Did you know that they're selling SPD in the former Soviet republics?
Well, no, they're not, actually, but REFR does have a licensee all set up to handle that burgeoning market for color-changing glass.
The licensee's name is Leminur Ltd., and, well, apart from what is contained in the press release about their licensing, that's about all anyone seems to know about them, or their two "directors" Vadim and Alexander Khromov. Their given email is from a free email and web hosting service, and yet despite the free access to the latter, they have yet to put up a web page.
Really, there's not a lot to say about this group, other than it stands as proof positive that REFR will license just about anyone, if it means being able to add to their licensee count.
Friday, April 08, 2005
Thursday, April 07, 2005
Those who will not learn from history...
Today I thought I'd webify a periodic posting that Bill Wexler makes on the SI and Yahoo boards. It's called "REFR's Uninterrupted History of Fraud" and is a pretty damning display of what REFR has said over the years, that has ultimately amounted to nothing.
REFR's uninterrupted history of fraud
1992: The REFR stock fraud announces an automotive deal
1993: The REFR stock fraud announces an automotive deal
1994: The REFR stock fraud announces an automotive deal
1995: "I am confident that products using SPD film technology will begin to appear in the near future."
1996: The REFR stock fraud announces an automotive deal
1997: RESEARCH FRONTIERS LICENSEE EXPECTS TO COMMERCIALIZE SPD PRODUCTS AND ESTABLISH NEW PRODUCTION FACILITIES NEXT YEAR
1998: REFR takes the year off, apparently.
1999: The REFR stock fraud announces an automotive deal
2000: "As a leading integrator of businesses and technologies within the $8 billion replacement window/door industry, we are very enthusiastic about the potential for SPD light control technology to enhance the value of our custom vinyl window products," commented Steve Hoffman, Chairman and Chief Executive Officer of ThermoView Industries, Inc.
2001: The REFR stock fraud announces an aviation deal
2001: The REFR stock fraud comments on short-selling, makes misleading statements about trading activity in REFR stock...and mentions itself and Qualcomm in the same breath, in a not-so-subtle and laughable implication that the fraudulent Research Frontiers can generate revenue from its worthless patents much the same way legitimate companies such as Qualcomm exploit their valuable intellectual property.
2002: "In his address to shareholders, Robert L. Saxe gave an overview of the Company’s progress and reconfirmed that based upon projections given to Research Frontiers by several of its licensees, it was a reasonable goal to expect the Company to have its first full year of profitability in 2003."
2002: The REFR stock fraud announces "backlog of customer orders"
2002: The REFR stock fraud announces an automotive deal
2003: The REFR stock fraud announces an automotive deal
2003: The REFR stock fraud announces another automotive deal
2004: The REFR stock fraud announces an automotive deal
2004: "Research Frontiers Incorporated announced today that it will write off its remaining investment in SPD Inc..."
2005: "This funding will help us continue to improve the performance of SPD technology, and to help our 34 licensees across the world roll out SPD chemical, film and end-products..."
Revenues from commerical SPD products from 1992 to date: $0.
REFR's uninterrupted history of fraud
1992: The REFR stock fraud announces an automotive deal
1993: The REFR stock fraud announces an automotive deal
1994: The REFR stock fraud announces an automotive deal
1995: "I am confident that products using SPD film technology will begin to appear in the near future."
1996: The REFR stock fraud announces an automotive deal
1997: RESEARCH FRONTIERS LICENSEE EXPECTS TO COMMERCIALIZE SPD PRODUCTS AND ESTABLISH NEW PRODUCTION FACILITIES NEXT YEAR
1998: REFR takes the year off, apparently.
1999: The REFR stock fraud announces an automotive deal
2000: "As a leading integrator of businesses and technologies within the $8 billion replacement window/door industry, we are very enthusiastic about the potential for SPD light control technology to enhance the value of our custom vinyl window products," commented Steve Hoffman, Chairman and Chief Executive Officer of ThermoView Industries, Inc.
2001: The REFR stock fraud announces an aviation deal
2001: The REFR stock fraud comments on short-selling, makes misleading statements about trading activity in REFR stock...and mentions itself and Qualcomm in the same breath, in a not-so-subtle and laughable implication that the fraudulent Research Frontiers can generate revenue from its worthless patents much the same way legitimate companies such as Qualcomm exploit their valuable intellectual property.
2002: "In his address to shareholders, Robert L. Saxe gave an overview of the Company’s progress and reconfirmed that based upon projections given to Research Frontiers by several of its licensees, it was a reasonable goal to expect the Company to have its first full year of profitability in 2003."
2002: The REFR stock fraud announces "backlog of customer orders"
2002: The REFR stock fraud announces an automotive deal
2003: The REFR stock fraud announces an automotive deal
2003: The REFR stock fraud announces another automotive deal
2004: The REFR stock fraud announces an automotive deal
2004: "Research Frontiers Incorporated announced today that it will write off its remaining investment in SPD Inc..."
2005: "This funding will help us continue to improve the performance of SPD technology, and to help our 34 licensees across the world roll out SPD chemical, film and end-products..."
Revenues from commerical SPD products from 1992 to date: $0.
Wednesday, April 06, 2005
Maintaining appearances
A followup, almost by way of epilogue to the investigating101 survey of InspecTech, was submitted early this year by soulard1_1999, one of the regular critics on the Yahoo! REFR message board.
Apparently Soulard called National Jets and asked the receptionist about James Lang, president and sole proprietor of InspecTech, whose office space is located within the headquarters of National Jets.
Soulard learned that James Lang was in fact an employee of National Jets. This no doubt goes a long way to explain how his office came to be in a "secure area" within the National Jets building. Then Soulard asked what department Lang worked in.
"Maintenance," he was told.
Soulard went on to converse with Lang's boss at National Jets, named Forrest "Twig" Dodd, who went on to reveal that Lang's jobs was primarily "inspections". Thus, the name "InspecTech", one might surmise.
This matter raises a number of disturbing questions about the complicity of National Jets in the whole phony promotional effort, but that is a line of discussion for another day and most likely another forum.
In summary, we have seen that REFR made a profitability projection in 2001 -- and in the process significantly boosted its stock -- based on a "sales goal" set by a maintenance worker at National Jets. This is either an example of inexcusably poor scrutinization on the part of REFR management, or conspiracy to commit fraud.
And yet some people claim to trust these people with their investment capital. Just incredible.
Apparently Soulard called National Jets and asked the receptionist about James Lang, president and sole proprietor of InspecTech, whose office space is located within the headquarters of National Jets.
Soulard learned that James Lang was in fact an employee of National Jets. This no doubt goes a long way to explain how his office came to be in a "secure area" within the National Jets building. Then Soulard asked what department Lang worked in.
"Maintenance," he was told.
Soulard went on to converse with Lang's boss at National Jets, named Forrest "Twig" Dodd, who went on to reveal that Lang's jobs was primarily "inspections". Thus, the name "InspecTech", one might surmise.
This matter raises a number of disturbing questions about the complicity of National Jets in the whole phony promotional effort, but that is a line of discussion for another day and most likely another forum.
In summary, we have seen that REFR made a profitability projection in 2001 -- and in the process significantly boosted its stock -- based on a "sales goal" set by a maintenance worker at National Jets. This is either an example of inexcusably poor scrutinization on the part of REFR management, or conspiracy to commit fraud.
And yet some people claim to trust these people with their investment capital. Just incredible.
InvestigaTech
The Internet is truly a marvelous thing. Where else will you find people willing to step up and look into matters that others readily cannot, and then broadcast their findings to the world? Of course, not every such source on the Internet is reliable, but occasionally you run into a true gem.
One such gem appears to have visited the Yahoo! REFR board in early 2004. A person posting under the alias "investigating101" spent about three months looking into various SPD licensee companies. One of this person's first targets was InspecTech Aero Services.
The initial interest in InspecTech stemmed from their claims that SPD had full FAA approval for installation in aircraft, something no other similar technology could claim. The truth of the matter, in brief, was that while there was some amount of FAA approval (specfically regarding flammability), it was far from a complete enough approval for it to have the green light for installation in commercial aircraft. Indeed, InspecTech's own massive list of "engineered" aircraft proved something of tip-off, as approval for that large a number of aircraft is a very lengthy and complex process, far more than a tiny company like InspecTech could be expected to complete on its own.
After revealing that as a preliminary report and viewing the hostile reactions of the promoters/longs on the message board, investigating101 (hereafter, "101") decided to go into further in-depth with the investigation. On March 24, 2004, 101 revealed the findings of a personal trip to InspecTech's Fort Lauderdale offices.
First, 101 visited the phone directory-listed location of InspecTech on SW 34th Street, and found it vacant, but with evidence in the form of marked parking spaces that this had once been InspecTech's offices.
Then, 101 travelled to the SW 9th Ave. location given on the InspecTech website, a few hundred yards away from the 34th St. building. There, 101 found that, contrary to what one would have expected from the website pictures and overall self-description, InspecTech was located inside the headquarters of National Jets, an airplane rental company which had been featured in several prior InspecTech and REFR press releases as being the customer for a retrofitting of SPD into one of their Lear air ambulances.
And indeed, not so much inside the headquarters, as in a seperate building marked "National Jets Parts Delivery". After confirming with the receptionist in the main building that there was an "InspecTech" inside there, 101 paid a visit to the parts building. (I should make a note here, for would-be amateur sleuths, that I personally do not endorse making personal visits to the headquarters of suspected scams. One can never be certain what awaits people who scamsters suspect may be getting too close to the truth.)
At any rate 101 asked the person who answered the door at the parts warehouse about InspecTech. That person replied, "if you are looking for Jimmy then you need to call him on the phone first, this is a secure area." Further questioning revealed that, far from the public showroom 101 was expecting, InspecTech simply consisted of a single office on the upstairs level of the parts warehouse. Any meetings with "Jimmy" (clearly referring to James Lang) would have to take place in the main National Jets building, either in the meeting rooms or the lobby.
This is what REFR promoters were expecting the world to believe was the source Airbus and Boeing were going to for electronic window shades on their new aircraft.
One thing of note is that 101 did not uncover any relationship between National Jets and InspecTech, apart from their shared office space and a demonstration flight made in the summer of 2002 (the one referred to by Asensio as a "silly circus"). However, later events showed that there was in fact a very strong connection indeed, as we will see in the conclusion to this series.
One such gem appears to have visited the Yahoo! REFR board in early 2004. A person posting under the alias "investigating101" spent about three months looking into various SPD licensee companies. One of this person's first targets was InspecTech Aero Services.
The initial interest in InspecTech stemmed from their claims that SPD had full FAA approval for installation in aircraft, something no other similar technology could claim. The truth of the matter, in brief, was that while there was some amount of FAA approval (specfically regarding flammability), it was far from a complete enough approval for it to have the green light for installation in commercial aircraft. Indeed, InspecTech's own massive list of "engineered" aircraft proved something of tip-off, as approval for that large a number of aircraft is a very lengthy and complex process, far more than a tiny company like InspecTech could be expected to complete on its own.
After revealing that as a preliminary report and viewing the hostile reactions of the promoters/longs on the message board, investigating101 (hereafter, "101") decided to go into further in-depth with the investigation. On March 24, 2004, 101 revealed the findings of a personal trip to InspecTech's Fort Lauderdale offices.
First, 101 visited the phone directory-listed location of InspecTech on SW 34th Street, and found it vacant, but with evidence in the form of marked parking spaces that this had once been InspecTech's offices.
Then, 101 travelled to the SW 9th Ave. location given on the InspecTech website, a few hundred yards away from the 34th St. building. There, 101 found that, contrary to what one would have expected from the website pictures and overall self-description, InspecTech was located inside the headquarters of National Jets, an airplane rental company which had been featured in several prior InspecTech and REFR press releases as being the customer for a retrofitting of SPD into one of their Lear air ambulances.
And indeed, not so much inside the headquarters, as in a seperate building marked "National Jets Parts Delivery". After confirming with the receptionist in the main building that there was an "InspecTech" inside there, 101 paid a visit to the parts building. (I should make a note here, for would-be amateur sleuths, that I personally do not endorse making personal visits to the headquarters of suspected scams. One can never be certain what awaits people who scamsters suspect may be getting too close to the truth.)
At any rate 101 asked the person who answered the door at the parts warehouse about InspecTech. That person replied, "if you are looking for Jimmy then you need to call him on the phone first, this is a secure area." Further questioning revealed that, far from the public showroom 101 was expecting, InspecTech simply consisted of a single office on the upstairs level of the parts warehouse. Any meetings with "Jimmy" (clearly referring to James Lang) would have to take place in the main National Jets building, either in the meeting rooms or the lobby.
This is what REFR promoters were expecting the world to believe was the source Airbus and Boeing were going to for electronic window shades on their new aircraft.
One thing of note is that 101 did not uncover any relationship between National Jets and InspecTech, apart from their shared office space and a demonstration flight made in the summer of 2002 (the one referred to by Asensio as a "silly circus"). However, later events showed that there was in fact a very strong connection indeed, as we will see in the conclusion to this series.
Tuesday, April 05, 2005
Upon Further InspecTech
To review, in 2001, REFR forecasted profitable quarters starting in 2002, and increasing profits through 2003 and beyond. All this based on a sales goal by a single licensee, InspecTech Aero Systems of Fort Lauderdale, FL, which was not only not met, nor remotely approached, but, based on results, seemingly not even attempted at all. So what went wrong?
The first problem was that InspecTech was very small. Extremely so. In fact, it had only two known employees at the time, and one of them, Alex Martinez, has subsequently left InspecTech to start his own SPD licensing company. Since Martinez's departure, InspecTech has become to all appearances a sole proprietorship, in the name of one James Lang. I'll have more on Mr. Lang in an upcoming segment.
Now how, you might well ask, was an outfit of two person supposed to install SPD on 5,000 windows in a single month? The simple answer to that is, they weren't. Instead, the idea was that all installations would be handled by one of "their completion centers". And by "their completion centers", they meant, an outside completion center whose phone number they had, and would accept custom installation orders. Indeed, in at least one documented case, the ordering party, Bell Textron Helicopters, were their own completion center. In other words, the customer had to install the stuff itself.
As a sidebar, yes, I did just state that Bell Textron had SPD windows put on at least one of their helicopters. The helicopter was subsequently shown off at several trade shows. It is not known if the helicopter was ever subsequently with the SPD installed, nor is it known if InspecTech charged for the installation. In any case, the display, like many others InspecTech has put on the past few years, utterly failed to spark the SPD mania that they always seem to expect.
So much for the installation side of the goal, what about sales? Well, once again, we go back to the basic problem that InspecTech is an extremely tiny company and unlikely to impress any customer who would be able to order the windows in any kind of quantity. The revelation of this didn't phase the promoters of the stock one bit, as they went on to assert than no less a company than Boeing Aviation was going to rely on InspecTech for the electronic shading system for their new 7E7 jet aircraft, and stuck with that assertion right up until the suppliers for the 7E7 were announced and, to the surprise of no one, InspecTech was not on the list.
Another thing might well have occurred to the reader by this point. REFR surely had to know that they were dealing with a tiny, two-person company when they gave InspecTech their license to sell SPD products. Why, then, did they not question InspecTech's wild sales projections? Why did they embrace them so readily, and even go on to make projections to their shareholders based on the dubious input of this tiny outfit?
Why, indeed. To this very day Joe Harary tap-dances around the questions of the preceding paragraph. The most coherent explanation given appears to be that Harary, being a natural optimist, simply wanted to believe the projections. Isn't that just special? Anyone who's followed the stock market for any amount of time knows how much analysts love companies that are too "optimistic" in their projections. And this was a case of overoptimism on the order of some of the worst of the dot-com companies, practically criminal for the CEO of a public company.
One would at least think that REFR would sever ties with the source of such an embarrassment, and yet, the last anyone has heard, the relationship between REFR and InspecTech was as strong as ever. REFR turned to InspecTech in early 2004 to supply film for an auto show when the original supplier was unable to. InspecTech remains on the REFR's list of licensees, although the only times companies ever seem to be removed from the list are when they explicitly cancel their license. General Electric, for example, took their license a decade ago and never did anything with it, yet they remain listed as one of REFR's stable of licensees.
As for InspecTech's part, while their status as a private company makes them immune to SEC oversight, a number of sources have, over the years, done their own legwork into the company. The miniscule size of the company is only one of the items uncovered. Stay tuned for more.
The first problem was that InspecTech was very small. Extremely so. In fact, it had only two known employees at the time, and one of them, Alex Martinez, has subsequently left InspecTech to start his own SPD licensing company. Since Martinez's departure, InspecTech has become to all appearances a sole proprietorship, in the name of one James Lang. I'll have more on Mr. Lang in an upcoming segment.
Now how, you might well ask, was an outfit of two person supposed to install SPD on 5,000 windows in a single month? The simple answer to that is, they weren't. Instead, the idea was that all installations would be handled by one of "their completion centers". And by "their completion centers", they meant, an outside completion center whose phone number they had, and would accept custom installation orders. Indeed, in at least one documented case, the ordering party, Bell Textron Helicopters, were their own completion center. In other words, the customer had to install the stuff itself.
As a sidebar, yes, I did just state that Bell Textron had SPD windows put on at least one of their helicopters. The helicopter was subsequently shown off at several trade shows. It is not known if the helicopter was ever subsequently with the SPD installed, nor is it known if InspecTech charged for the installation. In any case, the display, like many others InspecTech has put on the past few years, utterly failed to spark the SPD mania that they always seem to expect.
So much for the installation side of the goal, what about sales? Well, once again, we go back to the basic problem that InspecTech is an extremely tiny company and unlikely to impress any customer who would be able to order the windows in any kind of quantity. The revelation of this didn't phase the promoters of the stock one bit, as they went on to assert than no less a company than Boeing Aviation was going to rely on InspecTech for the electronic shading system for their new 7E7 jet aircraft, and stuck with that assertion right up until the suppliers for the 7E7 were announced and, to the surprise of no one, InspecTech was not on the list.
Another thing might well have occurred to the reader by this point. REFR surely had to know that they were dealing with a tiny, two-person company when they gave InspecTech their license to sell SPD products. Why, then, did they not question InspecTech's wild sales projections? Why did they embrace them so readily, and even go on to make projections to their shareholders based on the dubious input of this tiny outfit?
Why, indeed. To this very day Joe Harary tap-dances around the questions of the preceding paragraph. The most coherent explanation given appears to be that Harary, being a natural optimist, simply wanted to believe the projections. Isn't that just special? Anyone who's followed the stock market for any amount of time knows how much analysts love companies that are too "optimistic" in their projections. And this was a case of overoptimism on the order of some of the worst of the dot-com companies, practically criminal for the CEO of a public company.
One would at least think that REFR would sever ties with the source of such an embarrassment, and yet, the last anyone has heard, the relationship between REFR and InspecTech was as strong as ever. REFR turned to InspecTech in early 2004 to supply film for an auto show when the original supplier was unable to. InspecTech remains on the REFR's list of licensees, although the only times companies ever seem to be removed from the list are when they explicitly cancel their license. General Electric, for example, took their license a decade ago and never did anything with it, yet they remain listed as one of REFR's stable of licensees.
As for InspecTech's part, while their status as a private company makes them immune to SEC oversight, a number of sources have, over the years, done their own legwork into the company. The miniscule size of the company is only one of the items uncovered. Stay tuned for more.
False profits
On June 14, 2001, REFR stock spiked from around $24 to nearly $28, as a result of a press release entitled "Research Frontiers Announces Its First Profit Targets as Part of New "Road Map" for the Future". The press release featured this quote from REFR founder and then-president Robert Saxe:
"We have now substantially completed the goals set forth in the 'road map' we outlined for our shareholders in mid-1999, which focused on building the SPD supply infrastructure. With the achievement of those goals, and based on commercial sales projections for SPD light-control products by our licensees, for the first time we can reasonably predict the timing of future revenues and profits. 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."
As we know now, it didn't exactly work out that way for REFR. So what went wrong? One after-the-fact spin attempt tried to blame the failure on 9/11, but a press release from September 24th, two weeks after the attacks, put the kibosh on that out before it got anywhere.
The blame ultimately went where it was seemingly intended to go all along, the hapless, yet totally unaccountable licensee, InspecTech Aero Services. The September 24th release referenced a "goal" InspecTech had set of selling and installing 5,000 SPD aircraft windows per month. With REFR projected to earn between $90 and $150 per window in royalties, that would come to anywhere between $5.4 million and $8 million per year, enough to make REFR profitable assuming expenditures remained constant.
If you've reviewed REFR's financial statements, then you don't need me to tell you that it didn't quite work out that way. Despite an impressive list of aircraft that InspecTech claimed to have "engineered" windows for, actual sales were insignificant, possibly even nonexistent. REFR's revenues went nowhere, and even a handful of its shareholders were driven to give up in frustration.
So what went so horribly wrong at InspecTech? How was REFR apparently caught so off-guard by this total failure of one of its seemingly most active licensees? What exactly is this InspecTech, that claims to be "the leading company in the aerospace industry" on its front webpage? I'll get more into those questions in the next part.
"We have now substantially completed the goals set forth in the 'road map' we outlined for our shareholders in mid-1999, which focused on building the SPD supply infrastructure. With the achievement of those goals, and based on commercial sales projections for SPD light-control products by our licensees, for the first time we can reasonably predict the timing of future revenues and profits. 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."
As we know now, it didn't exactly work out that way for REFR. So what went wrong? One after-the-fact spin attempt tried to blame the failure on 9/11, but a press release from September 24th, two weeks after the attacks, put the kibosh on that out before it got anywhere.
The blame ultimately went where it was seemingly intended to go all along, the hapless, yet totally unaccountable licensee, InspecTech Aero Services. The September 24th release referenced a "goal" InspecTech had set of selling and installing 5,000 SPD aircraft windows per month. With REFR projected to earn between $90 and $150 per window in royalties, that would come to anywhere between $5.4 million and $8 million per year, enough to make REFR profitable assuming expenditures remained constant.
If you've reviewed REFR's financial statements, then you don't need me to tell you that it didn't quite work out that way. Despite an impressive list of aircraft that InspecTech claimed to have "engineered" windows for, actual sales were insignificant, possibly even nonexistent. REFR's revenues went nowhere, and even a handful of its shareholders were driven to give up in frustration.
So what went so horribly wrong at InspecTech? How was REFR apparently caught so off-guard by this total failure of one of its seemingly most active licensees? What exactly is this InspecTech, that claims to be "the leading company in the aerospace industry" on its front webpage? I'll get more into those questions in the next part.
Monday, April 04, 2005
Bombs away
Quite possibly the most fascinating licensee REFR has ever had (and continues to, to this day), is an outfit called InspecTech Aero Service, out of Fort Lauderdale.
Just to give a preview of coming attractions, a quote from REFR's 2002 annual report:
This is a prime example of the pattern the promoters follow. Play anything with a resolution date in the future as "the big one" that will launch REFR into the stratosphere. Then, when the date passes, reverse course and claim nothing meaningful was ever implied nor expected.
It's all deliciously dishonest of them and I intend to feast on their disingenuity for a long time to come on this blog.
As for InspecTech, the Bombardier "order" is merely an appetizer.
Just to give a preview of coming attractions, a quote from REFR's 2002 annual report:
"More recently, InspecTech won an order to provide SPD windows for the Bombardier Challenger, an intercontinental business jet with a wide body cabin."Two years later, there is no evidence that there is or ever was any relationship between InspecTech and Bombardier. The promoters are presently attempting to make the claim that there was no implication that the order was with Bombardier, but rather that it was merely for some number of Bombardier Challenger jets. Not to put too fine a point on it, but, yeah right.
This is a prime example of the pattern the promoters follow. Play anything with a resolution date in the future as "the big one" that will launch REFR into the stratosphere. Then, when the date passes, reverse course and claim nothing meaningful was ever implied nor expected.
It's all deliciously dishonest of them and I intend to feast on their disingenuity for a long time to come on this blog.
As for InspecTech, the Bombardier "order" is merely an appetizer.
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