Research Frontiers Incorporated (NASDAQ:REFR) Q4 2025 Earnings Call Transcript

Research Frontiers Incorporated (NASDAQ:REFR) Q4 2025 Earnings Call Transcript March 5, 2026

Operator: Good afternoon, and welcome to Research Frontiers’ investor conference call to discuss the fourth quarter and year-end 2025 results of operations and recent developments. 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. Some statements today may contain forward-looking information identified by words such as expect, anticipate and forecast. These reflect the current beliefs and actual results may differ materially from those expressed due to various risk factors, including those detailed in our SEC filings.

Research Frontiers assumes no obligation to update or revise these statements. [Operator Instructions] The call is being recorded and will be available for replay on Research Frontiers website at smartglass.com for the next 90 days. [Operator Instructions] I would now like to turn the conference over to Joe Harary, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.

Joseph Harary: Thank you, Paul, and thank you, everyone, for joining us for our year-end and fourth quarter 2025 Conference Call. 2025 was a year of not just incremental developments but structural adjustments in the supply chain and meaningful expansion in our automotive pipeline, architectural retrofit execution and new product development and capital positioning. This call is important because when you step back and look at 2024 and 2025 together, the trajectory of this becomes clearer. We have maintained production continuity in automotive through license transitions, expanded OEM engagement with high unit volume vehicle programs, allowing cost reductions by our licensees and expanded engagement through other areas of the vehicle besides just the sunroof.

We’ve seen Ferrari expand production of cards with SPD-SmartGlass and Cadillac enter the market with SPD. We’ve seen Mercedes showcase SPD broadly in a concept vehicle and launched architectural retrofit initiatives. We’ve seen advancement in the Black SPD development. We’ve strengthened our balance sheet. And our licensees, and I think this is important, are making new investments that are specific to SPD business, and they’re moving forward and winning new business. We’re going to talk about that later. I’ll begin with financial results and our recent financing and then address Gauzy directly and then transition to the significant positive developments that have occurred since our last conference call. For the full year 2025 and continuing in 2026, we remain debt-free.

We strengthened our working capital. Our royalties improved when adjusted for onetime licensee events early in the year. And let me now just address our February financing directly because we’ve gotten some questions about it. And keep in mind, I’m trying to save time by answering as many questions as possible. And I have basically taken questions that have been given to us and included many of them in my presentation. So hopefully, that will allow us to efficiently cover a lot of ground because there’s a lot of good things to talk about. As we disclosed in our February 18, 2026 Form 8-K, we completed an oversubscribed $1.1 million private placement at $1 per share with 5-year warrants that are at increasing exercise prices. This offering included credit investors, several family members of one of our directors and also importantly, the owner of one of our SPD licensees, and I think even more significant, the one responsible for the SPD architectural retrofit application.

And we all believe that the retrofit represents a potentially very significant market. So when the licensee closes to execution of this invests its own capital alongside long-term shareholders, I think that speaks clearly about their confidence in that opportunity. And let me clarify something that I addressed in prior calls. I had stated that we would not need to raise capital if we were paid what we were owed and if we did not experience additional disruptions and there were several in 2025. And I also said we might raise capital for strategic reasons. In 2025, all of these elements were present. We experienced AGP related developments, Gauzy’s French subsidiary rehabilitation process and slower collection of certain receivables some of which are now being collected as we speak.

At the same time, we saw expanding opportunities in automotive programs, architectural retrofit, black SPD development as well as new product opportunities. Given that combination, we believed that it was prudent to modestly reinforce the balance sheet. We deliberately kept the offering small and focused and was done at a market price. Participants were long-term holders who, other than our licensee had participated in prior friends and family offerings, including our last one in September 2022. The shares were not registered for resale and are subject to at least a 6-month holding period. We entered 2026 with strength in liquidity and no debt and resources to execute on our business. I know a lot of people have been frustrated by the silence that has been coming out of our licensee Gauzy.

So let me now address Gauzy directly. In mid-November, Gauzy’s French subsidiaries entered into a court supervised rehabilitation proceeding in France. This applies specifically to the French entities. It does not apply to Gauzy’s German SPD film production facility. It does not apply to SPD emulsion production in Israel. However, as one would expect through most business organizations, this filing has had some ripple effects. Liquidity has been reallocated by Gauzy to satisfy the French rehabilitation monitors. That allocation appears to have temporarily reduced access to liquidity in other areas of the company, and Gauzy is actively working to address this. Senior management time and attention is understandably at Gauzy been focused on stabilizing and addressing these matters.

In addition, Gauzy reduced headcount. And let me just say that sometimes workforce reductions are never easy, but by adjusting expenses and overhead, it can strengthen the long-term sustainability of the company. These actions by Gauzy appear aimed at lowering operating expenses, reducing capital requirements and moving toward a more stable operating profile for Gauzy. And even in the midst of all of this, SPD emulsion production in Israel and SPD film production in Germany continues. In the midst of this, automotive and architectural development programs continue and expand. Gauzy is reconstituting its Board to restore its NASDAQ compliance. They postponed their third quarter 2025 conference call due to the timing of the French filing. But I think it’s important to understand that as a foreign issuer, they are required to file financials only semiannually.

And as a foreign issuer, their third quarter filing was purely voluntary and their annual filing is not due until the end of April. So they’re on a bit of different as you see reporting schedule than we are as a U.S. reporting company. From our standpoint, we remain in regular contact with them almost daily, production inside and outside of France continues. Program execution continues and progress on multiple fronts continues even during these restructuring efforts by Gauzy and we’ll talk about some of those things a little later on in the call. So now let me move from the discussion about stabilization to the acceleration of our business. While restructuring efforts were underway, development did not pause. Since our November call, expansion has accelerated.

Ferrari continues to produce vehicles utilizing SPD-SmartGlass. And even though license supplier AGP and their European affiliate, Soliver, both filed for bankruptcy protection in 2025. This had a 6-figure impact on recorded royalties for us during 2025. But we successfully transitioned the Ferrari business to another licensee, Isoclima and even though this transition occurred midyear, Isoclima sales levels exceeded their minimum annual royalty thresholds in the third and fourth quarter of 2025. Maintaining continuity through a supply chain shift requires execution even when one has is zig and zag, and we had to do that. So initially, AGP asked that we transition the Ferrari business to their sister company, Soliver in Belgium. And when some of the key suppliers, not SPD, but just in general, for automotive glass pulled their support they moved it back to their production in Peru, and then that didn’t survive, so we had to shift it over to Isoclima.

But I think that while that was certainly challenging for everybody, we successfully emerged. And I think it illustrates pretty clearly the strength and the robustness of our supply chain. Moving from Ferrari to Cadillac, they also entered the market with SPD-SmartGlass and the Cadillac Celestiq this year. And the Celestiq is General Motors’ flagship ultra luxury vehicle. And it has garnered great industry and press accolades with a strong and positive focus on the 4 quadrant SPD smart roof. It represents adoption by a major U.S. OEM or first, and also validates SPD in a next-generation engineered platform for General Motors. We believe this will result in substantial additional business for us. And it’s certainly significant that SPD-SmartGlass was chosen and introduced in European ultra performance and American ultra luxury vehicles.

Mercedes also recently unveiled a concept vehicle featuring SPD integrated across much of the car, not just the roof. I think it was 75% of the surface area of the glass. As those familiar with the automotive industry understand, concept vehicles often signal direction. They reflect where engineering resources are being allocated and based upon feedback where marketing resources are deployed and what makes it into ultimately new vehicles. Let’s reflect, since our November 2025 conference call, I was the keynote speaker at the Automotive Glazing Summit in Detroit. We now have high-volume quotations on 4 models of automotive — in the automotive sector. Since our last conference call, we have also started work with a new European OEM. And in addition to those models, which can represent hundreds of thousands of units, we also have specialty programs with potential annual volumes in the tens of thousands of units that recently came on board since the last conference call.

The automotive pipeline today is broader than at any point in our history. We’ll talk a little bit now about some of the new products and technical advances. SPD Black continues to advance and OEMs have made clear their preference for glazing applications that require a neutral or black aesthetic. Black SPD addresses that requirement and broadens the market. We are also advancing new SPD film variants, optical refinements, IR and UV integration, improved manufacturing and yield and broader access to key ancillary technologies to make a super smart window. These are adoption enabling refinements driven by OEM feedback. And of course, we listen carefully to the customer writing the checks. Moving now to the architectural market. Since our last conference call, we and our licensee, AIT, also known as LTI Smart Glass launched the retrofit architectural SPD product at Glass Build America in Orlando.

We have identified 4 initial retrofit projects of different sizes. Each highlights a different advantage of the SPD retrofit system, which is why they were selected. In multiple cases, removing exterior glazing would be disruptive or costly. To give an example, in 1 case, the building is a historically designated building. That project initially specified Sage electrochromic glass, but because Sage and their electrochromics required exteriors removal and replacement and something that was actually restricted because of the historical designation, the project pivoted from electrochromic to SPD retrofit. Instead of replacing the facade, SPD upgrades performance from inside the existing frame. Why is this significant? The installed base of buildings globally is vastly larger than annual new construction.

And the SPD retrofit system dramatically expands our addressable market and compressors manufacturing and installation time without requiring facade replacement or structural or occupant disruption. It could stay in the building while they do it. Other projects in the retrofit market also span residential and commercial buildings as well as government installations. And since our product launched last quarter, we are focusing on developing some new and innovative ancillary systems and peripherals for the retrofit application.

Joseph Harary: With that, I look forward to answering your questions, and we’ll first include some of the questions previously sent in by our shareholders in — so first, without pulling any punches, here are the additional questions we received that were e-mailed to us. And in some cases, I’m combining several related questions into one. And also, we covered some of these topics earlier, but I thought it would be helpful to you to hear some of the questions and for me to go into more detail. Joe, how concerned are you about Gauzy’s French rehabilitation proceeding? What happens if things deteriorate further? Well, that’s a fair question. And by the way, all indications are that they’re not going to deteriorate further. They’re actually improving from where I sit.

First, it’s important to separate the French subsidiary proceedings from the broader organization. The rehabilitation process applies specifically and only to Gauzy’s French subsidiaries. It does not apply to the German SPD some production outside of Stuttgart or the SPD emulsion production operations in Israel. SPD film production in Germany continues and SPD emulsion production in Israel continues. Automotive and architectural development programs continue. Market development and new business development for SPD continues. And yes, the French filing required liquidity allocation and management attention. And yes, Gauzy reduced headcount as a part of the restructuring. But restructuring when done properly, can be very — a very healthy change that strengthens the company.

And we, of course, remain in regular contact with Gauzy and from our standpoint, we see operational continuity and SPD production and program execution. I’m going to take another question that’s related to that. Do I have a contingency plan of Gauzy does not perform? The answer, Michael, is yes. We do. We have a plan A, B, C and D. My preference is not to have to use any of those. Another question from Mr. Erdman. What can you say about the war? Well, war is bad. And if I had to say what was the most disruptive thing to our business. We have some key technical developments that are on the verge of happening within Gauzy and we have some key meetings with companies outside of Israel that are going to be scheduled for this month or early next month.

And really the limiting factor on both was when are they going to open up the Israeli airspace. Right now it’s closed. I heard today, I think it was that they’re reopening it on Sunday. In some cases, people outside of Israel at Gauzy had to take claims to other countries, then trains and buses, including a 6-hour bus ride to get home. They’re very able to operate in these environments where that happens. So kudos to them for the strength and determination to do that. I got another question. Can you provide a postmortem why we didn’t get a business on — and there’s a couple of car models mentioned. This is from Jared. I’m going to talk about three of them that are on the list. The only one I’m not talking about is Mercedes, and that’s because of some active discussions going on.

But one of them was VW. Why don’t we get the VW business or the Rivian business, which is somewhat related since they kind of share a lot of the platforms together. VW initially, with the Porsche Taycan went with a PDLC product. And I don’t know why they did. So I can’t answer the question, why didn’t we get the business? I’m sure that they were told some things about the performance and reliability of PDLC as was these other companies. It’s probably interesting to note that they took the PDLC out of the out of the Taycan. So sometimes what’s promised isn’t always delivered. And the question also said, what about in particularly Corvette? I know the reason it has nothing to do with performance. And as many people on the call may know a company that is a well-known supplier of other products to Corvette asked to supply an electrochromic sunroof.

It was announced with a lot of fanfare in August of this year by Corvette, there was some good press accolades. And then they realized that they couldn’t produce it in scale, and they took it off the configuration list. Another question I got — and this is from John Nelson. Is there a possibility that SPD can be used on Corvette roofs as a replacement for the sad option that GM offered earlier in 2025? Well, thank you for calling it a sad option. I don’t want to disparate anybody, but I’m just reading literally the questions. So thank you, John. Not that I disagree, by the way. Yes. A matter of fact, I think our chances are much higher as a result of what happened there. I think people realize that what we’ve accomplished in automotive is unprecedented.

We’re in 4 different OEMs. That means 4 different quality assurance requirements, 4 different supply chain preferences and we were successfully introduced in series production in all of them. So it’s something that I highlighted at the Detroit Automotive Glazing Summit that I was the keynote and Chairman of. But I think now it’s becoming crystal clear to a lot of the OEMs, how hard that is to do it, what we and our licensees did and what it means to have a reliable supply chain like we have. Let me go back to some other questions. Do we see stabilization efforts underway at Gauzy? Yes, not only that, but continued execution across all their active programs. And they’re making progress and they’re fixing what are mostly entirely cash flow issues caused by the French bankruptcy.

I think once that’s done, everything comes together again nicely. And like I said earlier, we’re in very close contact almost daily with them. And we’ve been trying to help them navigate as best we can through some of these issues, and they’re very receptive to that. It’s another tough question. When do you expect meaningful revenue growth from these automotive programs? And in general, what gives you confidence that 2026 and beyond will be better? Well, thank you for that. Let me start. Not as an excuse but an observation, automotive integration takes time. You’re talking about vehicles that have thousands and thousands parts and purchasing decisions and a lot of that has to be coordinated. Fortunately, we have a couple of things going on.

Number one, even though these things take time, we started them a while ago. So they’re very much well under way. And also another thing that’s extremely helpful, and I think every day becomes clear to the OEMs, our SPD technology has been validated across 4 OEMs. And in the auto industry, that’s unprecedented, and we have even more OEMs in aircraft. So I think that, that reliability and continuity and maturity of the technology, I think, has been very helpful. But bottom line is the seeds have been planted, getting back to the question, and they’ve been nourished and now you’re seeing them begin to grow. And really, what matters and why I think this year is going to be different and this is going to continue is the breadth of our pipeline and the engagement of engineering that we have.

Today, we have Ferrari and McLaren models in production, we have Cadillac newly entered into production with some legs basically within General Motors, some of which I alluded to earlier. Mercedes showcasing SPD broadly in a concept platform, 4 high-volume quotations allowing us to get our costs down meaningfully. Additional new European OEM programs and specialty programs with tens of thousands of unit potential. And also, I think what’s helpful is the new SPD related investment by our licensees. So that breadth is broader than at any point in our history. And that’s why I think 2026 and beyond will be different. And as programs move from quotation to production, revenue follows, but not before, not in the automotive industry and not with a licensing model.

So we focus on execution and integration, getting it into cars reliably. And then for revenue for us and for our licensees, that follows integration. And that’s what we’ve been doing. It’s very simple. Next question. Ferrari’s low volume, Cadillac is ultra low volume, isn’t this still a niche technology? Well, Ferrari and Cadillac and prior to the Mercedes and McLaren all validated performance of SPD technology and the ability of our supply chain to reliably produce for serial production. I might add, produce for serial production across 4 different OEMs with 4 different requirements and 4 different production processes and 4 different procurement processes, we did it. What matters now is expansion. And we have 4 high-volume quotations in the automotive industry.

We also have specialty programs in the tens of thousands of unit range. And we also have broader glazing integration discussions beyond just sunroofs. So the pipeline today is about scalability and not just halo vehicles, it’s about cost and it’s about performance. And we’ve always had great performance, but the scalability and the costs are things that we’re now showing people we can do. Another tough question, also automotive related. If this technology is so compelling, why hasn’t a major OEM adopted across all vehicles already? Well, from your mouth to God’s ears that it happens, then it might, and I’ll give you an example of why that might happen. But automotive adoption is very model specific, at least in the beginning and very platform-specific.

OEMs integrate technology based on cost targets, future positioning and design cycles and also what their competition is doing. But we’re now seeing broader glazing discussions beyond just sunroof panels, and that represents platform expansion. And a useful historical analogy is antilock brakes. That began as a very expensive item, I mean a fairly significant percentage of the car. But Mercedes took a risk on that one. And even though it was very expensive, and they put in first and high-end vehicles, it eventually became standard across the industry. And as many of you know, we have very good relations with Mercedes, and we speak to them often. And we have pretty much an insider’s viewpoint on how they think about things. And I asked the guy that developed the S-Class.

And of course, I met him in connection with our work on the SLK and the SL and then the Maybach and the S class. And we had a lot of discussions. And I said to them and I said, Hans, did you have ready regrets about a decision you made? He goes, well, not about SPD, but I did have one regret. We had developed a dynamic shock absorber system that would take the 6 cameras in a car and feed the data into dynamically changing the shock absorbers on the car. And we wanted to call it either Magic Carpet Ride or Magic Glide Control. It made the car really, really smooth to drive. And one day, Dieter Zetsche walked into my office and said, BMW wants to license it from us. And the regret I made as I said, no, because had I said yes, that would have gotten the cost of that down.

And if I got the cost of it down by licensing BMW, so that the unit volumes for our supplier were much higher than it would have gone to other carmakers, too. And then it would have been in every one of our cars. So Magic Ride Control would have been in everything at Mercedes, and we’d have a better performing vehicle. So the thinking is and this happens more than I thought it would, that OEMs do share technology. And when they don’t, they regret it sometimes. So in our case, adoption, I think, across every model within an OEM will happen when we address 2 things that we spoke about earlier. Cost and color. We have already discussed the significant progress we made in both of these key areas. Next question, which I asked myself today because I’m an investor is, why should investors be patient?

Well, first of all, it’s a little easier for me to be patient because I have more information as you’d expect, as to what’s going on and what’s in the pipeline. But I think if you look at this even from an outside viewpoint, investors should be patient because the infrastructure has already been built. We have invested over $125 million in SPD and its markets. That’s done. Because these major investments have been made and validated by significant customers, I think that’s another reason to be patient. And diversification has increased. Diversification across multiple OEMs, diversification across now you’re beginning to see different places in a car where this could be used, and you’ll see more of that. I think we should be patient because production continuity has been maintained.

I’ll mention it very briefly because people sometimes say, well, why do you talk about the competition? I pay attention to the competition. We’ve had several competitors go bankrupt. The most recent, which you may not be aware of, was eyrise, which is the company that makes architectural liquid crystal. Not PDLC, liquid crystals. So sometimes, when you see something that looks like SPD, it was the eyrise product in an architectural application or they ended up liquidating. And that was within the last month or so. So it’s a tough industry. But I think by being smarter, and not that I’m the smarter one, but just setting up a business that was smarter. We’ve been able to have that production continuity that no one else has had. New OEM programs have opened.

Another reason to be patient because those things are seeds that have been planted that will sprout. The architectural retrofit greatly expands the addressable market. These are all structural developments. And durable growth follows those structural expansions, those foundations that we build. So we’ve also set the table for lower cost and higher revenues, all without requiring large capital expenditures or erosion of profit margins at Research Frontiers. So we’ve built strong foundations in their we’re green from them. And I think that’s why investors should be patient. We’ve discussed a lot of exciting topics so far today, and I’ll now ask our operator, Paul, so please open up the conference to any additional questions people participating today might have had that have not already been covered.

And just one caveat. We have covered a lot of ground. The call was running a little bit long because there’s a lot of exciting things that we wanted to talk about and share with you. So if we’ve not fully answered any of your questions, but they’ve been substantially answered, e-mail us rather than ask it on the call because we want to leave time for as many other questions as possible. So Paul, if you can open up the Q&A for live questions, I’d appreciate it.

Q&A Session

Operator: [Operator Instructions] And our first question comes from Jeff Harvey an investor.

Unknown Attendee: So Gauzy announced a $50 million funding proposal. That obviously hasn’t gone forward. At least I haven’t seen anything to indicate that the funding has been in place. So that’s a little disturbing. The other thing is that……

Joseph Harary: Having — yes, let me address that first because having cut my teeth on corporate transactions as a lawyer and also as the CEO of Research Frontiers. It’s not that it hasn’t gone forward, but equity credit lines require a registration statement we filed with the SEC and they go effective. Due to kind of the timing of the year, I believe that Gauzy would have to actually have their audited financials in place in order for them to file that registration statement. So I think — but I think it’s also probably important and I don’t think I’m revealing anything that I shouldn’t about Gauzy’s funding plans. But that’s more of an intermediate funding plan. They don’t need that much money to execute on their business plan and move it forward.

And they have access to more immediate, shorter-term capital. That’s meant to take care of some of the debt that they have with a particular lender at a higher interest rate. And it’s nice to reduce your interest expense. We don’t have any debt, so we don’t have any interest expense. But they’re a different company, so they do. Anyway, I didn’t mean to cut you off. I just wanted to address the question while it’s fresh. I think you had another question or comment.

Unknown Attendee: Yes. Two other things. First of all, the stock has been under $1 for — I would think getting to a point where they’re going to get another letter from the SEC about getting delisted being under $1, but I also….

Joseph Harary: You’re talking about Gauzy stock. You’re talking about Gauzy stock.

Unknown Attendee: Correct. So I think that’s — and the other thing is I would think that they’re not going to be able to pay you on time the way you’d like to be paid until they get their financial house in order. So I would think that your expectations of getting royalty revenue from them, again, are going to be subdued near the near term. And I also…..

Joseph Harary: Let me address that while it’s fresh. Okay. I’m sorry if it’s related. I want to make sure I answer all your questions, Jeff.

Unknown Attendee: I would think also that potential customers would be reluctant to want to do business with Gauzy given their financial distress.

Joseph Harary: Right. They’re all excellent observations. Let me maybe put some color on it because like I said, I’ve been in very close contact with Gauzy throughout this process since pretty much the day after the filing, the bankruptcy filing. So the first question is, are we going to get paid? And the answer is yes. They have stressed to the French — remember, we get our funding from 2 sources from Gauzy. Vision Systems, which is in France. Now that’s directly under the control of the French regulators. And it’s more of a monitor to basically just like internally, we have a list of bills that we had to pay, and my office manager presents it to me as CFO and CEO, and I approve it and our audit committee looks at it and it gets approved and then we pay it.

What you’re doing is you’re adding 1 level on top of that, but it’s a bureaucratic level, which is a French bureaucratic official that also has to do that. So it could slow down the process. Our invoices have been submitted. I’m told. No guarantee, but I’m told that it typically takes the regulators 1 to 2 weeks to approve something like that. So we’re in the queue. As far as post filing things, that’s a little smoother because really what they do is they treat prefiling obligations a little bit differently than they do post filings. And November 13 was the prefiling — was the filing date. So anything that existed, which is about half of our receivables from Gauzy, and from Vision Systems rather, is subject to the French regulator. And the other half is ongoing in the queue for payment.

As far as your other question, and it’s an excellent observation, are they experiencing any customer concern about their finances? And Jeff, that was the first question I asked them too. Is anybody concerned about your viability or — said, no, Joe, they’re not. We are — I mean, I’m more focused on SPD film and emulsion obviously. But company-wide, I think when you consider that the flow of revenue and product sales is coming out of France and it’s coming out of everywhere else in the world, the customers are continuing to buy. And these are — some of these are very long-term lucrative contracts that Gauzy has. So because they’re long term, the customer has to buy from them and they have to supply and the challenge is, do you have the liquidity to supply what’s a very large backlog of orders.

And part of this I mean, I’ll tell you 2 things. Number 1 is, the backlog — Gauzy was on track to meet their projections for 2025 until the labor unions initiated this reorganization or rehabilitation proceeding. Then everything stopped because all of a sudden, you have to go through the monitor process to get paid if you’re a supplier and it’s not just us, it’s people that are supplying glass and plastic film and cameras and everything else that they use in their systems. So it’s very important to get that restarted quickly, especially since the backlog was tens of millions of dollars of product sales that were profitable. So Gauzy, I think, did what they needed to do, which is they reallocated some capital and some liquidity from other areas of their company to get that flowing quickly because those have longer lead times.

And of course, you have the steady-state stuff for research frontiers and other licensees with the SPD emulsion and film. And I’ll tell you, yesterday, I was speaking to the CTO of Gauzy and they’re producing emulsion. It’s ready to go. And they get it over to Germany. Probably after Sunday, it will be a lot easier when they open up the air space. But prior to the word they were getting it too. So it’s not — it’s a little bit of a blip. But obviously, you want to see blips as possible. At some point, I imagine, given what Israel has gone through with 2 wars in May when I was there on 7 different fronts. And now this war with Iran, they may very well move a lot more of their emulsion production over to Germany so that — and their people so that you have less concern about air spaces opening and closing.

But I think we’re on the tail end of that kind of disruption. So I think we’re good.

Operator: And our next question comes from Mike Forrester, an investor.

Unknown Attendee: My question arises out of the third quarter report of Research Frontiers. And in light of everything you’ve said about how positive our whole situation is. It leads me to wonder why do we have a capitalization in January at basically $1 a share plus opportunities to buy more stock at $1.10 a share with a selective group of investors, including family members of a director when at the end of the third quarter report, it said we currently expect to have sufficient working capital for more than the next 5 years of operations. End of quote. So how do you justify that?

Joseph Harary: Sure. Michael, thank you for bringing that up, and I appreciate the question. So as I mentioned earlier, there was a qualifier on that, which is assuming we get paid what we’re owed and assume there’s no more supply disruptions because we had one in the second quarter with AGP, as you know. And also for strategic reasons. And what I said earlier in the call, I’m not sure if you were on it, is all three of those factors were present here. Now you asked about directors participating or their family members participating. That was basically the terms were set not with the directors, obviously, they were set with the large investors, the anchor investors that were much larger investors in this offering. And then we were asked, “Hey, why don’t you have a director participation in this?” And I said, “Guys, we already circulated our 10-K internally.” No company in the world would allow a director to buy stock once that happens.

We’re closing on this deal. If there’s people who know that want to participate on these terms, which have already been set, they’re welcome to come into this. And I’ll say this to any shareholder out there. Where do these friends and family investors come from? A lot of them had amassed large positions in Research Frontiers and wanted more. And because they have large positions, they would call me throughout the year, throughout the years, I got to know them. Most of the people in this round had invested in the last round, which was in September of 2022. So I knew them there. And they had invested in the prior rounds and the prior rounds and the prior rounds. So these are long-term shareholders. And maybe just to kind of put a color on this, if anybody out there is interested in participating in one of these things, assuming we have to do one again, maybe it’s a couple of years before we do it or maybe it’s sooner if isn’t an acquisition we want to make or a marketing program we want to launch or something like that.

Let me know when we’re talking, I’m happy to put your name on a list, and we could always figure out if it makes sense for you. But it’s not meant to exclude anyone. But these are people that we know and trust. And just to put a little more color on it, in September 2022, the stock that everyone got had a restrictive legend, meaning you cannot sell it in the open market as long as this legend is on the stock certificate. And even though they could have taken that certificate legend off 6 months after the September 2022 offering, nobody in that offering did. So these are long-term holders. And we appreciate that because that’s how you get rewarded with a company like this, which has relatively long development cycles with customers in automotive and an aircraft, I think everyone that works in that industry kind of knows about the development cycles.

But that’s why we did it, and that’s why we did it with the people we did. And if anyone is interested, love to hear from you. I can’t promise you we’re going to do this again. But if we do, and things make sense, we certainly would consider you.

Unknown Attendee: Well, it’s not just with respect to there being recapitalization, although the third quarter report does mention an expectation that there wouldn’t — this wouldn’t happen for 5 years. But…….

Joseph Harary: But if you listen to the conference call…..

Unknown Attendee: Hang on.

Joseph Harary: Okay. I’m sorry. I didn’t mean to interrupt you.

Unknown Attendee: Well, it’s the timing. I mean you’re giving us all this glowing information about how Gauzy’s situation isn’t as bad as the press, so to speak, present it to be. And I’d love to believe that because I have stock in Gauzy as well. But they just filed the bankruptcy or thrown into bankruptcy in mid-November, and here it is January, less than 3 months later that with Research Frontiers’ stock plummeting just as Gauzy is plummeting, the offer is at $1 a share. When you talk about ’22, I think it was like $2.30 a share and with better warrant rewards for those who reward to the company in terms of the total income. I question the timing, why not wait at least until May. We had at least 12 months before — according to the latest quarterly report that we have cash and cash equivalents to take us at least 12 months. While this timing is like you’re giving a gift to people who may not need that gift. .

Joseph Harary: I’m not giving a gift to anyone. This is an investment. But I will say this. Listen to what I said, please. If we were paid what we were owed, and we didn’t have any supply disruptions. Two things that didn’t happen, by the way. We did that — we weren’t paid what we were owed and we’d have supply disruptions, okay? And if we had a strategic reason, we would do another one. So here we are in March. We have something sitting at a French regulators desk hoping that it gets paid today versus tomorrow. And I don’t think anybody on this call would want Research Frontiers to not have the liquidity to execute on our business plan. So I’m thinking about the long-term shareholders and the execution of the business plan and capitalizing on the successes we’ve had in multiple markets and something no one else has done.

And I’m not going to sit there and roll the dice with your money or my money and hope that I get paid on time or hope that there’s no more supply disruptions. You wouldn’t want a CEO of your company being that reckless.

Unknown Attendee: One last question then for you. In light of what you’re predicting is when you get the money and so on. Are you going to put out a press release of how things are going so that we might know?

Joseph Harary: Yes. We typically don’t put out press releases unless there’s a specific event like the launch of the Celestiq was a specific event or a major nonfinancial development, but the financial developments are on a cadence of being announced quarterly. And our next quarterly conference call is in the beginning of May. It’s not that far off the way that the SEC filing schedule falls, early May is when we typically have our first quarter call. You might see it then.

Unknown Attendee: So by then, we should know whether or not Research Frontiers has got its licensing fees from the bankruptcy monitor, right?

Joseph Harary: Yes. Yes. I think you’ll see a change in our receivables when that happens and in our cash position. And that’s not too far off. So financial results, we don’t announce in between quarters, but it’s close enough where you’ll know about it soon enough, I think.

Operator: And our next question comes from John Nelson, an Investor.

John Nelson: Joe, just a couple of quick questions. You mentioned 4 projects with the retrofit window. Do you have — can you give us any idea as to how soon any of those could start? .

Joseph Harary: I think they — I mean, they’ve already started. I mentioned earlier that we’re working on some peripherals that go in conjunction with the retrofit window. The retrofit window is a very solid developed product. But now think about any kind of smart window. You’re going to want to have ways of controlling it in a smart manner that hopefully will be just as easy to install and integrate as the glasses. So that’s one of the things that we’re actively working on together. That’s LTI and Gauzy and Research Frontiers and the customers to give them a choice. So that’s basically what it is. And we’ve selected different types of projects because I view these not only as revenue sources. I’m not worried about revenue on this.

Revenue, when we decide that we’re going full force with this, and we have these peripherals all done. AIT has the capacity and the customer base to do this quite quickly without buying a Super Bowl ad or anything like that. But I also want to have white papers so that the architects could get their ideas as to, hey, why would I use this? In some cases, it’s obvious. I have building facility management, building envelope issue that I got to deal with. I need glass on the outer skin of the building, but what about things like one of the residents has, I think, 30 or 40 interior windows that to take out the glass and put this in, it’s a residential project would be very disruptive to the tenant and very expensive, whereas we could just pop it in and be done with it.

And so it’s a matter of creating proof points there.

John Nelson: Yes. Successful application will create awareness, more awareness……

Joseph Harary: And good news, John, I think — the good news, John, is that in the architectural market, we have a lot more control over that good news getting out more so than an automotive aircraft where you’re somewhat beholden to the OEM. Here, the architects and the homeowners like to brag about what’s in their home unless they’re rushing oligarchs or something that are trying to lay low. And we’ve had that happen, too.

John Nelson: Okay. And second question is, has Ferrari expressed any interest in expanding the SPD roofs to other models?

Joseph Harary: They have. I can’t talk about the specifics on that, but they make a lot of money on the [ option ], and they’re thrilled with the performance. I mean it has the performance of Ferrari. So what wouldn’t they like about it?

Operator: Our next question comes from Art Brady, Investor.

Art Brady: Basically, I’m interested in learning a lot more about what is happening with the GL project, the Korean company that concentrates on building kiosks?

Joseph Harary: I’m not going to talk about a specific project. And I don’t think, given that this has been an hour phone call, we should probably spend a lot of time on specifics. But Art, I know you try to reach me earlier in the week, and I typically don’t answer shareholder calls right before the SEC filing because I don’t want to get any shareholders in trouble, but feel free to call me tomorrow, and we could talk about that. And if you have — I know you’re a resourceful person, you might have some thoughts on that. I’d like to now maybe make some closing remarks. Look at the fact that Ferrari and McLaren have their production continuity going on in Cadillac entering the market and Mercedes integrating SPD broadly in a concept that covered 75% of the car, not just the sunroof and the expanding OEM quotations, high-volume quotations that helped us get the cost down significantly and Black SPD advancing and the architectural retrofit launching and the strengthening of the balance sheet and new investments by our licensees and SPD equipment, and in one case, a direct investment in research frontiers to the friends and family offering.

You don’t see a static company, you see a foundation that’s been built and a technology platform that’s being embedded in many of the different places. It’s being embedded across geographies worldwide. It’s being embedded across vehicle segments. It’s being embedded across applications. And the major investments have already been made and the infrastructure has been built. And we’ve always had the best performance of any SmartGlass technology, and SPD continues to deliver industry-leading performance. And cost and color are being addressed and diversification has increased. The breadth of engagement today is stronger than at any point in our history. And when you connect these developments together, you see a business that is no longer dependent on a single vehicle or a single OEM or a single customer in general or a single market.

And we believe all of this positions research printers for durable, diversified growth as these programs mature and enter the marketplace. With that, I want to thank everyone for their participation in the conference call today. If we haven’t answered your questions, feel free to e-mail me or call. We try to do the best we can to respond quickly. And I look forward to sharing more upticks with everyone.

Operator: This concludes today’s conference call. Thank you for attending.