're kind of looking at in the future?
We haven't, we haven't put a timeframe on it. I don't see any showstoppers and why it couldn't come out tomorrow if it needed to. You know, and I think that we're all, we're all pushing for that, because I think we all understand that in the architectural market, it's a game changer.
Yep. Okay, you had referenced that, I think you mentioned GM versus Cadillac. We're interested in, in bringing additional models off of this last week. Is there, is there a period of time where Cadillac wants to see or GM wants to see technology first before introducing it to another vehicle? The reason I ask is just because I have kind of my, my sights set on the Escalade IQ coming out next week, in terms of a vehicle that seems to fit the price point, and, it would be, it would be an awesome function to have. Anything you can, you can in terms of timing?
It would be an awesome function for the Escalade. It probably will be an awesome function in the Escalade. It probably won't be next week when it comes out. You know, I think you start getting penetration on different SUVs out there, because remember, SUVs have a lot of glass, and you also have more flexibility because the requirements on an SUV are different than on a passenger car. You know, it's a little bit more relaxed in terms of tints on mostly side windows in the back and things like that as well. Yeah, I mean, look, we're gonna. We're not stopping with what we have, let me put it to you that way.
Okay, great. That's it. Thanks, Joe.
Thanks. Take care.
Our next question comes from Tom S., investor.
Yeah. Hi, Joe, are you there?
Hi, I'm here.
Hi. Hi, Joe. Yeah, you mentioned the expected Asian car, at least one, maybe more than one, last conference call, this conference call. Can you speak to if that's an EV, a gasoline, and is it mid-priced? I know you're not releasing what car it is. I, I think you'd be able to share something on that.
It has a mid-price, and it has a luxury edition. In terms of ICE versus EV, you know, I think it could be on both, depending on how the, how it sells. Not, not our feature, but the, you know, the drivetrain itself.
When you say it could be on both, but not our feature, you're saying not SPD on that?
No, no, I said... No, no, no, no. What I'm saying is, thanks for clarifying. No, what I, what I meant to say, and I apologize if I wasn't clear-
Sure
... is it can be on both, both an ICE and an EV, okay? There's no reason why it could be on one and not the other. Whether they choose to introduce it on both is really a business decision on how the cars, you know, the ICE versus the EV is selling for that for that model. It has nothing to do it has nothing to do with SPD being better or not. It's, it's good for both.
Okay.
You know, on an ICE. Yeah, yeah.
It's nothing you could say it's definitely gonna be one or the other, it could be both. When you say expected, you're confident it's gonna be a mid-priced Asian car, well, one or the other, or, or you're just not sure at this point, or?
I'm confident it's gonna be a mid-priced Asian car. I think that, it's up to the manufacturer, and they may not even decided yet what the blend is between EV and ICE on that vehicle.
Okay, it sounds like-
You know, I can't-
you're saying it, it's gonna be at least one, either ICE or EV, could be both. That's what's expected.
It's gonna be... Yeah, I'm, I'm confident it's gonna be on the vehicle. The question is, what are they gonna put out first? You know, I don't know that.
Yeah.
They don't know it either.
It, and, and then well, thinking for timeframe, the models are being released in what? September. Do you have an idea on, on Novemb- O- October? Any idea on timeframe when we might hear anything?
Not that I could share. Not that I could share, I'm sorry.
We'll go on from history when cars are released, what are we looking at for months usually, you know, from your past experience, anything?
Every, every, every, every car maker has a different kind of introduction schedule. It used to be a little bit more rigid, so you knew, for example, when Mercedes-Benz was doing their mid, mid-model changes and things like that, now it's pretty much across the board. I think one of the things that kind of changed this a little bit was, you know, the Tesla Model S is still the Tesla Model S, and what they've said is, you know, "If we have an improvement that we wanna put in that vehicle, and it's ready today, we'll put it in today. If it's ready next month, we'll put it in next month, and if it's ready next year, we'll put it in next year." So they've kind of, you know, changed the way that automakers think about upgrades on the vehicle to be almost like a-
Yeah
... continuous improvement, which I think is a good thing. I think it's a good thing that, you know, I mean, the marketing guys may like the fact that they had more predictability as to when new features were coming out, you know, if you're selling a car. I think that for the consumer, you want the car that you go to the, you know, dealership to buy to be the best it can be at any given time.
Yeah. Last couple things on this. The word, wording is expected. Can you give, like, a, a idea on confidence level? Are you talking 99% or 80% also? You think an option or maybe a trim package? I know you probably say you don't know, but anything you could share on these two questions?
You kind of have a continuum here also. Something can be, quote, "an option," but be on 80%-90% of the cars. For example, sunroofs are on over 80% of premium cars. It's an option usually. Why? Because the car makers make more money on options than they make on standard equipment, right?
Yeah.
So-
that's, that's.
So it has nothing, it has nothing to do with what you'd expect, kind of an economic decision to be made. It's more like, what is the car maker gonna make more money on?
Then the other one, last one, qualifying the, the expected. Can you get into that a little bit? We're talking 99% or 60%? Do you have any thoughts on how confident that level is?
I'm very confident. You know, I've seen things that look like they were certain to happen, and the Continental, for example, was a very good example of something that, I mean, you had the CEO of Ford going on, you know, CNBC, and talking about our smart glass roof as a key feature of the car. It didn't make it into production.
Yeah.
You could be 100%. I mean, you know, to the outside observer, if I saw that, I saw Mark Fields say on, on TV, "Hey, this is the greatest thing since sliced bread, and we're really excited about it," and then it doesn't make it into production. You know, you're never 100% certain about anything.
But, but-
Yeah. Yeah.
With that.
I'm sorry, go ahead.
That's all right. With that said, it sounds like you're, you're pretty confident, either 90% or something in that realm of confidence?
I'm very, very, very, very, how's that? Four verys, without putting a number on it, confident.
Yeah. Okay. Well, thank you for your taking the questions.
Sure. My pleasure. Thanks for asking it.
Bye-bye. Thank you.
Your next question comes from Arnold Cornblatt, investor. Mr. Cornblatt, your line is open. We're not able to hear you, sir. If you have a mute function, can you check to see if that's engaged? Just a reminder, if you'd like to ask a question, please signal by pressing star one. Mr. Harary, it appears there are no further questions. I'll turn the call back to you for any additional or closing remarks.
Okay. First of all, as a reminder, look, if we didn't get a chance to get to your question, or if you feel we haven't fully answered it, feel free to call or email us. We're happy to do the best we can to make sure that everyone gets their questions answered. A couple of closing remarks. First of all, as you can tell from the lead into this, it's been a very exciting year for us. Part of that excitement is the success we've had that people know about, and part of that excitement is what's coming. Let's talk about what's coming. What will the future bring? Certainly continued penetration in our two largest markets, automotive and aircraft. You know, it's something that we have very good visibility on.
The way that this progress is happening is also very important to understand. In automotive, we know about McLaren, Ferrari, Cadillac, and the Asian automaker coming out with SPD panoramic roofs in their vehicles. In addition to them, today, I also mentioned two new automakers besides them and their 4 car models, as well as a reasonable expectation in another two to three au tomakers currently seriously consider switching from an alternative switchable glass technology to SPD. We're clearly seeing the benefits of switchable technology being better understood by the automakers. We're also seeing that they're getting more aware of the strengths and the limitations of different switchable technologies.
As the best performing smart glass technology with proven durability, in a very stringent requirement that it be on the heat collecting roof of a car, this will help us continue to win more business in the future in automotive. Another item, some pretty exciting architectural projects with high visibility are in the works. The way that decisions are being made, it's evolving for our benefit as well. We spoke about more educated decision makers. The other thing to understand is the locus of that decision making is also changing for our benefit. For example, in some industries, the manufacturers call the shots. However, in others, it's the customer who makes the decisions, if the manufacturer allows them the free will to do so.
What you want to do is you want to make sure that the customer is able to make a decision, because if you see SPD compared to anything else out there, and I'm not just bragging, it's what we've been told. There's no comparison. Letting the customer decide what they want is important. In an area where, where the customer makes the decision, but heretofore it's been the manufacturer that might be preventing that from happening clearly. One good example of that is the airline industry. When you start to see airlines themselves, and not just the manufacturers, decide on aircraft contents and configurations, you'll understand the important sea change that has already occurred. Stay tuned for a little while longer here.
There's approximately 150 airlines out there, and they're competing with each other, using the passenger experience primarily to win the business and to distinguish themselves from others. Research Frontiers, our licensees, and most importantly, our investors, will all benefit from all of this. I look forward to sharing these developments with you, and thank you all for your support and encouragement.
This concludes today's conference call. Thank you for attending.