Concise REFR Research

REFR currently operates in four main industries using their SPD-Smart Technology; automotive, aircraft, architectural, and marine.

The company recently reported 2012 results which included: Fee income increased from $846,000 in fiscal year 2011 to just under $2 million in fiscal year 2012, representing an absolute increase of $1.1 million year-over-year, and a relative increase of 131%. 84% of REFR’s fee income is attributed to the automotive industry. This is positive because our catalyst for an increase in stock price is the May 15th launch of the 2014 Mercedes S-Class that should have REFR Smart Glass as an option.

REFR has $13.4 million in cash, enough to fund their current operations for the next five years. This is positive because there is little need to issue new shares to raise capital so share dilution is not a risk for a short term investor. Remember we are only holding this for a month or two.

Institutional ownership of REFR increased from 8% to 20% and as more institutional investors become attracted to the company, more analysts are starting to follow the company. Currently two analysts rate the company as a BUY. Kevin Douglas, the guy that bought a 20% stake in IMAX when nobody believed in the company is also heavily buying shares of REFR, supposedly owning over 12% of all shares outstanding and still buying. http://www.valuewalk.com/2012/02/kevin-douglas-the-greatest-unknown-investor/

Question: Why has REFR’s stock price been dropping?

Seth Van Voorhees - Chief Financial Officer and Vice President, Business Development 

Obviously, this is a hard question, we can’t control the stock price, it is the market that does that. I can tell you that we are – we are disappointed in the recent stock price performance with declines. We are disappointed for a number of reasons, most of the management have significant personal stakes in this company. In last year, we reported as in aggregate management and directors own approximately 15% to 16% of the stock in this company which is both a significant personal as well as professional investment. So, we believe strongly in the value of this company and very much want to see strong stock price performance from both a personal and professional basis. I think the best thing that we can do is get to a breakeven and profitable basis and we hope to do that as quickly as we can. And until then, we are going to continue to try to do everything that we can to make Research Frontiers an attractive investment whether it’s – we were talking about improving liquidity, improving transparency and communication with our investors and getting our message out to potential new investors as well.

Questions to Joseph Harary- CEO:

Does REFR expect additional announcements concerning additional luxury vehicle models?

Joseph Harary: Yes.

Am I still optimistic from our October 12th presentation that SPD will be in another production vehicle behind the SL and SLK by July 1, 2013?

Joseph Harary: Yes.

Can we comment on recent articles that describe a special event being held in the automotive industry to launch a new S-Class and also comment on reports that the S-Class will use Research Frontiers’ SPD-SmartGlass technology?

Joseph Harary: I’m somewhat limited because we have NDAs in place with all the world’s major auto companies, so we can’t say anything definitive until they say something. However, I can say that the automotive press usually get things right and also this is because there is a good dialog between the automotive press and the automakers. And these articles are awesome, very incredible publications. And to those who have not read the articles, they are saying that the new S-Class is being launched on May 15th in Hamburg, Germany and that the new S-Class will be in showrooms this September and will offer Magic Sky Control as an option. So, while we can’t confirm this at this time, if this SPD SmartGlass did appear on the new S-Class, it would be a highly significant event for Research Frontiers.

Austin Malone- This was the REFR research I promised, sorry for the wait, in conclusion I like this CEO and I like REFR.  His answer to that last question almost made me laugh.  I mean he could not be anymore direct in telling investors that the Mercedes S-Class will incorporate REFR's Smart Glass Technology.  That is awesome.  This stock should run up in anticipation of this deal, right now the deal is really unknown so the stock has not moved much but as May 15th approaches investors will jump into this stock and the more than one million shares shorted should get squeezed.  Price target $6