Doc,
I will try to explain to you why REFR shareholders felt something was not right about the recent article on REFR. I will try to explain as much as I can in this post because I have no desire nor need to argue or discuss the merits of the short position. Everyone should do their own due diligence as I have done and draw whatever conclusions they have from that. Now about your question.
Why I and others objected to Mr. Lashinsky's article was that the article reflected the same misinformation being disseminated by a short seller who has a large position in REFR. The subsequent finding that the article had been circulated to hedge funds led many to suspect that perhaps a short seller in our stock was anxious for some outside help in order to cover his position and may have used Mr. Lashinsky for their own purposes and therefore omitted information that was key and highlighted information that was irrelevant i.e. MSC's or any other licensees' recent activity or lack of it has no bearing on other licensees. The pipeline of licensees is just that. Some will become active sooner than others. Some operate totally independently and others rely on one another for product development.
The press release from today that you cited must have been hastily put together since it contained such blatant errors such as saying that REFR " is the only smart glass company using SPD technology." You don't have to do much research to see that that is blatantly not true. First of all REFR isn't a "smart glass" company and second, Hanglas of Korea has had several recent announcements regarding commercialization.
biz.yahoo.com
Also the statement that SPD is "a 30-year old technology" is like dismissing electricity as a 100-year old technology. Truth of it is if you go back to the original discovery, SPD is actually over 76 years old! Land's patents did not work when Saxe took them over in 1965 and the first film wasn't even available until the early 1990's. Apparently the people doing the research don't understand how some technologies -xerox to name one - take time to perfect. REFR had the first licensee, Hanglas, announce commercialization in 1997. The past 4 years have been used to work with end-customers.We'd get progress reports. For example we know that Hanglas shipped SPD product samples to several car manufacturers and also other products.
Shouldn't these articles at least have acknowledged that Hanglas DID announce commercialization in a joint release with REFR on April 4 and 12 of this year? The Business Week article did. businessweek.com
I think that was a serious omission and therefore I believe that shareholders' suspicions are warranted, wouldn't you agree? That was what prompted my note. Hanglas has been working over the past 3 years to develop facilities and work with end-customers on several products. My friends have been speaking with them regularly (monthly) over the past three years. We've kept in close touch since the SPIE show where they first showed prototypes, through their building the SPD manufacturing facilities, through working on specs with end-customers to the present day announcements. They have now even designated an entire subsidiary for exclusive work on SPD products. biz.yahoo.com They also stated they "see a large demand" for these products and film.
biz.yahoo.com
They moved one of their key personnel to head the marketing effort for SPD Inc. His background speaks for itself.
Seong Man Kim, President of Hankuk Glass Industries' Flat Glass Division and a Director of SPD Inc., indicated that ``We now have in place the core management, technical and marketing teams necessary for SPD Inc.'s operations. During B.C. Lee's tenure at Hankuk Sekurit, it grew to supply more than half of domestic auto glass for approximately 2.3 million passenger cars, buses, trucks, subway cars, trains and construction vehicles. In addition to outstanding business development skills, B.C. Lee has considerable experience with technical and manufacturing matters and we are extremely pleased to have him join the SPD Inc. team and to have him continue to bring new and innovative products to our customers throughout the world. His background and experience is ideally suited for our marketing of SPD film and the many end-products we will be producing.''
biz.yahoo.com
They even established a separate link for SPD Inc on their website and in their vision statement talk about the development of SPD technology.
With 50 top-notch researchers working
in 20 division laboratories using around
300 kinds of state-of-the-art experimental
equipment, we are actively engaged in
research activities.
We have reached the level of developing
our own custom product. We have already
succeeded in commercializing
Marblite which is crystal glass for construction.
The development of SPD for construction and automobile
as the first in the world became the opportunity to prove
HanGlas superiority of accumulated technology.
With such successes, HanGlas will continue to excel in our
endeavor to make glass for the aid and benefit of our lives.
HanGlas fully supports the technology research institute so
it can lead the advanced glass industry in the 21st century
hanglas.co.kr
Also many don't seem to understand that our royalties come from end-products not film. If Hanglas sells $5 million of film it does not mean $500K in royalties. The aircraft windows for which Hanglas will supply film, will pay us $40-$120 per aircraft window (approx. 1.5 sq.ft of film) So you see things are not always what they appear to be on the surface. It is irresponsible not to do the research!
And those are the simple facts. The shorts did shoddy DD and now they want to spread misinformation to get out of their hole. SPD technology is being commercialized on several fronts as the company announced Thursday at their annual meeting and I quote:
Based upon projected timetables and sales goals of Research Frontiers' licensees for SPD film and end-products, the Company expects to earn royalties from sales of licensed products (payable under license agreements within 45 days after the end of the quarter in which sales of licensed products occur) early next year, achieve its first quarterly profit next year, and achieve its first full-year of profit in 2003, but possibly in 2002. Thereafter profits are expected to escalate rapidly.''
Most of us in the stock have large positions and have been accumulating over a number of years. My friends and family alone now own well over a 1/2 million shares and counting. We waited a long time for this day and we have kept in constant touch with the company and several licensees and are excited about Saxe's statements regarding future profitability. We have a very strong core investor base who understand the technology, the complexities involved in bringing products to fruition and the implications for future expansion into several new markets. |
