Research Frontiers Incorporated (REFR) Earnings Call Transcript & Summary

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. [Operator Instructions] A replay of this conference call will be available starting later today in the Investors section of Research Frontiers website at www.smartglass.com and will be available for replay for the next 90 days. Please note that some of the comments made today may contain forward-looking information. The words expect, anticipate, plans, forecasts and similar expressions are intended to identify forward-looking statements. Statements that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions that are part of the Securities Litigation Reform Act of 1995. These statements reflect the company's current beliefs and a number of important factors could cause actual results for future periods to differ materially from those expressed. Significant factors that could cause results to differ from those anticipated are described in our filings with the SEC. Research Frontiers undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. The company will be answering many of the questions that were e-mailed to it prior to this conference call, either in their presentation or as part of the Q&A session at the end. In some cases, the company has responded directly to e-mail questions prior to this call or will do so afterwards in order to answer more questions of general interest to shareholders on this call. 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 1. 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, Paul, and hello, everyone, and welcome to our fourth quarter of 2022 and year-end investor conference call. I'm going to keep things more informal than usual today because I want to 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. Celestiq had their largest booth ever at CES this past January and moved into the prestigious Automotive Westhall. Major worldwide customers such as BOSS, LG Display, LST, Talgo and Continental joined them with various products, mostly for automotive, aircraft trains and boats, but also showing architectural applications. And that was just the first day the show. [indiscernible], the CEO of BMW and his opening keynote speech at CES, aided by Arnold Schwarzenegger in person; and David Hasselhoff remotely, showcase BMW's iVision. The car was equipped with its class all around being SPD smart glass. Also highlighted prominently in Oliver Zipse keynote and BMW's press releases was a head-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 that have been 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. AGB has visibly -- 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 Gent, Belgium, I visited it, and 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 has positioned itself to be somewhat recession-proof and certainly inflation proof. And that continues, and I guess it's been well that we have done that because those things seem to be lurking or here. We are also patient and because of that, we ultimately went 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. And this year, we expect another OEM that originally selected another switchable PIN technology to switch over to SPD. Usually, the OEM 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 projects -- products. And with that brief introduction and recap, I will now turn to some of the questions that we received by e-mail.

Tom had asked last conference call, you said that all indications are GM is growing 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 first by saying that General Motors has adopted SPD Smart less than their flagship electric, the Celeste. And they've announced continuously now their EV strategy, which is to really introduce a number of much higher volume EV vehicles 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 switch well on glass in general, automotive glass in general. And the head of GM's glass and roof systems attended my presentation and then attended the breakout session that I had hosted. And we spoke afterwards and about a year later, he told me that they had several car models that they had slated SPD 4 and asked my advice as to how to proceed with that. And of course, I gave it to them. And 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 it's a beautiful car. Another question, Tom had asked -- please talk more about Hyundai, the Magic Group as this was out on the Internet. I know you can't get too specific. And basically, I spent a lot of time on the last conference call speaking about Hyundai as a company and about the Grandeur, the GM 7 and some other vehicles that they have. What I'd like to do now is just focus on 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 going to save 4 grams per kilometer 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 going to get an estimated 5.5% increase in the driving range. And then, of course, you get the halo effect of having what's on Mercedes, McLaren, Cadillac and Ferrari. So those are the reasons that I think Hyundai is on a good path with that. Another question came from Chuck. You try just to use first names here just to deserve 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. And I've been asked you, Chuck, to hold that question because I will answer it in my closing remarks. But then the other question you had is about the Dynamic Glass Act itself. And certainly, that changes the dynamics for the better because it's offering a 30% to 50% tax credit for adoption of smart windows such as SPD. So 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. Well, one of the things that we wanted to make sure of is that it won't hinder other licensees from using improvements that develop over the years. So 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 Williams as the [indiscernible] with the focus on made in America brought about by the [indiscernible] -- are there any ramifications for Research Frontiers? We have a number of U.S.-based manufacturers. So to the extent that there's economic advantages for manufacturing in the U.S., our licensees all have operations here and also we have some licensees that are only in Americas. So 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? And then the view is in financial difficulty -- how does that affect you? Okay. Well, let me kind of take both questions. So one of the advantages of being in the licensing business is that we can afford to be nice to everybody in the electric vehicle industry. So we really don't have to pick and choose who we work with because quite frankly, nobody knows which EV makers are going to be successful and which ones aren't. There was even doubt years ago, whether Tesla was going to be able to make more than 10,000 or 20,000 cars a year. And they've got their act together quite nicely. We expect there to be shakeouts and understood in the business history. And you probably -- if you think back to the turn of the 20th century, there were so many carmakers, most didn't make it. So you want to 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. So the fact that we've proven ourselves both from a reliability standpoint, which is something that the existing carmaker certainly admire and respect has been very beneficial to us. So we have a long track record, and it's one that is a prestigious track record. And if the electric vehicle market ends up going to the established carmakers will do well if it goes to some newcomers will also benefit. As far as your question about view and their financial difficulty, they are not doing very well financially and we'll probably learn more on March 29 when they have the year-end conference call, which is pretty much the last minute. But they've been somewhat of a negative force for the entire architectural Smartglass industry. 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. So 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 in a real business. Another one comes from [indiscernible]. I recently came across his tech [ trancortical ] claiming that the passengers display portion of the CELESTIQ mega-screen will incorporate SPD privacy lines to minimize driver distraction is this fact or fiction? Well, you can't always read what reported will say, but I will say this. Some OEMs are working with SPD to minimize driver distraction. And for now, the only thing I'm sure of is that SPD Smartglass will be standard on the Celestiq roof, but we certainly have had broad discussions with GM about the benefits of SPD. So nothing there would surprise me on that. I think we answered most of those questions from John -- Robert, is Resonac previously known as Showa Denko and Hitachi Chemical and active licensee producing and selling SPD Film. Also 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. Yes, 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 putting it into 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, and they continue to sell film into late 2022. But we think that because this division is part of something that just kind of move from company to company to company, there's the possibility that they may reduce or wind down that business because of this. However, that should affect us because of [indiscernible] 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 Clare. Have recently saw an ad for an electric BMW that had a sender 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, but more often than you can imagine, and I kind of alluded to this before, the OEMs soon realized that other switchable glass technologies like DLC or electrocomic has problems. And as I mentioned, we're selling a new OEM this year for this very reason. So I think it's good that they're experimenting the things. And I think ultimately, when they do the high-volume production and they want the real stuff, they'll use SPD. And I also just want to Matt for his kind words about a dear friend who we lost Ron Rosato. Ron, was a longtime shareholder and broker and really with an amazing person and I've spoken to Ron many, many times, and I wish this fairly 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 e-mailed to us. So 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. And then afterwards, I'm going to make some closing remarks here.

[Operator Instructions] And our first question comes from Leonard Litzau from Wealth Planning and Design.

I'm doing well. 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 and a lot of large OEMs like to know who they're dealing with. And Dows has some very well-heeled investors such as Hyundai and others that I think 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. But we're also saying that it's beginning to thaw out and good companies like Gauzy, I think will do very, very well when they do go public. So I'm going to 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. So let me just limit my comments to that at this point.

A second question then. I know that they have increased the amount of emotion that they have been making that was announced almost a year ago.

Yes, the 5x increase in the capacity.

Has to be going in some place. So isn't that going to push us towards positive earnings per share relatively soon?

I'm delighted that they're making that investment that's going to benefit not only their investors, but our investors as well. And I can't say enough nice things about Gauzy. They really are an amazing company that really is doing smart glass the right way, and that's what originally attracted us to them is that we both share the same vision as to where this market can go if it was done right.

And 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 6 months, Lynn. So waiting is not top of my list of virtues. But on the other hand, I think it was very important that we and Gauzy does do things the right way. You don't want to have either bad starts or fall starts with a new technology. And I think that has proven to be a good approach for us. And when companies haven't done this, we've seen companies like view that really went into tremendous problems and some of them can end up filling the company. So I think you want to do it right and they're doing it right and they're making the investment to do it right and they're hiring people to do it right. And 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.

With the Glass Act having passed, I think the credits start hitting in January of '24. Is that still accurate? Or if they order now, do they get the benefit of the…

I think you have to put it in service by then. So you won't miss out if you do it in 2023.

That would be very good for us.

Yes, very much Joe.

And our next question comes from John Nelson, private investor.

I've got a couple of questions, but the first one is kind of a broken record question as far as any updates on the Sunviser?

Right. So that actually has started to incorporate itself into some vehicles already in a built-in sun visor and a lot of the test vehicles that we do, the concept vehicles that we do have that kind of concept already built into it and McLaren's case actually put it into the windshield itself. As far as the fold-down Sunviser, that's moving forward, but mostly targeting the aftermarket. And 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. And then the 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 -- and 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, but for the first time in our 10-K and in our press release today, I mentioned Ferrari. And I was really pleased that earlier this week, Ferrari started saying that cars are being delivered to customers. And actually, one of the Purosangue customers reached out to me indirectly to say how excited he was to get this smartglass in his car. It's between what we have with McLaren and what we have with Cadillac and what we have with Ferrari and what is coming out in Asia. And as I mentioned, it's not just one carmaker now, it's 2 over there that are unrelated to each other. I think a lot of people have assumed the Hyundai and Kia, I view those kind of as joined at the hip even though they're separate companies, but 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. So I think we're going to have a good year. The jump in revenues because a lot of these cars don't come out until towards the end of the year may happen in the third or fourth quarter. Okay. But yes, we're on a positive trajectory here.

And our next question comes from Michael Kay from Kay Associates.

I'll tell you, I've been a shareholder for over a well over 20 years and a very [indiscernible] the SPD in the company. But it's getting a little timing 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 quarter after quarter, the fee income really is pathetic. And 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 words I still can't understand why there aren't architectural firms, other car manufacturers. Many of these car manufacturers, it's many of them, it's just by concept cars. What about getting SPD into the lower price cost that you indicated would be the case, like [indiscernible] in the volume.

Yes. Well, every carmaker I mentioned is not a concept car this year. These are actual serial production cars. And I think people that are following the industry will look at a mid-level car manufacturer like Hyundai as being the potential to vastly increase the volumes. If you're a farmer and you plan crops, -- you can stare at the ground for a long time, but each crop takes a certain amount of time to grow. And we planted a lot of seeds. And this year, 3 or 4 of them have already started to grow. And 1 or 2 unexpected ones also came in that I think you'll hear about. So all good stuff. But I think here in my comment -- my closing comments, some things that you might find also useful with respect to all of the markets but also architectural.

Most companies want them to be more than one source a film. And you said that a taxi basically, most of the film production will be from Gauzy, we just signed previously, you said you were looking for a U.S.-based company that could manufacture the film. So is that still…

I never said U.S. based. What I said in the past is that you're looking for a second source and it's probably going to be co-located near their major customers. So that may be in Asia, maybe in South Korea and maybe in Europe, maybe in the United States depending on where the volumes are. But the licensees make those kind of decisions about where to put their production facilities. And I think that part of this also is that if you have competition among the glass laminators which we do, we have pretty much the so the glass industry, then you'll satisfy the diversity requirement that a lot of people in the automotive industry feel comfortable with.

What about --been any progress regarding displays and the values of SPD.

Yes. I think when you look at Panasonic, you should really look at who's supplying Panasonic and that's LG display, and we've spoken about that. They've got a very strong presence with SPD and their transparent OLED, which is a remarkable technology. I mean if you see it in action, it's mind boggling how good it is. And it certainly is an attention getter -- and typically, LG makes the displays for Panasonic and a number of other display manufacturers as well. So being very helpful for us.

Going with the block even 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 the number of trains. We're in Japanese trains. So pretty much around the world, you're seeing SPD adopted for trains and other transit. And I must say that having Vision Systems as a licensee that area has been extremely helpful because their focus from day 1 has been on trains and transit and buses and all of their other ancillary businesses, whether it's the safety tech business or their electronics business. They all focus on providing high-end solutions to those industries. So 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 performs in a way that correlates with people's confidence in the technology and your management.

Okay. And it could be worse. You could be involved with either view or Crown and move 95% of your value in the last year. But we're holding steady in a market that's very difficult. And we're in an industry that we seem to be the dominant player in now. So -- and whether we have competition or not, we're going to continue to do things the right way.

[Operator Instructions] And our next question comes from Gerard Sherman from Strategic Planning Group.

The question for you is just surrounding the revenue. And I was hoping you could kind of help me understand necessarily from a guidance standpoint, but what it's going to look like going forward, meaning that if we're in some planes and trains and dots and a few high-end cars that produce to very little numbers, and we're pulling in $130,000 in revenue. What does it look like if we get somebody that moves 50,000 cars a year or 100,000 cars a year Sounds like a price point, what does that look like from a revenue-wise for us?

Okay. Great. So first of all, let me just kind of back into the question a little bit. So revenue this year when you exclude onetime and special events and things like that, it was roughly the same as the prior year. And all of the cars that are coming out haven't been reflected yet in our revenue for 2023 yet. So because they're all coming out in 2022, they weren't in series production in 2022. If we took the original kind of estimates that we had when Mercedes was doing this, we were getting between $150 and $225 per car -- in revenue and royalties for that. Since then, fortunately, the price of the technology has come down quite a bit. And I'm thinking that probably a good estimate to use for your back of the envelope calculations would be anywhere from $75 to $150 for the car now in terms of royalty per car. So if you multiply that by someone putting in 50,000 cars, you'll see that, that could make us profitable.

Given the size of glass and in the ones, we're just looking at standard sunroof. Now the entire roof is glass, that doesn't improve the numbers for us.

It could in that you're dealing with a larger piece of glass. But 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. So if you're spending labor dollars to lay up a laminate piece of film, whether it's smart or not, that's going to cost you money, and it's -- it won't be as much on a larger piece of glass is a smaller one, but there will be some difference. But yes, it's certainly a benefit that some rigs are becoming bigger and bigger. So you get the panoramic roofs or the ones that go from the windshield all the way to the back of the car, like you see on the Model Y and some other vehicles. And what's good about those panoramic sunroofs that are basically all glass roofs is that the carmakers have realized sometimes after the car goes into production, which is another opportunity for us that you can't shade something that big with the traditional mechanical shade that pulls across, like you see on a typical sunroof. So you need something else that can shade it. Now in the beginning, they used heavily tented glass to do that. But if you're putting such a heavy tent as to manage the solar gain inside of the car, you might will just have a metal roof. So 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. So even with a normal [indiscernible] calculations years ago, a typical roof, if it went from a moving roof to a stationary roof that had smart 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 and saving the component 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. So we are not only more reliable because there's no moving parts in SPD sunroof, but we should also help save money for the carmaker. And then, of course, you get the other benefits, increased headroom, reducing the cabin temperature by 18 degrees Fahrenheit and other things like that.

So the slow adoption of it, you don't think has anything to do with it being too costly of an item because they're savings elsewhere -- take it forever to be adopted. And Tesla, how does Tesla not use it? It's stuck to these high-end cars, it's like, wow, I mean, no one is going to touch it. That's in a $50,000, $60,000 range.

If you look back 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. And I wouldn't be surprised if Tesla was one of those OEMs that also did that.

And our next question comes from Art Brady of Private Investor.

Can you comment on the AGP factory that was established? Was this built on exactly the same specs of the [indiscernible] that was built by Gauzy it's the long configuration.

It's a different type of factory, but it's a good question, Eric. So they do share one thing. They're both highly automated factories, so very low labor costs. The Gen factory in Belgium that AGP has is highly automated. I mean I walked through this thing, and we saw 3 engineers that were just looking at some monitors to make sure that everything was working okay. It was -- and 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 and also the consistency and the reliability of an automated system once you make the investment in automation is quite good payback because you're making a very expensive piece of blast, you want it to be good each time it comes out. And 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 cutting an emulsion on a moving web of ITO coated PET and then curing it with UV. And so it's a different process than what ATP is doing, which is taking that film that they would buy from Gauzy and putting it between 2 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 2 years ago, [indiscernible] with some of the gauzy people. And 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 going to 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'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. So yes, we all expect a very good payback from this investment that they're making all over the world.

Well, when do you think we could actually start seeing some revenue in that regard other.

Well, if you look at where 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 and they've put their emulsion production. So those are probably the best leading indicators I could give you as to where I think their business is going. And if they are, in fact, going public, they're not doing it based on having a met PDLC product, they're doing it based on an SPD product, and that's the strategy for growth at Gauzy too.

So I'd like to ask you about the train accidents. Does Gauzy or any of your groups have any types of products that they could sell to enhance the safety of trains and still the floor to track as they've been occurring pretty frequently.

Well, both Gauzy and Vision Systems have very sophisticated sensor systems, and I wouldn't be surprised if some of those things could be deployed. But if you think about the tragedy that happened in East Colistin, it was ball bearings that heated up. It's not anything to do with heat coming into the cabin or anything like that, that they do have electronic sensors that might have been helpful. But if you look at the tracks in the United States, they were a mess. So I think you have to fix the roads that these trains go on before you fix the trains.

I understand -- Yes. Are you a company close solar Window tech, -- 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. We like them. They're complementary technologies because 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're just popping into the side of the window. You didn't have to wire anything, and it would generate 20x more power than it needed to operate the Smart windows so you could charge your cell phone or other devices using solar energy. But there's a lot of companies like that are trying. Some are homegrown in the United States that we've spoken to, and they have promising technologies. And we keep track of them because we don't need a lot of power to run a smart window. So any of these photovoltaic, especially the transparent ones that don't typically generate a lot of energy still can generate enough energy to power a smart window and 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.

And our next question comes from Michael Forrester, Private Investor.

Jill, thanks for answering all the other questions. Since I'm the last in line, I think I've got enough information now. I think we have one more in the queue. I just joined…

We have a question from Tom [indiscernible], private investor.

Joe, first of all, I'd like to thank you for your efforts. I think you're really working hard towards the right things. It's talked with a new product, it's got to get into the market. But anyway, the EV9 in the Grandeur as you know, were mentioned with the Magic roof. It's not been mentioned lately, but it sounds like Honda Key is a possibility. The EV9 has been noted that it's going to come out with some 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, [indiscernible] 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 going to be first, and I'll tell you why. I think that if I was Hyundai, I would probably reserve to myself first, the good stuff before I gave it to my sister company Kia. But you never know what the internal politics are between that, but they're basically joined at the hip. And I think that the work that Hyundai is doing with SPD and they're a direct investor in Gauzy, which I think is important to know. I think we'll benefit Kia as well. I just don't think the EV9 will be first. Look, I could be wrong. I've been wrong about other vehicles that in trying to handicap which ones we're going to come out first.

So something as soon as this month you wouldn't be well aware of by this point?

I would think that it's -- it would be -- I don't think it's going to come out this month.

As far as the brand…

By the way, Tom, that doesn't mean that it won't come out on the EV 9. It just may not be -- it may be like a mid-model introduction or something like that.

Are you able to say BLS was working on the Grandeur sunroof and around about way because they're working with Gauzy not necessarily?

You're talking about a different company that we're very familiar with that is working on that project with plan.

[Operator Instructions] We have a question from Tom McCarthy from Raymond James Financial.

Joe, my question has already been answered.

And we do have one that just join the queue, and that's from Jeff Harvey, a private investor.

My question is related to TM Ford and Stellantis. I mean I know it takes a long time to get in the queue for the electric vehicles. I just wonder if you can give us an update on progress with the companies.

Sure. And I actually read your question federally answered it, but I will say this that in a nutshell, because of the track record we have with Mercedes and McLaren being in the other established automakers is actually a positive thing because they respect reliability more than anything else, and that's certainly what we've had in our DNA since 2010 with the other.

What about cost though? I mean, is cost a factor for these midrange inexpensive cars? Is that what's in the…

No, I wouldn't say that now because if you think about the expectation is that Hyundai is going to have this, and those are not very expensive cars. So I don't think cost is going to 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. So there's a lot of things that go into cost but also the basic cost of the smart glasses far lower now with the Gauzy film than it was with the Hitachi film. So that's also enabled a lot of things to happen. I will say this, just because I gave some time to your question earlier, why don't you hear the replay, if you still have any questions, feel free to call me on my cell phone. I'm happy to go through those. You're always welcome. You're a long-term friend, so I appreciate it.

Yes. And we have no further questions in queue. I'll turn the call back over to our hosts.

Okay. Thank you. So I'm just going to make a few closing remarks. Every day, we all probably wake up and we ask the same question, why would you invest in Research Frontiers? And 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, 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, 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. And we invite you to check the box of things that we've thought about in Tainted already. We have a strong and growing product pipeline. Mostly automotive but also trains, planes, boats, consumer electronics and architectural. Expanding on what we've -- 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. So I think they're also helping us become known as the most financially viable player in the smart glass industry as well. And we also have the host the glass, automotive, yachting and aircraft industries involved with us as customers. So 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. And 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 5 years of no debt. This gives us plenty of the necessary resources, but we're smart enough to know that we want to spend these resources efficiently. We have diversification of industries or proven reliability for 12 years in the automotive industry and 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, 2 conference calls ago, I was drawing upon my background as an economist at the Federal Reserve Bank in 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. And I think that's been helpful for our company to have that perspective. We also have a healthy mix of business in government and commercial customers and 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 do use rather. We have good partnerships, had a good business model with high rewards, predictable expenses and low CapEx requirements. And we're expanding our use into new applications like TVs, headlight, adaptive grills, heads-up displays. You've seen all of these happen very tangibly in the past year by some very well-respected companies. And this year, I think you'll see more of this, but in different areas that can also address very large markets like Architectural Glass. Later this year to talk about exciting developments in areas such as impact-resistant hurricane-resistant windows for the architectural market and even the ability to retrofit existing buildings with SPD Smart Glass so that installation is quick with minimal disruption to building owners and tenants and with lower costs. So with that, I want to 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.