EXECUTIVE SUMMARY
SPD Control Systems Corporation
(SCSC)
June 2011
Energy conservation through
electronically controllable
Smart Glass
Huge Worldwide Market
for our Controllers and
Energy Management
Systems: Automotive &
Architectural
Daimler AG IP Contract
(2010)
Patented Technology
1 Granted Patent
4 Pending Patents
Funding to Achieve
Positive Cash Flow
$1M in 2011
$1.4M in 2012
Contact
Jay Moskowitz
Chairman & Founder
Center for Wireless &
Info. Technology (CEWIT)
Stony Brook Univ. R&D Park
1500 Stony Brook Road
Stony Brook, New York 11794
(631) 776-8500
(631) 776-8501 (fax)
jay@spdControlSystems.com
www.spdControlSystem.com
Management
Jay Moskowitz
Chairman & Founder
John Petraglia
President & CEO
Julius Salud
VP Marketing & Corporate
Strategy
Peter Solaski
CTO
Changing the Way You View
Windows®
Executive Summary – June 2011
Confidential
Overview. Two historically successful entrepreneurs have brought
together a versatile, experienced, senior level management and
patented technology to create sophisticated electronic controllers
and energy management systems that are focused on energy
efficiency and the conservation of a significant level of energy usage
in the automotive, architectural (residential and commercial),
aerospace and marine marketplaces.
SPD Control Systems Corporation (SCSC) is a CleanTech company that
utilizes state-of-the-art electronically controllable Suspended Particle
Device (SPD) dynamically adjustable tintable glass to reduce the amount
of solar energy passing through windows to reduce HVAC and artificial
lighting requirements. The SPD technology has significant benefits over
fixed tinted windows and competitive dynamic glass tinting technologies
such as its unparalleled ability to rapidly and precisely change to any
desired transparency level (clear through dark) within 1 to 3 seconds
regardless of the window size, its ability to be used in polycarbonate or
glass windows, its ability to be applied to curved surfaces, its wide range
of operating temperatures, its uniformity of change and its lower cost to
manufacture.
Introduced at a time when the world is acutely aware of energy
consumption, SPD Smart Glass used in conjunction with our control
system platform has a potential to save 25% of the electrical energy
costs in residential and commercial buildings and reduce fuel
consumption in automobiles, airplanes and other vehicles through the
optimal control of solar heat passing through windows. Unlike fixed
tinted windows that remain dark when direct sunlight isn’t hitting them,
this glass can be made clear at that time of the day and darker when it
needs to maximally block solar heat. The increased use of natural
instead of artificial light (“daylighting”) further reduces electrical
consumption and increases the overall energy savings beyond 35%.
We are seeking a $1M investment in 2011 and $1.4M in 2012 to bring
the company to cash flow positive. With multiple revenue streams from
several industries and a worldwide market presence, we expect that an
acquisition will provide a significant return on our investor’s equity.
Investment funds will be used for marketing, closing IP licensing
contracts, product sales, engineering, additional patent applications and
operating expenses. Risks are mitigated through a strong domestic and
international patent position strengthening its product sales and
generating licensing fees.
Markets/Traction. Our primary markets are automotive, architecture,
aerospace and marine. The auto market is divided into original
equipment manufacturers (OEM’s or auto manufacturers) and
aftermarket. The aftermarket dealers (“detailers”) replace existing auto
windows with SPD windows and install our TintMaker® automotive
controller. The architecture market is divided into two major segments:
residential and commercial building windows. By 2016 the total
size of the controller market across all marketplaces, will be in excess of
$750M.
SPD Control Systems Corporation Executive Summary
Current Investors
Jay Moskowitz
John Petraglia
Research Frontiers Inc.
(3/31/07 10Q Filing)
Private Accredited Investors
Exit Strategy
Strategic Acquisition
Company Milestones
IP Contract with Daimler AG
for Mercedes-Benz
(2010)
U.S. Patent Granted
(2010)
Release of the Wireless
Building Control System
(2010)
Release of the TintMaker®
8-Window Automotive and
Architectural Controllers
(2009)
Release of the RoadRunner
8-Window Automotive
Controller (2008)
SCSC demonstrates its
Automotive Controller with 8
SPD Windows at the RFI
Annual Meeting (2008)
SPD Demonstration
Controller Released (2006)
US, Japanese, and European
Patents Filed (2005)
Imagine the day when a
fifty story mid-rise will
change its glass “skin”
façade as the day
progresses, taking into
account the landlord’s
operational
requirements, tenant
customization, the
temperature outdoors,
and the amount of
sunlight hitting each
window – Welcome to
the world of windows
controlled by SCSC.
Jay Moskowitz
Chairman & Founder
The Systems Behind the
Glass®
The initial SPD market is automotive. There are 22 automakers
worldwide that together produce more than 48 million cars each year.
In December 2010 SCSC signed Daimler AG / Mercedes-Benz to
a non-exclusive worldwide IP license. The contract is for 15 years
providing a royalty for vehicles using SPD glass. This is the first of
many OEM license agreements. It is a strong signal to the rest of the
automotive industry that our IP is viable and necessary. We will also be
selling OEM controllers to the automotive manufacturers.
We are selling our TintMaker/Automotive controller to aftermarket
detailers. Over two dozen TintMaker automotive controllers have been
distributed among the major automotive companies. GM, Ford and
others have outfitted demonstration automobiles with our controller.
We currently have ongoing projects with numerous automotive
companies around the world.
TintMaker/Architectural controllers integrate with our Master Energy
Management Control System and utilize an integral radio-based mesh
network Internet-like packet switching technology to form a controller
network to coordinate automated and manual window tint operations
across the façade of buildings. The architecture market is expected to
begin its major sales growth in 3 to 4 years.
Research Frontiers Inc. (RFI) License. SCSC was founded in Q4
2005. We were immediately awarded an RFI (NASDAQ:REFR) license to
develop and sell electronics for the control of SPD Smart Glass. RFI is
the owner of over 500 SPD technology patents and primarily licenses
its technology. They do not build SPD products. Only RFI licensees are
able to sell SPD windows.
The RFI Licensees include SPD supply chain component manufacturers
and companies that together sell half of the yearly worldwide supply of
window glass. The licensees are the multi-billion dollar companies in
their respective market segments, including Hitachi Chemical, DIC
Corporation, Asahi Glass, Nippon Sheet Glass, Pilkington Glass, and
many more. The RFI license allows SCSC to be part of this prestigious
community. It is these companies and sometimes their largest
customers that directly purchase SCSC products.
Industry Relationships. The company has created numerous
affiliations and business collaborations that are serving it well during its
expansion. We have strong business relationships with the key RFI
licensees including Hitachi, DIC Corporation, AGP, GKN Aerospace and
Pilkington. We are working as a team to satisfy the demanding
requirements of the customers for SPD Smart Glass in the automotive,
aerospace, marine and architectural marketplaces.
The company was granted a $600,000 contract from the New York
State Energy Research and Development Authority (NYSERDA) to
create a prototype of its Wireless Building Energy Management Control
System. This scalable system is capable of manually and automatically
controlling the windows of small buildings to skyscrapers. The company
also assembled a prestigious team consisting of the Florida Solar
Energy Center, the architectural firm of Skidmore, Owings and Merrill
(SOM) and the Solar Energy Research Center of Rensselaer Polytechnic
Institute to joint bid on a DOE proposal and was named as a sub-
Executive Summary – June 2011
Page 2 of 3
SPD Control Systems Corporation Executive Summary
contractor on a National Science Foundation (NSF) proposal.
Ownership / Investment. SCSC is owned by its founders and five minority shareholders. Senior
management is assigned company options. SCSC has raised $2.45M+ to date and counts the
industry creator RFI among its investors.
Executive Management / Personnel. The SCSC Executive team brings together outstanding
management, marketing and technical personnel with over 100 man-years of experience. Our
managers are serial entrepreneurs who have founded and successfully sold numerous companies
returning their investors a significant ROI. They have designed, developed and supported products
in-use on a worldwide basis. They have managed local teams to international teams and small
groups to hundreds of staff members. They have created and managed products servicing millions
of users. The company has 4 full-time and 4 part-time employees. Office space is leased at the
Center for Wireless and Information Technology (CEWIT) on the campus of Stony Brook University
in Long Island, New York and offices are maintained in Palm Beach, Florida and Silicon Valley,
California.
SPD Window Manufacturing. SPD film, which is laminated between two pieces of glass to form a
window, is now available from Hitachi Chemical in large quantities. Isoclima S.p.A. and iGlass Pty
Limited will become additional sources of film in 2012. The current production capacity is sufficient
for supporting the major auto manufacturers, auto aftermarket, and small scale architectural
projects. SPD windows have been rigorously tested by auto manufacturers and have been deemed
ready for production as demonstrated by the 2012 Mercedes-Benz SLK with an SPD Smart Glass
panoramic roof. Testing has further proven that SPD windows have a far superior range of blocking
solar heat than any other product available today.
Competition. There are two types of competitors: alternative dynamic glass technologies and the
simple SPD controllers covered by RFI patents. SPD is a far superior Smart Glass technology and
offers significant advantages over its competitor Electrochromic (EC) glass. Our IP license with
Daimler AG proves the superiority of SPD Smart Glass. The simple controller IP licensed by RFI
represents an insignificant percentage of controller sales as they are limited to stand alone single
or small window units that operate in isolation. Any degree of coordinated controllers that integrate
with other automotive, aerospace, marine or architectural systems (such as operating a buildings
entire façade) would require an SCSC license. Eventually, after a significant number of worldwide
installations, companies of substantial size and capabilities will notice the size of this market and
look toward entering it. This would include Lutron and Crestron for controllers and control systems
and Honeywell, Johnson Controls and General Electric for integration with their building automation
systems. Our patents will be a barrier to entry for these firms unless they license our IP.
Exit Strategy. Acquisition is our primary exit strategy. Our two major product lines are saleable
separately. Automotive electronic controller manufacturers such as Delphi, Johnson Controls,
Honeywell, Magna International, and Allen-Bradley are candidates for acquiring our automotive
business.
Lutron, Crestron, Honeywell, Johnson Controls and GE are candidates for our
architecture business. We are currently discussing strategic alliances with a number of the above
companies.
Financials ($ Million)
Financials
Sales Orders
Revenue Collected
COG
Operational Expenses
Profit (before taxes)
Accumulated Profit
Executive Summary – June 2011
2011
$0.19
$0.15
$0.01
$0.52
2012
$0.40
$0.42
$0.05
$1.52
2013
$2.04
$1.42
$0.20
$2.08
2014
$13.97
$10.85
$7.23
$3.34
2015
$28.02
$23.11
$13.31
$5.02
($0.39)
($0.39)
($1.15)
($1.54)
($0.86)
($2.40)
$0.28
($2.12)
$4.78
$2.66
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