Joe Harary: No. I don’t. It’s a fair question, though. So let me delve a little bit deeper into that maybe give people some comfort on that. So Gauzy actually has locations throughout the world. It’s not just in one place. And they also have multiple locations even within Israel. So if God forbid something happened to their main facility in Tel Aviv-Yafo. And I’ve seen the Iron Dome work, and it works quite well. So it’s a low chance in a populated area like that of something striking. But even if it did, there’s a facility not 10 minutes away that things can be moved to. And then there’s also facilities in Germany and other places that can house. So they — unfortunately, the world they live in involves contingency planning that we don’t have to do in New York, at least thankfully, not right now. So it’s very much part of their strategic planning to be able to deal with situations like that. And another — sure.
Unidentified Analyst: Yes. On — you’ve talked about the reduction of costs. That’s primarily administrative or internal? And I…
Joe Harary: A Research Frontiers, yeah a Research Frontiers. The other focus on cost is at the end product side. And there, we’ve gotten the cost of the SPD film to a fraction of what it was in the beginning.
Unidentified Analyst: Well, I’ll preface my question with — I understand you have contracts with various licensees, and I presume — correct me if I’m wrong, that a typical provision is that the licensee gets the cheapest price that’s offered to any licensee now or in the future.
Joe Harary: No, no.
Unidentified Analyst: Okay.
Joe Harary: There’s no most favorite nations provisions. But with volume, you get discounts. And if somebody is developing a large use of SPD film, for example, they’ll get a better price, I’m sure, from Galsi than someone that’s doing a couple of windows.
Unidentified Analyst: Well, our return, as I understand it is typically 10%.
Joe Harary: 10% in automotive, 15% in the other markets of the revenue.
Unidentified Analyst: In that regard, if we offer 9.5% to a big buyer so that it increases the use of the product and gets other competitors of that buyer interested in competing. Has that been considered as a way of even though we lose some revenue in the year?
Joe Harary: It’s certainly been — yes, yes. No, it’s certainly — I mean, look — and that’s an excellent question. Maximizing revenue, because we get paid based on revenue is positive for Research Frontiers. So going from, let’s say, 10% to 9.5%, if there was huge volumes in a product that someone could commit to, is definitely something we’ve considered and discussed. The issue, though, is that for that to happen, the licensee has to commit to large volumes. And for that to happen, their automotive customer has to commit to large volumes. So they have to either make the standard equipment, then you know how much class you’re putting in a vehicle and how much of it is smart glass or commit to a certain make rate, so you know, once again, how much glass you’re putting.
Or the way it is now, it’s the customer deciding the configuration of what cars they want. And that’s less predictable for the automaker obviously and less predictable for the glass laminating licensee. So if someone’s willing to make a commitment, we certainly would consider a reduction if it was an impediment or if we can get more revenue out of it, because our costs are — fixed.
Unidentified Analyst: Last topic. I see that there’s — warrants were purchased. Can you tell us what the lowest cost price to purchase stock of Research Frontiers by a warrant holder?
Joe Harary: I’d have to look. I don’t have that number in front of me. It’s in our 10-Q though the weighted average and the exercise price of the warrants. Some go as high as $4, $5. Yes, some are exercisable at $4, $4.30, some are excisable at lower prices. No warrants repurchased though. I mean, there were some that were exercised in the first nine months of this year because they were in the money. And I think that was at $1.38, if I remember right, per share.
