SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                 FORM 10-K

                   ANNUAL REPORT PURSUANT TO SECTION 13 or15(d) of
                   THE SECURITIES AND EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003  Commission File Number 1-9399

                       RESEARCH FRONTIERS INCORPORATED
           (Exact name of registrant as specified in its charter)

            DELAWARE                             11-2103466
   (State or other jurisdiction of              (I.R.S. Employer
    incorporation or organization)               Identification No.)

          240 CROSSWAYS PARK DRIVE
          WOODBURY, NEW YORK                     11797-2033
 (Address of principal executive offices)        (Zip Code)

 Registrant's telephone number, including area code (516) 364-1902

Securities registered pursuant to Section 12(b) of the Act:

                                            Name of Exchange
          Title of Class                   on Which Registered
          None

         Securities registered pursuant to Section 12(g) of the Act:

                        Common Stock, $0.0001 Par value
                               (Title of Class)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes  X   No

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.  [X]

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).
Yes X   No

As of March 15, 2004 there were 12,791,330 shares of Research
Frontiers Incorporated common stock outstanding.  The aggregate
market value of the voting and non-voting common equity held by
non-affiliates was $167,799,773 computed in accordance with the
rules of the SEC by reference to the closing price of the Company's
common stock as of June 30, 2003 which was $13.98.  In making
this computation, all shares known to be owned by directors and
executive officers of the Company and all shares known to be
owned by other persons holding in excess of 5% of the Company's
common stock have been deemed held by "affiliates" of the
Company.  Nothing herein shall prejudice the right of the Company
or any such person to deny that any such director, executive officer,
or stockholder is an "affiliate."

                              PART I

ITEM 1.                      BUSINESS

General

     Research Frontiers Incorporated ("Research Frontiers" or the
"Company") was incorporated in New York in 1965 and
reincorporated in Delaware in 1989.  Research Frontiers' business is
to develop and license our suspended particle technology for
controlling the amount of light passing through a device. Such
suspended particle devices are often referred to as "SPDs," "light
valves," or "SPD-Smart " products.

     SPDs use microscopic light-absorbing particles that are either in
a liquid suspension or a film. The microscopic particles align when an
electrical voltage is applied.  This permits light to pass through the
device, and allows the amount of light to be controlled. The first light
valve of this type was invented by Dr. Edwin Land, founder of
Polaroid Corporation, in the 1930s.  Since 1965, Research Frontiers
has been actively working to develop and license its own technology,
which it protects using patents, trade secrets and know- how. Although
patent and trade secret protection is not a guarantee of commercial
success, Research Frontiers currently has approximately 438 patents
and pending  patent applications throughout the world protecting its
technology.

     As a result of our efforts over the years, Research Frontiers
Incorporated has become the world's leader in suspended-particle-
device development and research, and licenses its light-control
technology to other companies. Currently, our 29 licensees are
categorized into three main areas: materials for making films
(solutions and emulsions); film; and end-products. Our emulsion and
solution makers produce the basic chemicals-the SPD particles and the
various special polymers that work in conjunction with such particles,
and from which SPD films are made. The film makers use a thin layer
of solution or emulsion, as the case may be, which is coated between
two sheets of plastic film which is then partly solidified to form an
SPD film that allows users to control the amount of light passing
through such film. The end-product licensees then incorporate such
SPD light-control film into a variety of SPD-Smart products.

     The past several years have been important for Research Frontiers
as we moved from being a company with a technology under
development to a company with products using our technology being
sold by our licensees. Awareness of SPD technology is at an all-time
high. The technology has also recently received some prestigious
awards, including the Best of What's New Award  for home technology
products from Popular Science and being named one of the top new
technologies for 2002 by the Society of Automotive Engineers.

     SPD-Smart windows have been installed in business and
commercial aircraft, as well as in architectural, automotive and
appliance glass projects. SPD technology is a horizontal "enabling"
technology cutting across many industries which has wide commercial
applications in many types of products where variable light
transmission is desired, such as:

-  "smart" windows, skylights and sunshades for the architectural,
    aircraft, marine, automotive and appliance industries;
-   variable light transmission sunglasses, goggles and other eyewear;
-   self-dimmable automotive sunroofs, sunvisors and rear-view mirrors; and
-   flat panel information displays for use in billboards, scoreboards,
    point-of-purchase advertising displays, traffic signs, computers,
    televisions, telephones, PDAs and other electronic instruments.

     Various licensees of Research Frontiers have developed SPD-
Smart windows and other products.  Several of our licensees have
already sold aircraft, architectural, and automotive windows, as well
as glass doors for appliances using SPD technology. Also, prototypes
of flat panel displays, eyewear, and self-dimming automotive rear-view
mirrors have been developed.  These prototypes demonstrate the
feasibility and operation of the products they relate to, but they may
need additional product design, engineering or testing before
commercial products are introduced. In April 2001, Hankuk Glass
Industries, Inc., a licensee of the Company, announced that its
subsidiary devoted exclusively to the production of SPD film and end-
products, SPD Inc., had acquired a factory in Incheon, Korea.  SPD
Inc. announced in January 2002 that this factory had begun production
of SPD film and end-products made from SPD film. Some of our
licensees consider the exact stage of development, product introduction
strategies and timetables, and other plans to be proprietary or secret,
and as such cannot be disclosed by the Company until such licensees
make their own public announcements or product launches. During
2002, 2003, and to date in 2004, marketing campaigns and product
launches by our licensees have been announced under the indicated
trademarks for their SPD-Smart products:

Licensee                           Trademark
Cricursa Cristales Curvados        Cri-Regulite
Innovative Glass Corporation       E-Glass
InspecTech Aero Service            SPD-Equipped, I-Shade
Kerros Lmited                      IntelliTint
SPD Technologies                   InfiniTint, New-View,
(f/k/a Razor's Edge Technologies)  Smart-Shade
SPD Systems Inc.                   Health Smart, VectorLux,
                                   InstaTint
ThermoView Industries              Alter-Lite

In addition, Research Frontiers introduced various marketing programs
under the following trademarks:  SPD-Smart, VaryFast  The View
of the Future - Everywhere you Look, Powered by SPD, and Visit
SmartGlass.com - to change your view of the World .

     Our licensee InspecTech Aero Service Inc. reported that they
have received FAA certification for, and have already installed  SPD-
Smart windows on various aircraft. InspecTech reports having
installed or currently engineered  SPD-Smart windows for the
following aircraft:

 -    Airbus A319, A320, A380
 -    Boeing 737,747, 757, 7E7, BBJ
 -    Bombardier Challenger 601, 604
 -    Bombardier Global Ex
 -    Bombardier Learjet 24, 25, 31, 35, 36, 45, 55,60
 -    Cessna Citation I, II, III
 -    Cessna Conquest I, II
 -    Cessna Citations 525,525A, 550,  Excel, 5 and CX
 -    Dassault Falcon 10, 50
 -    EADS Eurocopter EC 155
 -    Gulfstream (all models)
 -    Piaggio P180 Avanti, and Pilatus PC-12
 -    Raytheon Beechjet
 -    Raytheon Hawker 700, 800
 -    Raytheon King Air 90, 100, 200, 350
 -    Sikorsky S-92 Helicopter
 -    Textron-Lycoming Bell 430 Helicopter

     The following table summarizes Research Frontiers' existing
license agreements and lists the year these agreements were entered into:

Licensee                 Products Covered                              Territory

Air Products and    SPD emulsions and films for other licensees (2003) Worldwide
Chemicals, Inc.

American Glass Products  Architectural and automotive windows (2002)   Worldwide
                                                                  (except Korea)

Asahi Glass Company      Sunroof glass for other licensees (2001)      Worldwide
and subsidiary
AGC Automotive Americas
(f/k/a AP Technoglass Co.)

Avery Dennison Corp.     SPD displays (2001)                           Worldwide

BOS GmbH                 Variable light transmission SPD sunshades     Worldwide
                         and sunvisors.  (2002)

BRG Group, Ltd.          Architectural and automotive windows (2002)   Worldwide
                                                                  (except Korea)

Cricursa Cristales Curvados Architectural and automotive windows(2002) Worldwide
                                                                  (except Korea)

Custom Glass Corporation  Windows and sunroofs for mass                Worldwide
                          transit trains/busses; SPD film         (except Korea)
                          lamination for other licensees (2003)

Dainippon Ink and        SPD emulsions for other licensees (1999)      Worldwide
Chemicals Incorporated

Film Technologies Int'l  SPD film for other licensees and              Worldwide
                         prospective licensees (2001)

General Electric Company SPD film for other licensees and              Worldwide
                         prospective licensees (1995)

Glaverbel, S.A.          Automotive vehicle rear-view mirrors,         Worldwide
                         transportation vehicle sunvisors, and    (except  Korea
                         architectural and automotive windows(1996) for windows)

Global Mirror GmbH       Rear-view mirrors and sunvisors (1999)        Worldwide

Hankuk Glass Industries  Broad range of SPD light control products     Worldwide
                         including windows, flat panel displays,
                         automotive vehicle rear-view mirrors and
                         sunvisors (installed as original equipment
                         on Korean-made cars), and sunroofs; SPD film
                         for licensees and prospective licensees (1997)

Hitachi Chemical Co.,Ltd SPD emulsions and films for other             Worldwide
                         licensees (1999)

Innovative Glass Corp.   Architectural windows (2003)                 US,Canada,
                                                                      and Mexico

InspecTech Aero Service  Aircraft and marine windows and cabin        Worldwide
                         dividers (2001)                          (except Korea)

Isoclima S.p.A.          Architectural and automotive windows; SPD     Worldwide
                         emulsion and film for other              (except Korea)
                         licensees (2002)

Kerros Limited           Automotive windows and sunroofs (2003)        Worldwide
                                                                  (except Korea)
                                                                for  aftermarket
                                                                   and UK only
                                                                     for OEMs

Laminated Technologies Inc. SPD film lamination for
                            other licensees (2002)                     Worldwide


Leminur Limited          Architectural windows (2003)                 Russia and
                                                                    Countries of
                                                                   former Soviet
                                                                        Union

N.V. Bekaert S.A (acquired   Architectural and automotive windows,     Worldwide
from Material Sciences Corp.)SPD film for other licensees, prospective
                             licensees and architectural and automotive
                             window companies (1997)

Polaroid Corporation      SPD emulsions and films for other            Worldwide
                          licensees (2000)

Saint-Gobain Glass France Architectural windows, automotive and other  Worldwide
                          transportation vehicle windows (other than     (except
                          aircraft and spacecraft), kitchen and laundry   Korea)
                          home appliance windows, and automotive sunvisors
                          and rear-view mirrors for cars, SUVs, light
                          trucks and other transportation vehicles (other
                          than as original equipment mirrors on heavy trucks,
                          busses, construction vehicles, firetrucks and other
                          vehicles in Class 5-8 or weighing over 16,000
                          pounds) (2003)

SPD Technologies, Inc.    Architectural windows (2002)                 Worldwide
                                                                  (except Korea)

SPD Systems, Inc.    Architectural, appliance and marine windows (2002)Worldwide
                                                                  (except Korea)

ThermoView Industries, Inc.   Architectural windows (2000)             Worldwide
                                                                  (except Korea)

Traco, Inc.              Architectural windows (2003)                  Worldwide
                                                                  (except Korea)

Vision (Environmental    Architectural windows (2003)             United Kingdom
Innovation) Limited

     Licensees of Research Frontiers who incorporate SPD
technology into end-products will pay Research Frontiers a royalty
of 5-15% of net sales of licensed products under license agreements
currently in effect, and may also be required to pay Research
Frontiers minimum annual royalties.  Licensees who sell products or
components to other licensees of Research Frontiers do not pay a
royalty on such sale and Research Frontiers will collect such royalty
from the licensee incorporating such products or components into
their own end-products. Research Frontiers' license agreements
typically allow the licensee to terminate the license after some
period of time, and give Research Frontiers only limited rights to
terminate before the license expires. Most licenses are non-
exclusive and generally last as long as our patents remain in effect.
The license granted to Hankuk Glass Industries is exclusive within
Korea for certain applications through December 2004.  Global
Mirror's license restricts new licenses from being granted in the
truck mirror original equipment market for a period of time if
certain sales milestones are met with respect to commercial vehicles
in Classes 5 through 8 with gross vehicle weights in excess of
16,000 pounds.

     Although the Company believes based upon the status of
current negotiations that additional license agreements with third
parties will be entered into, there can be no assurance that any such
additional license agreements will be consummated, or the extent
that any current or future licensee of the Company will produce or
sell commercial products using the Company's technology or
generate meaningful revenue from sales of such licensed products.

     The Company plans to continue to exploit its SPD light valve
technology by entering into additional license and other agreements
with end-product manufacturers such as manufacturers of flat glass,
flat panel displays, automotive products, and with other interested
companies who may wish to acquire rights to manufacture and sell
the Company's proprietary emulsions and films.  The Company's
plans also call for further development of its SPD light valve
technology and the provision of additional technological and
marketing assistance to its licensees to develop commercially viable
products using SPD technology and expand the markets for such
products.  The Company cannot predict when or if new license
agreements will be entered into or the extent to which commercial
products will result from its existing or future licensees because of
the risks inherent in the developmental process and because
commercialization is dependent upon the efforts of its licensees as
well as on the continuing research and development efforts of the
Company.

     On March 15, 2004, the Company had thirteen full-time
employees, six of whom are technical personnel, and the rest of
whom perform legal, marketing, investor relations, and
administrative functions.  Of these employees, two have obtained a
doctorate in chemistry, one has a masters in chemistry, two have
extensive industrial experience in electronics and electrical
engineering, and one has majored in physics.  Three employees also
have additional postgraduate degrees in business administration.
Also the Company's suppliers and licensees have people on their
teams with advanced degrees in a number of areas relevant to the
commercial development of products using the Company's
technology. The success of the Company is dependent on, among
other things, the services of its senior management, the loss of
whose services could have a material adverse effect upon the
prospects of the Company.

     The Company believes that its SPD light valve technology has
certain performance advantages over other technologies for so-
called "smart windows," windows which electrically vary the
amount of light passing through them, and automatically self-
dimmable automotive rear-view mirrors.

     Variable light transmission technologies can be classified into
two basic types: "active" technologies that can be controlled
electrically by the user either automatically or manually, and passive
technologies that can only react to ambient environmental
conditions such as changes in lighting or temperature.  One type of
passive variable light transmission technology is photochromic
technology; such devices change their level of transparency in
reaction to external radiation.  As compared to photochromic
technology, the Company's technology permits the user to adjust the
amount of light passing through the viewing area of the device
rather than merely reacting to external radiation.  In addition, the
reaction time necessary to change from light to dark with SPDs can
be almost instantaneous, as compared to the much slower reaction
time for photochromic devices.  Unlike SPD technology,
photochromic technology does not function well at the high and low
ends of the temperature range in which smart windows are normally
expected to operate.

     The active, user-controllable technologies are sometimes
referred to as "smart" technologies. These active technologies are
far more useful because they can be controlled electrically by a user
with  a manual adjustment or automatically when coupled with a
timer or sensing device such as a photocell, motion detector or
thermostat. There are three main types of active devices which are
compared below:

-     Electrochromic devices (EC)
-     Liquid crystal devices (LC)
-     Suspended-particle devices (SPD)

Electrochromic Technology:  When compared to electrochromic
windows and rear-view mirrors, which use a direct current voltage
to alter the molecular structure of electrochromic materials (which
can be in the form of either a liquid, gel or solid film) causing the
material to darken, SPDs have numerous potential performance,
manufacturing and cost advantages. In comparing the Company's
SPD light valves to electrochromic technologies,  SPDs are
expected to have some or all of the following advantages:

-     faster response time;
-     lower estimated costs;
-     more reliable performance over a wider temperature range;
-     capability of achieving darker off-states;
-     lower current drain;
-     higher estimated battery life in applications where batteries are used;
-     no "iris effect" (where light transmission changes first occur at
      the outer edges of a window or mirror and then work their way
      toward the center) when changing from clear to dark and back
      again;
-     SPD technology is a film-based technology that can be applied
      to plastic as well as glass, and which can be applied to curved
      as well as flat surfaces.

Many companies with substantially greater resources than Research
Frontiers such as 3M, Asahi Glass, Gentex Corp., Pilkington, PPG
Industries, Saint-Gobain and other large corporations have pursued
or are pursuing projects in the electrochromic area.  Some of these
companies have reported discontinuing or substantially curtailing
their work on electrochromics due to technical problems and issues
relating to the expense of these technologies. At least two
companies, Saint-Gobain and Sage Electrochromics, Inc. are
currently actively working to commercialize electrochromic window
products.

Liquid Crystal Technology:  To date, the main types of liquid
crystal smart windows have been produced by Taliq Corp. (a
subsidiary of Raychem Corp. which has since discontinued its liquid
crystal operations and licensed its technology to others), Nippon
Sheet Glass, Saint-Gobain Glass, Polytronix, Inc. and 3M (which
has also reportedly discontinued its liquid crystal film making
operations).  These windows are very expensive (having an
estimated installed cost of as much as $200-250 per square foot
where SPD windows have been sold for a fraction of this price), and
only change from a cloudy opaque milky-white to a hazy clear state,
with no useful intermediate states.  As compared to liquid crystal
windows, SPD smart windows should:

-     be less expensive to produce;
-     have less haze;
-     operate over a wider temperature range;
-     use less power;
-     permit an infinite number of intermediate states between a
-     transparent state and a dark blue state, rather than being just
-     "on" or "off" like LC windows.

     In the flat panel display market, the Company also expects to
compete against various display technologies that are currently
being used commercially.  In particular, the Company expects its
SPD technology to compete on the basis of the performance
characteristics with liquid crystal displays ("LCDs") and organic
light emitting diodes ("OLEDs").  An LCD is generally similar in
construction to an SPD display, but instead of a liquid or film
suspension, utilizes an organic material called a liquid crystal
which, although comprised of molecules that flow like a liquid, has
some of the characteristics of solid crystals.  Like SPD displays,
LCDs are "passive" devices which do not generate light, but merely
reflect or modulate existing light. OLEDs emit light rather than
transmit it, and unlike LCDs but similar to SPD displays, OLEDs
promise to have wide viewing angles and low power consumption.
However, several technological and manufacturing hurdles remain
in the production of OLEDs including limited life expectancy,
sensitivity to degradation from exposure to air and water, and cost.
The market for flat panel displays was estimated by others to have
been approximately $30.5 billion for 2002.  The Company believes
that some of its licensees may begin to challenge OLEDs and liquid
crystal displays with SPDs for part of the flat panel display market
during the next several years.

     The Company believes that its SPD light valves and related
technology has significant advantages over existing display devices
and related technology.  In comparison to existing twisted nematic
type LCDs, the Company's SPD displays are believed to have:

-     higher contrast and brightness;
-     a wider angle of view;
-     lower estimated production costs;
-     a less complex fabrication procedure;
-     the ability to function over a wider temperature range;
-     the ability to make displays without using sheet polarizers or
      alignment layers;
-     lower light loss and a corresponding reduction in backlighting
      requirements.

With respect to other types of displays which emit their own light,
such as light-emitting diodes (LEDs) and cathode ray tubes (CRTs),
the Company's SPD light valves should have the advantages of
lower power consumption and make possible larger displays that are
easier to read in bright light.

     LCDs and other types of displays, liquid crystal windows, as
well as electrochromic self-dimmable rear-view mirrors, are already
on the market, whereas products incorporating SPD technology (as
well as electrochromic windows) have only begun to appear in the
marketplace, so long-term durability and performance of SPD light
valves have not yet been fully ascertained.  The companies
manufacturing LCD and other display devices, liquid crystal
windows, and electrochromic self-dimmable rear-view mirrors and
windows, have substantially greater financial resources and
manufacturing experience than the Company.  There is no assurance
that comparable systems having the same advantages of the
Company's SPD light valves could not be developed by competitors
at a lower cost or that other products could not be developed which
would render the Company's products difficult to market or
technologically or otherwise obsolete.

     In each of the last three fiscal years the Company has devoted
substantially all of its time to the development of one class of
products, namely SPD light control technology, and therefore
revenue analysis by class is not provided herein.

     The Company does not believe that future sales will be
seasonal in any material respect.  Due to the nature of the
Company's business operations and the fact that the Company is not
presently a manufacturer, there is no backlog of orders for the
Company's products.

     The Company believes that compliance with federal, state and
local provisions which have been enacted or adopted regulating the
discharge of materials into the environment, or otherwise relating to
the protection of the environment, will not have a material effect
upon the capital expenditures, earnings and competitive position of
the Company.  The Company has no material capital expenditures
for environmental control facilities planned for the remainder of its
current fiscal year or its next succeeding fiscal year.

Research and Development

     As a result of the Company's research and development efforts,
the Company believes that its SPD light valves will be usable in a
number of commercial products.  Such products may include one or
more of the following fields: "smart" windows, variable light
transmission eyewear such as sunglasses and goggles, self-dimmable
automotive sunroofs, sunvisors and mirrors, and instruments and other
information displays that use digits, letters, graphic images, or other
symbols to supply information, including scientific instruments,
aviation instruments, automobile dashboard displays and, if certain
improvements can be made in various features of the Company's SPD
light valves, portable computer displays and flat panel television
displays.  The Company believes that most of its research and
development efforts have applicability to products that may
incorporate the Company's technology.  Based upon the current SPD-
Smart products being sold by various of its licensees, the Company
believes that the state of development of its technology is sufficiently
advanced, but that further improvements will result in accelerated
market penetration.  The Company intends to continue its research and
development efforts for the foreseeable future to improve its SPD light
valve technology and thereby assist our licensees in the product
development, sales and marketing of various existing and new SPD-
Smart products.

     The Company has devoted most of the resources it has heretofore
expended to research and development activities with the goal of
producing commercially viable light valves and already has developed
working prototypes of its SPD light valves for several different
applications including smart windows, mirrors and flat panel displays.

Research Frontiers' main goals in its research and development are:

-         developing wider ranges of light transmission and quicker
          switching speeds;
-         developing different colored particles;
-         reducing the voltage required to operate SPDs; and
-         obtaining data and developing improved materials regarding
          environmental stability and longevity.

Research Frontiers incurred about $1,909,000, $1,859,000, and
$2,223,000 during the years ended December 31, 2003, 2002, and
2001, respectively, for research and development.  Research Frontiers
plans to engage in substantial continuing research and development
activities.

Patents and Proprietary Information

     The Company has 29 United States patents in force, and three
United States patent applications are pending.  The Company's United
States patents expire at various dates from 2006 through 2021.  The
Company has approximately 208 issued foreign patents and 198
foreign and international patent applications pending.  The Company's
foreign patents expire at various dates from 2005 through 2021. The
Company believes that its SPD light valve technology is adequately
protected by its patent position and by its proprietary technological
know-how.  However, the validity of the Company's patents has never
been contested in any litigation.  To a lesser extent, the Company
relies on trade secrets and nondisclosure agreements to protect its
technology.  The Company generally requires any employee,
consultant, or licensee having access to its confidential information to
execute an agreement whereby such person agrees to keep such
information confidential.

Rights Plan

     In February 2003, the Company's Board of Directors adopted a
Stockholders' Rights Plan and declared a dividend distribution of one
Right for each outstanding share of Company common stock to
stockholders of record at the close of business on March 3, 2003.
Subject to certain exceptions listed in the Rights Plan, if a person or
group has acquired beneficial ownership of, or commences a tender or
exchange offer for, 15% or more of the Company's common stock,
unless redeemed by the Company's Board of Directors, each Right
entitles the holder (other than the acquiring person) to purchase from
the Company $120 worth of common stock for $60.  If the Company
is merged into, or 50% or more of its assets or earning power is sold
to, the acquiring company, the Rights will also enable the holder
(other than the acquiring person) to purchase $120 worth of common
stock of the acquiring company for $60.  The Rights will expire at the
close of business on February 18, 2013, unless the Rights Plan is
extended by the Company's Board of Directors or unless the Rights
are earlier redeemed by the Company at a price of $.0001 per Right.
The Rights are not exercisable during the time when they are
redeemable by the Company.  The above description highlights some
of the features of the Company's Rights Plan and is not a complete
description of the Rights Plan. A more detailed description and a copy
of the Rights Plan is available from the Company upon request.

ITEM 2.   PROPERTIES

     The Company recently expanded its facilities, extended its
lease, and currently occupies approximately 9,500 square feet of
space at a minimum annual rental of which in 2003 was
approximately $143,500 for its executive office and research facility
at 240 Crossways Park Drive, Woodbury, New York 11797 under a
lease expiring January 31, 2014. The Company believes that its
space, including its laboratory facilities, is adequate for its present
needs.

ITEM 3.   LEGAL PROCEEDINGS

     There are no legal proceedings pending by or against the Company.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None

                                  PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY,
         RELATED STOCK HOLDER MATTERS AND ISSUER
         PURCHASES OF EQUITY SECURITIES

(a) Market Information

    (1)  The Company's common stock is traded on the NASDAQ
National Market. As of March 15, 2004, there were 12,791,330
shares of common stock outstanding.

    (2)  The following table sets forth the range of the high and
low selling prices (as provided by the National Association of
Securities Dealers) of the Company's common stock for each
quarterly period within the past two fiscal years:

         Quarter Ended                Low            High
         March 31, 2002               15.31          21.00
         June 30, 2002                11.09          18.60
         September 30, 2002            6.35          15.25
         December 31, 2002             7.81          11.76
         March 31, 2003                4.28           9.51
         June 30, 2003                 5.82          14.09
         September 30, 2003           11.09          17.20
         December 31, 2003             8.33          12.66

          These quotations may reflect inter-dealer prices, without
          retail mark-up, mark-down, or commission, and may not
          necessarily represent actual transactions.

(b) Approximate Number of Security Holders

    As of March 15, 2004, there were 631 holders of record of the
Company's common stock.   The Company estimates that there are
approximately 9,000 beneficial holders of the Company's common
stock.

(c) Dividends

    The Company did not pay dividends on its common stock in
2003 and does not expect to pay any cash dividends in the
foreseeable future.  There are no restrictions on the payment of dividends.

(d) Issuer Purchases of Equity Securities

    None.

ITEM 6.       SELECTED FINANCIAL DATA

    The following table sets forth selected data regarding the
Company's operating results and financial position.  The data
should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations and the
consolidated financial statements and notes thereto, all of which are
contained in this Annual Report on Form 10-K.

                                        Year ended December 31,
                             2003        2002     2001       2000      1999
Statement of Operations Data:
 Fee income              $  258,187 $  217,519 $  142,002 $  333,652 $  128,096
 Operating expenses (1)   2,537,317  2,631,139  3,155,305  3,375,638  2,008,611
 Research&development(1)  1,908,753  1,859,030  2,223,425  2,270,584  1,567,758
 Charge for reduction
  in value of investment
  in SPD Inc.(2)            615,200         --         --         --         --
 Non-recurring non-cash
  compensation expense (3)       --         --         --  3,133,748    671,052
                          5,061,270  4,490,169  5,378,730  8,779,970  4,247,421
 Operating loss          (4,803,083)(4,272,650)(5,236,728)(8,446,318)(4,119,325)
 Net investment income(4)    30,775    321,534    696,058    878,518    386,303

 Net loss                (4,772,308)(3,951,116)(4,540,670)(7,567,800)(3,733,022)
 Basic and diluted net loss
 per common share              (.38)      (.33)      (.38)      (.63)      (.34)
 Dividends per share             --         --         --         --         --

                                             As of December 31,
                             2003      2002       2001       2000        1999
Balance Sheet Data:
 Total current assets   $ 5,322,083 $5,293,629 $8,272,677 $15,358,819 $9,695,137
 Total assets             5,690,270  6,267,051  9,324,902  15,729,127 10,037,063
 Long-term debt, including
  accrued interest               --         --         --          --         --
Total shareholders'equity 5,469,427  5,974,466  9,049,920  14,737,917  9,507,736

(1)  Research and development expenses for 1999 include $289,177 paid by
     the Company for 74 patents and patent applications acquired from
     Glaverbel, SA. During 2002, the Company reclassified costs associated
     with patents and patent applications from research and development
     expenses to operating expenses.  The amount of patent costs reclassified
     from research and development expense to operating expense for the
     years ended December 31, 2001, 2000, and 1999 was approximately
     $411,000, $348,000 and $404,000, respectively.

(2)  Reflects a non-cash charge against income of $255,200 recorded by the
     Company in the first quarter of 2003 to reflect a reduction in the value
     of its investment in SPD Inc. determined based upon recent financing
     activity of SPD Inc.  The Company also recorded a further non-cash
     charge against income of $360,000 as of the end of 2003 to reflect a
     reduction in the value of its investment in SPD Inc. determined based
     upon its review of the financial position and results of operations of
     SPD Inc. as of and for the year ended December 31, 2003.

(3)  During 1999, the Company granted 237,800 contingent performance
     options to employees, which vested only if a certain performance
     milestone in the price of the Company's common stock was      achieved
     during 2000. The charges recorded as a result of the issuance of these
     performance options were calculated based upon changes in the
     Company's stock price as of the end of each quarter until the vesting
     date, and are non-cash compensation charges.

(4)  Net investment income for 2002 and 1999 includes $64,608 and
     $95,001, respectively, of interest income received from officers of the
     Company upon payment of notes receivable.

     ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Overview

     During 2003, the number of aircraft incorporating window shades
using SPD-Smart technology increased, and the number of additional
aircraft for which SPD-Smart electronic window shades have been
designed and engineered also increased during 2003.  In addition, the
two largest jet manufacturers in the world have announced plans to
include electronic smart window shades in their next-generation
aircraft.  In recent months, the Company has also seen that the amount
(in terms of surface area and dollar value) of SPD-Smart glass being
used in architectural projects has begun to increase as project
architects and developers begin to utilize more SPD-Smart glass in
their projects. Also, in late 2003, certain automakers have begun to
incorporate SPD-Smart glass in production and concept vehicles, with
some of these concept vehicles being exhibited at major auto shows.
There appears to be a growing trend towards using more glass in
architectural and automotive applications, including the introduction
of panoramic roof systems and larger sunroofs for transportation
vehicles.  SPD-Smart technology can provide effective shading, glare
control and heat management solutions for these larger glass areas.
SPD-Smart windows have also begun to be used in yachts as well. The
Company has also seen the adoption rate in terms of number of
licensees, as well as the size of the organizations becoming licensees
during 2003, increase. Also, products using SPD-Smart technology
have begun to appear much more frequently at trade shows,
conferences, and industry events, with such products not only being
exhibited by our licensees, but also by their customers and by original
equipment manufacturers. While there can be no assurance that these
trends will continue, to the extent that they do continue, they each
should have a beneficial effect on future fee income for the Company.

     Critical Accounting Policies

     The following accounting policies are important to understanding
our financial condition and  results of operations and should be read as
an integral part of the discussion and analysis of the results of our
operations and financial position.  For additional accounting policies,
see note 2 to our consolidated financial statements, "Summary of
Significant Accounting Policies."

  The Company has entered into a number of license agreements
covering potential products using the Company's SPD technology.
The Company receives minimum annual royalties under certain license
agreements and records fee income on a ratable basis each quarter.  In
instances when sales of licensed products by its licensees exceed
minimum annual royalties, the Company recognizes fee income as the
amounts have been earned.  Certain of the fees are accrued by, or paid
to, the Company in advance of the period in which they are earned
resulting in deferred revenue.

    The Company expenses costs relating to the development or
acquisition of patents due to the uncertainty of the recoverability of
these items.

    All of our research and development costs are charged to
operations as incurred.  Our research and development expenses
consist of costs incurred for internal and external research and
development. These costs include direct and indirect overhead
expenses.

    The Company has historically used the Black-Scholes option-
pricing model to determine the estimated fair value of each option
grant. The Black-Scholes model includes assumptions regarding
dividend yields, expected volatility, expected lives, and risk-free
interest rates. These assumptions reflect our best estimates, but these
items involve uncertainties based on market conditions generally
outside of our control.  As a result, if other assumptions had been used
in the current period, stock-based compensation expense could have
been materially impacted.  Furthermore, if management uses different
assumptions in future periods, stock-based compensation expense
could be materially impacted in future years.

      On occasion, the Company may issue to consultants either
options or warrants to purchase shares of common stock of the
Company at specified share prices.  These options or warrants may
vest based upon specific services being performed or performance
criteria being met.    In accordance with Emerging Issues Task Force
Issue 96-18, Accounting for Equity Instruments that are Issued to
Other than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services, the Company would be required to record
consulting expenses based upon the fair value of such options or
warrants on the date that such options or warrants vest as determined
using a Black-Scholes option pricing model. Depending upon the
difference between the exercise price and the market price of the
Company's common stock on the date that such options or warrants
vest, the amount of non-cash expenses that could be recorded as a
result of the vesting of such options or warrants can be material.

    The Company applies the cost method of accounting for its
minority equity interest in SPD Inc., a subsidiary of Hankuk Glass
Industries, Inc.  Because no public market exists for the common stock
of SPD Inc., the Company reviews the operating performance,
financing and forecasts for such entity in assessing the net realizable
value of this investment.  As a result, any significant adverse change
in the above could lead to an impairment charge in future periods.

    The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires us to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements,
and reported amounts of revenues and expenses during the reporting
periods.  Actual results could differ from these estimates.  An example
of a critical estimate is the full valuation allowance for deferred taxes
that was recorded based on the uncertainty that such tax benefits will
be realized in future periods.

Results of Operations

Year ended December 31, 2003 Compared to the Year ended December 31, 2002

  The Company's fee income from licensing activities for 2003
was $258,187, as compared to $217,519 for 2002. This increase was
primarily a result of new license agreements entered into in 2003 and
scheduled increases in minimum annual royalties paid by some end-
product licensees.  Certain license fees, which are paid to the Company
in advance of the accounting period in which they are earned resulting
in the recognition of deferred revenue.  Such revenue will be
recognized as fee income in future periods. Also, licensees may offset
some or all of their royalty payments on sales of licensed products for
a given period by applying these advance payments towards such
earned royalty payments.

  Operating expenses decreased by $93,822 for 2003 to $2,537,317
from $2,631,139 for  2002. This decrease was primarily the result of
decreased expenses in connection with market research, public
relations, consulting, travel and patent expenses, partially offset by
increases in salaries, legal fees, reserves against the collection of future
receivables, non-cash directors expenses resulting from the cashless
exercise of stock options of $40,987, and insurance costs.

  Research and development expenditures increased by $49,723 to
$1,908,753 for 2003 from $1,859,030 for 2002. This increase was
primarily the result of increased payroll expenses primarily from
performance bonuses paid to non-management employees and higher
insurance costs.

  Investment income for 2003 was $30,775 as compared to a net
gain from its investing activities of $256,926 for 2002. This difference
was primarily due to a lower level of average investment balances in
2003 compared to 2002, and lower interest rates. In addition, during
2002 the Company recorded $64,608 of interest income on notes
receivable from its officers which were repaid in the fourth quarter,
while no such interest income was recorded for 2003 as no loans to
officers were outstanding.

  During 2003, the Company recorded total non-cash accounting
charges of $615,200 against income to reflect a reduction in the value
of its investment in SPD Inc. These non-cash charges were determined
as follows: During the first quarter of 2003, the Company recorded a
non-cash charge against income of $255,200 to reflect a reduction in
the value of its investment in SPD Inc. determined based upon recent
financing activity of SPD Inc.  The Company also recorded a further
non-cash charge against income of $360,000 as of the end of 2003 to
reflect a reduction in the value of its investment in SPD Inc.
determined based upon its review of the financial position and results
of operations of SPD Inc. as of and for the year ended December 31,
2003.

  As a consequence of the factors discussed above, the Company's
net loss was $4,772,308 ($0.38 per share) for 2003 as compared to
$3,951,116 ($0.33 per share) for 2002.

Year ended December 31, 2002 Compared to the Year ended December 31, 2001

  The Company's fee income from licensing activities for 2002
was $217,519, as compared to $142,002 for 2001.  This increase in fee
income was primarily the result of new license agreements entered into
in 2002 and minimum annual royalties paid by end-product licensees.
In addition, the Company recorded a small amount of royalty income
related to sales of licensed products by its licensees in the fourth
quarter of 2002 which exceeded their minimum annual royalty
payments. Certain license fees, which are paid to the Company in
advance of the accounting period in which they are earned resulting in
the recognition of deferred revenue.  Such revenue will be recognized
as fee income in future periods. Also, licensees may offset some or all
of their royalty payments on sales of licensed products for a given
period by applying these advance payments towards such earned
royalty payments.

  Operating expenses decreased by $524,166 for 2002 to
$2,631,139 from $3,155,305 for  2001. This decrease was primarily
the result of lower payroll, patent, insurance, office, public relations,
and directors expenses, offset somewhat by increased legal, consulting
and marketing expenses.

  Research and development expenditures decreased by $364,395
to $1,859,030 for  2002 from $2,223,425 for 2001. This decrease was
primarily the result of lower payroll expenses and materials costs.

  Operating expenses and research and development expenses
listed above included amounts paid under a performance bonus plan of
$496,790 and $288,710, respectively, during  2001. No amounts were
accrued under a similar bonus plan with respect to 2002.

  The Company's net gain from its investing activities for 2002
was $256,926  as compared to a net gain from its investing activities
of $696,058 for 2001. This difference was primarily due to a lower
level of average investment balances in 2002 compared to 2001, lower
prevailing interest rates, and a decline in the market value of an equity
security. In addition, during 2002 the Company recorded $64,608 of
interest income on notes receivable from its officers which were repaid
in the fourth quarter.

  As a consequence of the factors discussed above, the Company's
net loss was $3,951,116 ($0.33 per share) for 2002 as compared to
$4,540,670 ($0.38 per share) for 2001.

Financial Condition, Liquidity and Capital Resources

  During 2003, the Company's cash and cash equivalent balance
decreased by $45,281,  principally as a result of cash used to fund the
Company's operating activities of $4,124,981, offset by $4,201,757 of
proceeds received, net of expenses, from the issuance of common stock
upon the exercise of options and warrants. At December 31, 2003, the
Company had working capital of $5,101,240 and its shareholders'
equity was $5,469,427.

  The Company occupies premises under an operating lease
agreement which expires on January 31, 2014 and requires minimum
annual rent which rises over the term of the lease to approximately
$138,269.

  On October 1, 1998, the Company announced that Ailouros Ltd.,
a London-based institutional money management fund, committed to
purchase up to $15 million worth of  common stock of the Company
through December 31, 2001.  This commitment is in the form of a
Class A Warrant issued to Ailouros Ltd. which gives the Company the
option in any three-month period to deliver a put notice to Ailouros
requiring them to purchase an amount of common stock specified by
the Company at a price equal to the greater of (A) 92% of the seven-
day average trading price per share of common stock, or (B) a
minimum or "floor" price per share set by the Company from time to
time.  The pricing was initially subject to an overall cap of $15 per
share, which cap has now been eliminated by mutual agreement so that
the Company may put stock to Ailouros at selling prices in excess of
$15 per share.  However, the Company is not required to sell any
shares under the agreement. Before the beginning of each of a series
of three-month periods specified by the Company, the Company
determines the amount of common stock that the Company wishes to
issue during such three-month period.  The Company also sets the
minimum selling or "floor" price, which can be reset by the Company
in its sole discretion prior to the beginning of any subsequent three-
month period.  Therefore, at the beginning of each three-month period,
the Company will determine how much common stock, if any, is to be
sold  (the amount of which can range from $0 to $1.5 million during
such three-month period), and the minimum selling price per share. In
March 2000, Ailouros agreed to expand its commitment beyond the
original $15 million, thereby giving the Company the right to raise
additional funds from Ailouros so long as the Company does not have
to issue more shares than were originally registered with the Securities
and Exchange Commission, and in December 2001 the expiration date
of the Class A Warrant was extended to December 31, 2003. In
December 2003, this expiration date for the Class A Warrant was
further extended to December 31, 2005.  As of March 15, 2004, the
Company issued the remaining 99,417 shares registered and available
for issuance under the Class A Warrant, resulting in net proceeds of
approximately $1 million in fiscal 2004. As noted below, while no
additional funding is projected to be required by the Company in order
to maintain its current levels of expenditures for research and
development, market development and other operations until at least
the first quarter of 2005, the Company and Ailouros, which has been
the Company's principal source of capital funding since 1999, are in
discussions regarding an additional equity investment by Ailouros to
raise additional working capital for the Company.

  During the second quarter of 2001, the Company, through its
wholly-owned subsidiary, SPD Enterprises, Inc., invested
approximately $750,000 for a minority equity interest in SPD Inc., a
subsidiary of Hankuk Glass Industries Inc., Korea's largest glass
manufacturer, which is dedicated exclusively to the production of
suspended particle device (SPD) light-control film and a wide variety
of end-products using SPD film. In April 2003, the Company's
wholly-owned subsidiary, SPD Enterprises, Inc., invested $74,902 in
SPD Inc., raising its equity ownership from 6.67% to 6.91%. SPD
Inc.'s parent company invested at the same time and at the same price,
$748,931, raising its equity ownership in SPD Inc. from 66.67% to
69.09%. During 2003, the Company recorded total non-cash
accounting charges of $615,200 against income to reflect a reduction
in the value of its investment in SPD Inc. These non-cash charges were
determined as follows: During the first quarter of 2003, the Company
recorded a non-cash charge against income of $255,200 to reflect a
reduction in the value of its investment in SPD Inc. determined based
upon recent financing activity of SPD Inc.  The Company also
recorded a further non-cash charge against income of $360,000 as of
the end of 2003 to reflect a reduction in the value of its investment in
SPD Inc. determined based upon its review of the financial position
and results of operations of SPD Inc. as of and for the year ended
December 31, 2003.

     The Company expects to use its cash and the proceeds from
maturities of its investments to fund its research and development of
SPD light valves and for other working capital purposes.  The
Company's working capital and capital requirements depend upon
numerous factors, including the results of research and development
activities, competitive and technological developments, the timing and
cost of patent filings, the development of new licensees and changes
in the Company's relationships with its existing licensees.  The degree
of dependence of the Company's working capital requirements on each
of the foregoing factors cannot be quantified; increased research and
development activities and related costs would increase such
requirements; the addition of new licensees may provide additional
working capital or working capital requirements, and changes in
relationships with existing licensees would have a favorable or
negative impact depending upon the nature of such changes.  Based
upon existing levels of cash expenditures, assumed ten percent annual
increases therein, existing cash reserves and budgeted revenues, the
Company believes that it would not require additional funding for the next 13
months.There can be no assurance that expenditures will not exceed the
anticipated amounts or that additional financing, if required, will be
available when needed or, if available, that its terms will be favorable
or acceptable to the Company.  The Company will need to raise
additional capital no later than the first quarter of 2005 if operations,
including research and development and marketing, are to be
maintained at current levels. If the Company cannot raise additional
funds, it will be required to reduce expenses during 2004. Eventual
success of the Company and generation of positive cash flow will be
dependent upon the extent of  commercialization of products using the
Company's technology by the Company's licensees and payments of
continuing royalties on account thereof.

Inflation

     The Company does not believe that inflation has a significant
impact on its business.

New Accounting Standards

     In April 2003, the FASB determined that stock-based
compensation should be recognized as a cost in the financial
statements of a company, and that such costs be measured according
to the fair value of the stock options.  The FASB has not as yet
determined the methodology of calculating fair value and plans to issue
an accounting standard that would become effective in 2005. The
Company will continue to monitor communications on this subject
from the FASB in order to determine the impact on the Company's
consolidated financial statements.

Related Party Transactions

     Statement of Financial Accounting Standards No. 57, "Related
Party Disclosures" requires the Company to identify and describe
material transactions involving related persons or entities and to
disclose information necessary to understand the effects of such
transactions on our consolidated financial statements. The Company
loaned two officers an aggregate of $152,961. Each of the
aforementioned loans were made in April 1997 or prior thereto; were
due in January 2003; relate to the purchase of common stock of the
Company; were collateralized by the pledge of shares of common
stock of the Company; could be prepaid in part or in full without
notice or penalty; were represented by a promissory note which bears
interest at a rate per annum equal to the broker call rate in effect on the
first day of each calendar quarter; and permited repayment of the loan
by delivery of securities of the Company having a fair market value
equal to the balance of the loan outstanding. On November 8, 2002,
one of these officers, Joseph M. Harary, paid the Company $192,171
in cash in payment in full of all principal and accrued interest on the
loans made by the Company to Mr. Harary. On December 16, 2002,
the other officer, Robert L. Saxe, paid the Company $25,398 in cash
in payment in full of all principal and accrued interest on the loans
made by the Company to Mr. Saxe.

Forward Looking Statements

     The information set forth in this Report and in all publicly
disseminated information about the Company, including the narrative
contained in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" above, includes "forward-looking
statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and is subject to the safe harbor
created by that section. Readers are cautioned not to place undue
reliance on these forward-looking statements as they speak only as of
the date hereof and are not guaranteed.

ITEM 7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company invests available cash and cash equivalents in
money market funds or in short-term U.S. treasury securities with
maturities that are generally two years or less.  Although the rate of
interest paid on such investments may fluctuate over time, each of the
Company's investments, other than in money market funds whose
interest yield varies, is made at a fixed interest rate over the duration of
the investment.  Accordingly, the Company does not believe it is
materially exposed to changes in interest rates as it generally holds
these treasury securities until maturity.

     The Company does not have any sales, purchases, assets or
liabilities determined in currencies other than the U.S. dollar, and as
such, is not subject to foreign currency exchange risk.

ITEM 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The consolidated financial statements listed in Item 15(a)(1) and
(2) are included in this Report beginning on page F-1.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
          ON ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

ITEM 9A.  CONTROLS AND PROCEDURES

     We maintain a system of controls and procedures designed to
provide reasonable assurance as to the reliability of the financial
statements and other disclosures included in this report, as well as to
safeguard assets from unauthorized use or disposition. We evaluated
the effectiveness of the design and operation of our disclosure controls
and procedures under the supervision and with the participation of
management, including our Chief Executive Officer and Chief
Financial Officer, within 90 days prior to the filing date of this report.
Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures
are effective in timely alerting them to material information required to
be included in our periodic Securities and Exchange Commission
filings. No significant changes were made to our internal controls or
other factors that could significantly affect these controls subsequent
to the date of their evaluation.

                                 PART III

ITEM 10.       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Company has adopted a code of ethics applicable to its Chief
Executive Officer, Chief Operating Officer, Treasurer and Chief
Financial Officer, any Vice President and other employees of the
Company with important roles in the financial reporting process.
This Code of Ethics was adopted by the entire Board of Directors of
the Company, including all of its Audit Committee members, in
March 2004 in accordance with the requirements of the Sarbanes
Oxley Act. The code of ethics is available on the Company's website
at www.SmartGlass.com and is also filed as an exhibit to this
Annual Report on Form 10-K. The Company intends to satisfy the
disclosure requirement under Item 10 of Form 8-K regarding any
amendment to, or waiver from, a provision of this code of ethics by
posting such information on the website specified above.

The other information required by this Item 10 is incorporated by
reference to the Company's definitive Proxy Statement to be filed
with the Commission on or before April 30, 2004, in connection
with the Company's Annual Meeting of Stockholders scheduled to
be held on June 10, 2004.

ITEM 11.       EXECUTIVE COMPENSATION

     The information required by this Item 11 is incorporated by
reference to the Company's definitive Proxy Statement to be filed
with the Commission on or before April 30, 2004, in connection
with the Company's Annual Meeting of Stockholders scheduled to
be held on June 10, 2004.  Notwithstanding anything to the contrary
set forth herein or in any of the Company's past or future filings with
the Securities and Exchange Commission that might incorporate by
reference the Company's definitive Proxy Statement, in whole or in
part, the report of the compensation committee and the stock price
performance graph contained in such definitive Proxy Statement
shall not be incorporated by reference into this Annual Report on
Form 10-K or in any other such filings.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this Item 12 is incorporated by
reference to the Company's definitive Proxy Statement to be filed
with the Commission on or before April 30, 2004, in connection
with the Company's Annual Meeting of Stockholders scheduled to
be held on June 10, 2004.

ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this Item 13 is incorporated by
reference to the Company's definitive Proxy Statement to be filed
with the Commission on or before April 30, 2004, in connection
with the Company's Annual Meeting of Stockholders scheduled to
be held on June 10, 2004.

                                  PART IV

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information required by this Item 14 is incorporated by
reference to the Company's definitive Proxy Statement to be filed
with the Commission on or before April 30, 2004, in connection
with the Company's Annual Meeting of Stockholders scheduled to
be held on June 10, 2004.

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES  AND REPORTS ON FORM 8-K

     (a)(1) and (2)  Financial Statements and Financial Statement Schedules

     The following consolidated financial statements of Research
Frontiers Incorporated, the related notes thereto, together with the
report thereon of KPMG  LLP are filed under Item 8 of this Report.

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . .       F-1

Consolidated Financial Statements:

    Consolidated Balance Sheets,
         December 31, 2003 and 2002. . . . . . . . . . . . . . . . .       F-2

    Consolidated Statements of Operations,
         Years ended December 31, 2003, 2002 and 2001. . . . . . . .       F-3

    Consolidated Statements of Shareholders' Equity,
         Years ended December 31, 2003, 2002 and 2001. . . . . . . .       F-4

    Consolidated Statements of Cash Flows,
         Years ended December 31, 2003, 2002 and 2001. . . . . . . .       F-5

Notes to Consolidated Financial Statements . . . . . . . . . . . . .       F-6

     All schedules are omitted because they are not applicable, or
not required, or because the required information is included in the
consolidated financial statements or notes thereto.

(a)(3)     Exhibits                                                    Page

3.1     Restated Certificate of Incorporation of the Company.
        Previously filed as  Exhibit 3.1 to the Company's Quarterly
        Report on Form 10-Q for the fiscal quarter ended June 30,
        1994, and incorporated herein by reference.

3.2     Amended and Restated Bylaws of the Company.  Previously
        filed as an Exhibit to the Company's Annual Report on Form
        10-K for the fiscal year ended December 31, 1993 and
        incorporated herein by reference.

4.1     Form of Common Stock Certificate. Previously filed as an
        Exhibit to the Company's Registration Statement on Form S-
        18 (Reg. No. 33-5573NY), declared effective by the
        Commission on July 8, 1986, and incorporated herein by
        reference.

4.2.1   Rights Agreement dated as of February 16, 1993 between
        Research Frontiers Incorporated and Continental Stock
        Transfer & Trust Company, as Rights Agent, which includes
        as Exhibit A thereto the Form of Rights Certificate.
        Previously filed as an Exhibit to the Company's Registration
        Statement on Form 8-A dated February 16, 1993, and
        incorporated herein by reference.

4.2.2   Rights Agreement dated as of February 18, 2003 between
        Research Frontiers Incorporated and Continental Stock
        Transfer & Trust Company, as Rights Agent, which includes
        as Exhibit A thereto the Form of Rights Certificate.
        Previously filed as an Exhibit to the Company's Registration
        Statement on Form 8-A dated February 24, 2003, and
        incorporated herein by reference.

 4.3    Subscription Agreement between Research Frontiers and
        Ailouros Ltd. dated as of October 1, 1998, and related Class
        A Warrant and Class B Warrant between Research Frontiers
        and Ailouros Ltd. dated as of October 1, 1998.  Previously
        filed as an Exhibit to the Company's Registration Statement
        on Form S-3 (No. 333-65219) dated October 1, 1998, and
        incorporated herein by reference.

10.1*   Amended and Restated Employment Contract effective
        January 1, 1989 between the Company and Robert L. Saxe.
        Previously filed as an Exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        1993 and incorporated herein by reference.

10.2*   Amended and Restated 1992 Stock Option Plan. Previously
        filed as Exhibit 4 to the Company's Registration Statement on
        Form S-8 (Reg. No. 33-86910) filed with the Commission on
        November 30, 1994, and incorporated herein by reference.

10.3*   1998 Stock Option Plan, as amended.  Previously filed as an
        Exhibit to the Company's Definitive Proxy Statement dated
        April 30, 1998 filed with the Commission on April 29, 1998,
        1994, and incorporated herein by reference.

10.4*   Form of Stock Option Agreement between the Company and
        recipients of stock options issued pursuant to the Company's
        Stock Option Plans. Previously filed as part of Exhibits 4.1,
        4.2, and 4.3 to the Company's Registration Statement on
        Form S-8 (Reg. No. 33-53030) filed with the Commission on
        October 6, 1992, and incorporated herein by reference.

10.5    Lease Agreement dated November 7, 1986, between the
        Company and Industrial & Research Associates Co.
        Previously filed as an exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        1986 and incorporated herein by reference.

10.5.1  First Amendment to Lease dated November 26, 1991 between
        the Company and Industrial and Research Associates Co.
        Previously filed as an Exhibit to Amendment No. 1 to the
        Company's Registration Statement on Form S-1 (Reg. No.
        33-43768) declared effective by the Commission on
        December 17, 1991, and incorporated herein by reference.

10.5.2  Second Amendment to Lease dated March 11, 1994 between
        the Company and Industrial and Research Associates Co.
        Previously filed as an exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        1993 and incorporated herein by reference.

10.5.3  Third Amendment to Lease dated July 14, 1998 between the
        Company and Industrial and Research Associates Co.
        Previously filed as an exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        1998 and incorporated herein by reference.

10.5.4  Fourth Amendment to Lease dated January 13, 2004 between
        the Company and Industrial and Research Associates Co.
        Filed herewith.

10.6    License Agreement effective as of August 2, 1995 between
        the Company and General  Electric Company.  Previously
        filed as an Exhibit to the Company's Current Report on Form
        8-K dated August 2, 1995 with portions omitted pursuant to
        the Registrant's request for confidential treatment and filed
        separately with the Securities and Exchange Commission, and
        incorporated herein by reference.

10.7    License Agreement effective as of April 29, 1996 between the
        Company and Glaverbel, S.A.  Previously filed as an Exhibit
        to the Company's Quarterly Report on Form 10-Q for the
        fiscal quarter ended March 31, 1996 with portions omitted
        pursuant to the Registrant's request for confidential treatment
        and filed separately with the Securities and Exchange
        Commission, and incorporated herein by reference.

10.8    License Agreement effective as of January 18, 1997 between
        the Company and Material Sciences Corporation.  Previously
        filed as an Exhibit to the Company's Current Report on Form
        8-K dated March 3, 1997 with portions omitted pursuant to
        the Registrant's request for confidential treatment and filed
        separately with the Securities and Exchange Commission, and
        incorporated herein by reference.

10.9    License Agreement effective as of March 31, 1997 between
        the Company and Hankuk Glass Industries, Inc.  Previously
        filed as an Exhibit to the Company's Quarterly Report on
        Form 10-Q for the fiscal quarter ended September 30, 1997
        with portions omitted pursuant to the Registrant's request for
        confidential treatment and filed separately with the Securities
        and Exchange Commission, and incorporated herein by
        reference.

10.10   License Agreement effective as of August 8, 1997 between
        the Company and Orcolite, a Unit of Monsanto Company.
        Previously filed as an Exhibit to the Company's Quarterly
        Report on Form 10-Q for the fiscal quarter ended September
        30, 1997 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with
        the Securities and Exchange Commission, and incorporated
        herein by reference.

10.11   License Agreement effective as of June 25, 1999 between the
        Company and Dainippon Ink and Chemicals, Incorporated.
        Previously filed as an Exhibit to the Company's Quarterly
        Report on Form 10-Q for the fiscal quarter ended June 30,
        1999 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with
        the Securities and Exchange Commission, and incorporated
        herein by reference.

10.12   License Agreement effective as of August 9, 1999 between
        the Company and Hitachi Chemical Co., Ltd.  Previously
        filed as an Exhibit to the Company's Quarterly Report on
        Form 10-Q for the fiscal quarter ended September 30, 1999
        with portions omitted pursuant to the Registrant's request for
        confidential treatment and filed separately with the Securities
        and Exchange Commission, and incorporated herein by
        reference.

10.13   License Agreement effective as of December 3, 1999 between
        the Company and Global Mirror GmbH & Co. KG.
        Previously filed as an Exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        1999 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with
        the Securities and Exchange Commission, and incorporated
        herein by reference.

10.14   License Agreement effective as of December 13, 1999
        between the Company and Global Mirror GmbH & Co. KG.
        Previously filed as an Exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        1999 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with
        the Securities and Exchange Commission, and incorporated
        herein by reference.

10.15   License Agreement effective as of March 21, 2000 between
        the Company and ThermoView Industries, Inc. Previously
        filed as an Exhibit to the Company's Annual Report on Form
        10-K for the fiscal year ended December 31, 1999 with
        portions omitted pursuant to the Registrant's request for
        confidential treatment and filed separately with the Securities
        and Exchange Commission, and incorporated herein by
        reference.

10.16   License Agreement effective as of May 23, 2000 between the
        Company and Polaroid Corporation.  Previously filed as an
        Exhibit to the Company's Quarterly Report on Form 10-Q for
        the fiscal quarter ended June 30, 2000 with portions omitted
        pursuant to the Registrant's request for confidential treatment
        and filed separately with the Securities and Exchange
        Commission, and incorporated herein by reference.

10.17   License Agreement effective as of February 16,2001 between
        the Company and AP Technoglass Co.  Previously filed as an
        Exhibit to the Company's Annual Report on Form 10-K for
        the fiscal year ended December 31, 2001 with portions
        omitted pursuant to the Registrant's request for confidential
        treatment and filed separately with the Securities and
        Exchange Commission, and incorporated herein by reference.

10.18   License Agreement effective as of March 21, 2001 between
        the Company and InspecTech Aero Service, Inc.  Previously
        filed as an Exhibit to the Company's Annual Report on Form
        10-K for the fiscal year ended December 31, 2001 with
        portions omitted pursuant to the Registrant's request for
        confidential treatment and filed separately with the Securities
        and Exchange Commission, and incorporated herein by
        reference.

10.19   License Agreement effective as of March 28, 2001 between
        the Company and Film Technologies International, Inc.
        Previously filed as an Exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        2001 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with
        the Securities and Exchange Commission, and incorporated
        herein by reference.

10.20   License Agreement effective as of November 29, 2001
        between the Company and Avery Dennison Corporation.
        Previously filed as an Exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        2001 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with
        the Securities and Exchange Commission, and incorporated
        herein by reference.

10.21   License Agreement effective as of February 4, 2002 between
        the Company and BOS GmbH & Co. KG.  Previously filed as
        an Exhibit to the Company's Annual Report on Form 10-K
        for the fiscal year ended December 31, 2001 with portions
        omitted pursuant to the Registrant's request for confidential
        treatment and filed separately with the Securities and
        Exchange Commission, and incorporated herein by reference.

10.22   License Agreement effective as of March 11, 2002 between
        the Company and Isoclima S.p.A.  Previously filed as an
        Exhibit to the Company's Annual Report on Form 10-K for
        the fiscal year ended December 31, 2001 with portions
        omitted pursuant to the Registrant's request for confidential
        treatment and filed separately with the Securities and
        Exchange Commission, and incorporated herein by reference.

10.23   License Agreement effective as of July 2, 2002 between the
        Company and Isoclima S.p.A.  Previously filed as an Exhibit
        to the Company's Annual Report on Form 10-K for the fiscal
        year ended December 31, 2002 with portions omitted
        pursuant to the Registrant's request for confidential treatment
        and filed separately with the Securities and Exchange
        Commission, and incorporated herein by reference.

10.24   License Agreement effective as of August 19, 2002 between
        the Company and Razor's Edge Technologies, Inc.
        Previously filed as an Exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        2002 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with
        the Securities and Exchange Commission, and incorporated
        herein by reference.

10.25   License Agreement effective as of October 7, 2002 between
        the Company and American Glass Products (Glass
        Technology Investment Ltd.).  Previously filed as an Exhibit
        to the Company's Annual Report on Form 10-K for the fiscal
        year ended December 31, 2002 with portions omitted
        pursuant to the Registrant's request for confidential treatment
        and filed separately with the Securities and Exchange
        Commission, and incorporated herein by reference.

10.26   License Agreement effective as of October 7, 2002 between
        the Company and SPD Systems, Inc.  Previously filed as an
        Exhibit to the Company's Annual Report on Form 10-K for
        the fiscal year ended December 31, 2002 with portions
        omitted pursuant to the Registrant's request for confidential
        treatment and filed separately with the Securities and
        Exchange Commission, and incorporated herein by reference.

10.27   License Agreement effective as of October 24, 2002 between
        the Company and Cricursa Cristales Curvados S.A.
        Previously filed as an Exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        2002 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with
        the Securities and Exchange Commission, and incorporated
        herein by reference.

10.28   License Agreement effective as of December 9, 2002 between
        the Company and BRG Group, Ltd.  Previously filed as an
        Exhibit to the Company's Annual Report on Form 10-K for
        the fiscal year ended December 31, 2002 with portions
        omitted pursuant to the Registrant's request for confidential
        treatment and filed separately with the Securities and
        Exchange Commission, and incorporated herein by reference.

10.29   License Agreement effective as of December 13, 2002
        between the Company and Laminated Technologies Inc.
        Previously filed as an Exhibit to the Company's Annual
        Report on Form 10-K for the fiscal year ended December 31,
        2002 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with
        the Securities and Exchange Commission, and incorporated
        herein by reference.

10.30   License Agreement effective as of April 17, 2003 between the
        Company and Custom Glass Corporation.  Filed herewith
        with portions of this document omitted pursuant to the
        Registrant's request for confidential treatment and filed
        separately with the Securities and Exchange Commission, and
        incorporated herein by reference.

10.31   License Agreement effective as of May 2, 2003 between the
        Company and Air Products and Chemicals, Inc.  Filed
        herewith with portions of this document omitted pursuant to
        the Registrant's request for confidential treatment and filed
        separately with the Securities and Exchange Commission, and
        incorporated herein by reference.

10.32   License Agreement effective as of May 30, 2003 between the
        Company and Kerros Limited.  Filed herewith with portions
        of this document omitted pursuant to the Registrant's request
        for confidential treatment and filed separately with the
        Securities and Exchange Commission, and incorporated
        herein by reference.

10.33   License Agreement effective as of June 6, 2003 between the
        Company and Traco, Inc.  Filed herewith with portions of this
        document omitted pursuant to the Registrant's request for
        confidential treatment and filed separately with the Securities
        and Exchange Commission, and incorporated herein by
        reference.

10.34   License Agreement effective as of June 16, 2003 between the
        Company and Saint-Gobain Glass France S.A.  Filed herewith
        with portions of this document omitted pursuant to the
        Registrant's request for confidential treatment and filed
        separately with the Securities and Exchange Commission, and
        incorporated herein by reference.

10.35   License Agreement effective as of August 1, 2003 between
        the Company and Vision (Environmental Innovation)
        Limited.  Filed herewith with portions of this document
        omitted pursuant to the Registrant's request for confidential
        treatment and filed separately with the Securities and
        Exchange Commission, and incorporated herein by reference.

10.36   License Agreement effective as of November 13, 2003
        between the Company and Innovative Glass Corporation.
        Filed herewith with portions of this document omitted
        pursuant to the Registrant's request for confidential treatment
        and filed separately with the Securities and Exchange
        Commission, and incorporated herein by reference.

10.37   License Agreement effective as of December 11, 2003
        between the Company and Leminur Limited.  Filed herewith
        with portions of this document omitted pursuant to the
        Registrant's request for confidential treatment and filed
        separately with the Securities and Exchange Commission, and
        incorporated herein by reference.

14      Code of Ethics of Research Frontiers Incorporated. Filed herewith.

21      Subsidiaries of the Registrant - SPD Enterprises, Inc.

23      Consent of KPMG LLP - Filed herewith.

31.1    Rule 13a-14(a)/15d-14(a) Certification of Robert L. Saxe-Filed herewith.

31.2    Rule 13a-14(a)/15d-14(a) Certification of JosephM.Harary-Filed herewith.

32.1    Section 1350 Certification of Robert L. Saxe- Filed herewith.

32.2    Section 1350 Certification of Joseph M. Harary- Filed herewith.

*    Executive Compensation Plan or Arrangement.

     (b)  Reports on Form 8-K:

     None

                                SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                         RESEARCH FRONTIERS INCORPORATED
                             (Registrant)

                         /s/ Robert L. Saxe
                         Robert L. Saxe, Chairman
                         (Principal Executive Officer)


                         /s/ Joseph M. Harary
                         Joseph M. Harary, President and Treasurer
                         (Principal Financial, and Accounting Officer)

Dated:  March 12, 2004

     Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated:

Signature                     Position            Date

/s/Robert M. Budin            Director            March 12, 2004
   Robert M. Budin

/s/Joseph M. Harary           Director, President,March 12, 2004
   Joseph M. Harary           Treasurer

/s/Victor F. Keen             Director            March 12, 2004
   Victor F. Keen

/s/Albert P. Malvino          Director            March 12, 2004
   Albert P. Malvino

/s/Robert L. Saxe             Director, Chairman  March 12, 2004
   Robert L. Saxe


                       Independent Auditors' Report



The Shareholders and Board of Directors
Research Frontiers Incorporated:


We have audited the accompanying consolidated balance sheets of
Research Frontiers Incorporated and subsidiary as of December 31,
2003 and 2002, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the years
in the three-year period ended December 31, 2003.  These
consolidated financial statements are the responsibility of the
Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America.  Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Research Frontiers Incorporated and subsidiary at December 31,
2003 and 2002 and the results of their operations and their cash
flows for each of the years in the three-year period ended December
31, 2003 in conformity with accounting principles generally
accepted in the United States of America.

                              /s/ KPMG LLP


Melville, New York
March 9, 2004

                RESEARCH FRONTIERS INCORPORATED

                  Consolidated Balance Sheets

                   December 31, 2003 and 2002

                      Assets                                   2003        2002
Current assets:
 Cash and cash equivalents                             $  5,072,290   5,117,571
 Marketable investment securities-available for sale          7,875      11,250
 Royalty receivables, net of reserves
  of $50,000 in 2003 and $0 in 2002                         159,891     138,147
 Prepaid expenses and other current assets                   82,027      26,661
                       Total current assets               5,322,083   5,293,629

Investment in SPD Inc.                                      209,704     750,002
Fixed assets, net                                           135,878     200,815
Deposits and other assets                                    22,605      22,605

                                 Total assets          $  5,690,270   6,267,051

       Liabilities and Shareholders' Equity

Current liabilities:
 Accounts payable                                      $     85,821      88,609
 Deferred revenue                                            23,683      12,000
 Accrued expenses and other                                 111,339     191,976

                            Total liabilities               220,843     292,585

Shareholders' equity:
 Common stock, par value $0.0001 per share;
  authorized 100,000,000 shares,
  issued and outstanding 12,683,413 and 12,215,879
  shares for 2003 and 2002                                    1,268       1,222
 Additional paid-in capital                              56,395,409  52,124,811
 Accumulated other comprehensive income (loss)               (4,625)     (1,250)
 Accumulated deficit                                    (50,922,625)(46,150,317)

                   Total shareholders' equity             5,469,427   5,974,466

Commitments and contingencies (note 11)

   Total liabilities and shareholders' equity           $ 5,690,270   6,267,051

See accompanying notes to consolidated financial statements.



                RESEARCH FRONTIERS INCORPORATED

             Consolidated Statements of Operations

          Years ended December 31, 2003, 2002 and 2001


                                         2003        2002          2001

Fee income                      $     258,187     217,519       142,002

Operating expenses                  2,537,317   2,631,139     3,155,305
Research and development            1,908,753   1,859,030     2,223,425
Charge for reduction in value
 of investment in SPD Inc.            615,200          --            --
                                    5,061,270   4,490,169     5,378,730

          Operating loss           (4,803,083) (4,272,650)   (5,236,728)

Net investment income                  30,775     256,926       696,058

Interest income on notes receivable
    from officers                          --      64,608            --

          Net loss              $  (4,772,308) (3,951,116)   (4,540,670)

Basic and diluted net loss
 per common share               $       (0.38)      (0.33)        (0.38)

Weighted average number of
common shares outstanding          12,436,879  12,152,506    12,085,609

See accompanying notes to consolidated financial statements.

                                RESEARCH FRONTIERS INCORPORATED
                               Statements of Shareholders' Equity
                        Years ended December 31, 2003, 2002 and 2001

<TABLE>
<CAPTION>                                                                           Accumulated
                            Common Stock      Additional  Accumulated    Treasury   Other Compre-         Notes
                         Shares     Amount  Paid in Capital Deficit   Stock,at Cost hensive Income(Loss) Receivable  Total

<S>                             <C>     <C>       <C>          <C>        <C>  <C>          <C>        <C>

Balance,December 31,2000 12,103,683 $1,210 52,594,293 (37,658,531)       --(46,094)(152,961)14,737,917
Issuance of common stock    407,175     41  6,778,991          --        --     --       --  6,779,032
Purchase of treasury stock       --     --         --          --(8,144,693)    --       -- (8,144,693)
Retirementof treasury stock(407,065)   (40)(8,144,653)         -- 8,144,693     --       --         --
Comprehensive loss:
 Net loss                        --     --         --  (4,540,670)       --     --       -- (4,540,670)
Unrealized gain on available-
 for-sale securities             --     --         --          --        -- 87,929       --     87,929
   Total Comprehensive Loss                                                                 (4,452,741)
Issuance of warrants
 for services performed       4,402     --    130,405          --        --     --       --    130,405
Balance,December 31,2001 12,108,195  1,211 51,359,036 (42,199,201)       -- 41,835 (152,961) 9,049,920
Issuance of common stock    297,875     30  3,011,021          --        --     --       --  3,011,051
Purchase of treasury stock       --     --         --          --(2,354,608)    --       -- (2,354,608)
Retirement oftreasury stock(190,441)   (19)(2,354,589)         -- 2,354,608     --       --         --
Comprehensive loss:
Net loss                         --     --         --  (3,951,116)       --     --       -- (3,951,116)
Unrealized loss on available-
 for-sale securities             --     --         --          --        --(43,085)      --    (43,085)
   Total Comprehensive Loss                                                                 (3,994,201)
Loan repayment from officers     --     --         --          --        --     --  152,961    152,961
Issuance of stock, options and warrants
 for services performed         250     --    109,343          --        --     --       --    109,343
Balance,December 31,2002 12,215,879 $1,222 52,124,811 (46,150,317)       -- (1,250)      --  5,974,466
Issuance of common stock    460,025     46  4,201,711          --        --     --       --  4,201,757
Comprehensive loss:
Net loss                         --     --         --  (4,772,308)       --     --       -- (4,772,308)
Unrealized loss on available-
 for-sale securities             --     --         --          --        -- (3,375)      --     (3,375)
   Total Comprehensive Loss                                                                 (4,775,683)
Issuance of stock, options and warrants
 for services performed       7,509     --     68,887          --        --     --       --     68,887
Balance,December 31,2002 12,683,413 $1,268 56,395,409 (50,922,625)       -- (4,675)      --  5,469,427
</TABLE>

See accompanying notes to financial statements.



                              RESEARCH FRONTIERS INCORPORATED
                           Consolidated Statements of Cash Flows
                          Years ended December 31, 2003, 2002 and 2001

                                                     2003       2002       2001
Cash flows from operating activities:
 Net loss                                     $(4,772,308)(3,951,116)(4,540,670)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
   Depreciation and amortization                  112,092    114,170    118,657
    Provision for uncollectible
     royalty receivables                           50,000         --         --
    Charge for reduction in value
     of investment in SPD Inc.                    615,200         --         --
    Expense relating to cashless
     exercise of stock options                     40,987         --     17,588
    Expense relating to issuance of stock,options
     and warrants for services performed           27,900    109,343    112,817
    Impairment loss on marketable securities           --     37,500         --
    Changes in assets and liabilities:
     Royalty receivables                          (71,744)  (100,647)   (37,500)
     Prepaid expenses and other current assets    (55,366)   107,389    106,939
     Deferred revenue                              11,683    (25,500)        (2)
     Accounts payable and accrued expenses        (83,425)    43,103   (716,226)

Net cash used in operating activities          (4,124,981)(3,665,758)(4,938,397)

Cash flows from investing activities:
 Proceeds from sale and maturity
  of held-to-maturity securities                       --         --  1,319,572
 Proceeds from sale of available-for-sale securities   --  6,991,771  2,996,409
 Investment in SPD, Inc., at cost                 (74,902)        --   (750,002)
 Purchases of fixed assets                        (47,155)  ( 35,367)  ( 50,572)

Net cash(used in)provided by investing activities(122,057) 6,956,404  3,515,407

Cash flows from financing activities:
 Repayment of principal on officer's loans             --    152,961         --
 Proceeds from issuances of
  common stock and warrants                     4,201,757  3,175,362  6,614,721
 Purchase of treasury stock                            -- (2,354,608)(8,144,693)

Net cash provided by (used in)
  financing activities                          4,201,757    973,715 (1,529,972)

Net (decrease) increase in
 cash and cash equivalents                        (45,281) 4,264,361 (2,952,962)
Cash and cash equivalents at beginning of year  5,117,571    853,210  3,806,172
Cash and cash equivalents at end of year       $5,072,290  5,117,571    853,210

See accompanying notes to consolidated financial statements.


                RESEARCH FRONTIERS INCORPORATED
           Notes to Consolidated Financial Statements
                December 31, 2003, 2002 and 2001

(1)     Business

Research Frontiers Incorporated ("Research Frontiers" or the
"Company") operates in a single business segment which is engaged in
the development and marketing of technology and devices to control the
flow of light.  Such devices, often referred to as "light valves" or
suspended particle devices (SPDs), use colloidal particles that are either
incorporated within a liquid suspension or a film, which is usually
enclosed between two sheets of glass or plastic having transparent,
electrically conductive coatings on the facing surfaces thereof.  At least
one of the two sheets is transparent. SPD technology, made possible by
a flexible light-control film invented by RFI, allows the user to instantly
and precisely control the shading of glass/plastic manually or
automatically. SPD technology has numerous product applications,
including: SPD-Smart  windows, sunshades, skylights and interior
partitions for homes and buildings; automotive windows, sunroofs, sun-
visors, sunshades, rear-view mirrors, instrument panels and navigation
systems; aircraft windows; eyewear products; and flat panel displays for
electronic products.  SPD-Smart light control film is now being used in
architectural, automotive, marine, aerospace and appliance applications.

The Company has historically utilized its cash and the proceeds from
maturities of its investments to fund its research and development of SPD
light valves and for other working capital purposes.  The Company's
working capital and capital requirements depend upon numerous factors,
including the results of research and development activities, competitive
and technological developments, the timing and cost of patent filings, and
the development of new licensees and changes in the Company's
relationships with its existing licensees.  The degree of dependence of the
Company's working capital requirements on each of the foregoing factors
cannot be quantified; increased research and development activities and
related costs would increase such requirements; the addition of new
licensees may provide additional working capital or working capital
requirements, and changes in relationships with existing licensees would
have a favorable or negative impact depending upon the nature of such
changes. There can be no assurance that expenditures will not exceed the
anticipated amounts or that additional financing, if required, will be
available when needed or, if available, that its terms will be favorable or
acceptable to the Company.  Eventual success of the Company and
generation of positive cash flow will be dependent upon the
commercialization of products using the Company's technology by the
Company's licensees and payments of continuing royalties on account thereof.

As discussed in note 9(d), the Company's principal source of funding
since 1999 has been direct investments by Ailouros Ltd, a London-based
institutional money management fund. Through March 9, 2004, the
Company issued the remaining 99,417 shares registered and available for
issuance under the Class A Warrant, resulting in net proceeds of
approximately $1 million in fiscal 2004. The Company will need to raise
additional capital no later than the first quarter of 2005 if operations,
including research and development and marketing, are to be maintained
at current levels. If the Company cannot raise additional funds, it will be
required to reduce expenses during 2004.

(2) Summary of Significant Accounting Policies

   (a)  Cash and Cash Equivalents

The Company considers securities purchased with original maturities of
three months or less to be cash equivalents.  Cash equivalents consist of
short-term investments in money market accounts at December 31, 2003 and 2002.

   (b)  Marketable Investment Securities

Marketable investment securities at December 31, 2003 and 2002
consisted of an equity security.  The Company classifies its securities into
available-for-sale which are recorded at fair value with unrealized
holding gains and losses excluded from earnings and are reported as a
separate component of shareholders' equity until realized. Dividend and
interest income are recognized when earned.  Cost is maintained on a
specific identification basis for purposes of determining realized gains
and losses on sales of investments.  A decline in the market value of any
available-for-sale security below cost that is deemed to be other than
temporary results in a reduction in carrying amount to fair market value.
The impairment is charged to earnings and a new cost basis for this
security is established. During the fourth quarter of 2002, the Company
reduced the carrying amount of its equity security by $37,500 because of
a sustained reduction in the market price of the stock.

   (c)  Fixed Assets

Fixed assets are carried at cost.  Depreciation and amortization are
computed using the straight-line method over the estimated useful lives
of the assets.

   (d)  Fee Income

Fee income represents amounts earned by the Company under various
license and other agreements (note 10) relating to technology developed
by the Company.  During fiscal 2003, four licensees of the Company
accounted for 19%, 19%, 19% and 15%, respectively of fee income
recognized during the year.  During fiscal 2002, four licensees of the
Company accounted for 23%, 23%, 17% and 11%, respectively of fee
income recognized during the year.  During fiscal 2001, three licensees
of the Company accounted for 35%, 26% and 26%, respectively of fee
income recognized during the year.

   (e)  Basic and Diluted Loss Per Common Share

Basic earnings (loss) per share excludes any dilution.  It is based upon the
weighted average number of common shares outstanding during the
period.  Dilutive earnings (loss) per share reflects the potential dilution
that would occur if securities or other contracts to issue common stock
were exercised or converted into common stock.  The Company's dilutive
earnings (loss) per share equals basic earnings (loss) per share for each
of the years in the three-year period ended December 31, 2003 because
all common stock equivalents (i.e., options and warrants) were
antidilutive in those periods.  The number of options and warrants that
was not included because their effect is antidilutive was 2,691,726,
2,667,701, and 2,542,576, for 2003, 2002, and 2001, respectively.

   (f)  Research and Development Costs

Research and development costs are charged to expense as incurred.

   (g)  Patent Costs

The Company expenses costs relating to the development or acquisition
of patents due to the uncertainty of the recoverability of these items.

   (h)  Use of Estimates

The preparation of the Company's consolidated financial statements
requires management of the Company to make a number of estimates and
assumptions relating to the  reported amount of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
consolidated  financial statements and the reported amounts of revenues
and expenses during this period.  Significant items subject to such
estimates and assumptions include the valuation of deferred income tax
assets.  Actual results could differ from those estimates.

   (i)  Income Taxes

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards.  Deferred tax
assets and liabilities are measured using enacted tax rates expected to be
recovered or settled.  The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes
the enactment date.

   (j)  Fair Value of Financial Instruments

The fair value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between willing
parties. The carrying amounts of all financial instruments classified as a
current asset or current liability are deemed to approximate fair value
because of the short maturity of those instruments.

The fair value of the notes receivable from officers approximates the
carrying value as their stated interest rate, the broker call rate, is similar
to other rates currently offered by local brokerage institutions for loans
of similar terms to individuals with comparable credit risk.

   (k)  Stock-Based Compensation

In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure." SFAS No. 148
provides alternative methods of transition for a voluntary change to the
fair value method of accounting for stock-based employee compensation
as originally provided by SFAS No. 123, "Accounting for Stock-Based
Compensation." Additionally, SFAS No. 148 amends the disclosure
provisions of SFAS No. 123 to require prominent disclosure in both the
annual and interim financial statements about the method of accounting
for stock-based compensation and the effect of the method used on
reported results. The Company adopted the disclosure provisions of this
statement in the fiscal quarter ended March 31, 2003.

The exercise price for stock options granted are generally set at the
average of the high and low trading prices of the Company's common
stock on the trading date immediately prior to the date of grant, and the
related number of shares granted are fixed at the date of grant. Under the
principles of APB Opinion No. 25, the Company does not recognize
compensation expense associated with the grant of stock options. SFAS
No. 123 requires the use of option valuation models to determine the fair
value of options granted after 1995. Pro forma information regarding net
loss and net loss per share shown below was determined as if the
Company had accounted for its employee stock options and shares sold
under its stock purchase plan under the fair value method set forth in
SFAS No. 123.

The fair value of the options was estimated at the date of grant using a
Black-Scholes option pricing model. For purposes of pro forma
disclosures, the estimated fair value of the options is amortized over the
options' vesting periods.

The following table illustrates the effect on net loss and earnings per
share as if the fair value method had been applied:.

                                                2003      2002      2001

Net loss, as reported                       $(4,772,308)$(3,951,116)$(4,540,670)

Add:    Stock-based employee compensation
        expense included in reported net loss    40,987          --          --

Deduct: Total stock-based employee
        compensation determined under fair-
        value based method for all awards   $  (873,262) (5,393,206) (2,011,685)

                             Pro forma      $(5,604,583)$(9,344,322)$(6,552,355)

Basic and diluted net loss
per common share           As reported          $ (0.38)    $ (0.33)    $ (0.38)
                           Pro forma            $ (0.45)    $ (0.77)    $ (0.54)

The per share weighted average fair value of warrants issued to directors
and stock options granted during 2003, 2002, and 2001, was
approximately $7.45, $7.41, and $12.41, respectively, on the date of
grant using the Black-Scholes option-pricing model with the following
weighted average assumptions:

                Expected        Risk-Free       Expected Stock  Expected Life
Grant Date      Dividend Yield  Interest Rate   Volatility      in Years
June 2003           0 %          1.750%         82.050%          3.77
December 2002       0 %          3.268%         78.340%          3.77
September 2002      0 %          3.268%         78.340%          3.77
June 2002           0 %          3.754%         78.280%          3.77
September 2001      0 %          3.787%         90.190%          3.62
June 2001           0 %          4.768%         85.170%          3.62
December 2000       0 %          5.200%         64.659%          3.62
October 2000        0 %          5.760%         65.076%          3.62
June 2000           0 %          6.290%         64.532%          3.62
February 2000       0 %          6.600%         56.400%          3.62

           (l)  Accumulated Other Comprehensive Income (loss)

The change in accumulated other comprehensive income (loss) was
$3,375 for the year-ended December 31, 2003 for the unrealized holding
losses on available-for-sale securities for the period, and $43,085 for the
year ended December 31, 2002 which was comprised of reclassification
adjustments for gains realized in net income of $80,585 and an
impairment loss in the amount of $37,500 for a decline in value that is
other than temporary. The unrealized gains on available-for-sale
securities of $87,929 for the year ended December 31, 2001 is comprised
of $168,985 of unrealized holding gains arising during the period less
reclassification adjustments for gains realized in net income of $81,056
during the period.

    (m)  Revenue Recognition

The Company has entered into a number of license agreements covering
its light control technology.  The Company receives minimum annual
royalties under certain license agreements and records fee income on a
ratable basis each quarter.  In instances when sales of licensed products
by its licensees exceed minimum annual royalties, the Company
recognizes fee income as the amounts have been earned.  Certain of the
fees are accrued by, or paid to, the Company in advance of the period in
which they are earned resulting in deferred revenue. Such excess amounts
are recorded as deferred revenue and recognized into income in future
periods as earned.

   (n)  Reclassifications

During 2002, the Company has reclassified costs associated with patents
and patent applications from research and development expenses to
operating expenses.  The amount of patent costs for the year  ended
December 31, 2002 was approximately $372,000.  The reclassification
was also reflected in the consolidated statement of operations for the year
ended December 31, 2001 to conform to the current period's
presentation.  The amount of patent costs reclassified from research and
development expense to operating expense for the year ended December
31, 2001 was approximately $411,000.

   (o)  Recently Issued Accounting Standards

The Company adopted on January 1, 2003 Financial Accounting
Standards Board Statement No. 146, Accounting for Costs Associated
with Exit or Disposal Activities ("SFAS No. 146").  SFAS No. 146
spreads out the reporting of expenses relating to restructurings initiated
after 2002, because commitment to a plan to exit an activity or dispose
of long-lived assets will no longer be enough to record a liability for the
anticipated costs.  Instead, companies will record exit and disposal costs
when they are "incurred" and can be measured at fair value, and they will
subsequently adjust the recorded liability for changes in estimated cash
flows. The adoption of SFAS No. 146 had no impact on the Company's
consolidated financial statements as no restructurings are planned.

In November 2002, the EITF reached a consensus on Issue No. 00-21,
"Revenue Arrangements with Multiple Deliverables."  Issue 00-21
provides guidance on how to account for arrangements that involve the
delivery or performance of multiple products, services and/or rights to use
assets. The provisions of Issue 00-21 apply to revenue arrangements
entered into in fiscal periods beginning after June 15, 2003 but do not
supersede existing authoritative guidance. The adoption of Issue 00-21
did not have an impact on the Company's financial statements because the
Company does not have any arrangements which would be subject to
Issue 00-21.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities."  Interpretation No. 46 clarifies the
application of Accounting Research Bulletin No. 51 and applies
immediately to any variable interest entities created after January 31,
2003 and to variable interest entities in which an interest is obtained after
that date. This Interpretation is applicable to the Company in the quarter
ending December 31, 2003, for interests acquired in variable interest
entities prior to February 1, 2003.  This Interpretation requires variable
interest entities to be consolidated if the equity investment at risk is not
sufficient to permit an entity to finance its activities without support from
other parties or the equity investors lack specified characteristics.  The
adoption of this Interpretation did not have an impact on the Company's
financial statements because the Company does not have any interest in
variable interest entity.

In April 2003, the FASB issued SFAS No. 149, "Amendment of SFAS
No. 133 on Derivative Instruments and Hedging Activities." SFAS No.
149 amends and clarifies accounting for derivative instruments, including
certain derivative instruments embedded in other contracts, and for
hedging activities under SFAS No. 133.  In particular, this Statement
clarifies under what circumstances a contract with an initial net
investment meets the characteristic of a derivative.  It also clarifies when
a derivative contains a financing component that warrants special
reporting in the statement of cash flows. SFAS No. 149 is generally
effective for contracts entered into or modified after June 30, 2003 and
did not have an impact on the Company's financial statements because the
Company has no derivative instruments.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity." SFAS No. 150 establishes standards for how a company
classifies and measures certain financial instruments with characteristics
of both liabilities and equity.  It requires that an issuer classify certain
financial instruments as a liability (or as an asset in some
circumstances).  SFAS No. 150 is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective
at the beginning of the first interim period beginning after June 15,
2003. The adoption of SFAS No. 150 did not have an impact on the
Company's financial statements because the Company has no financial
instruments subject to SFAS No. 150.

    (p)  Impairment of Long-Lived Assets

In accordance with SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," the Company reviews long-lived assets
to determine whether an event or change in circumstances indicates the
carrying value of the asset may not be recoverable. The Company bases
its evaluation on such impairment indicators as the nature of the assets,
the future economic benefit of the assets and any historical or future
profitability measurements, as well as other external market conditions
or factors that may be present. If such impairment indicators are present
or other factors exist that indicate that the carrying amount of the asset
may not be recoverable, the Company determines whether an impairment
has occurred through the use of an undiscounted cash flows analysis at
the lowest level for which identifiable cash flows exist. If impairment has
occurred, the Company recognizes a loss for the difference between the
carrying amount and the fair value of the asset. Fair value is the amount
at which the asset could be bought or sold in a current transaction
between a willing buyer and seller other than in a forced or liquidation
sale and can be measured as the asset's quoted market price in an active
market or, where an active market for the asset does not exist, the
Company's best estimate of fair value based on discounted cash flow
analysis. Assets to be disposed of by sale are measured at the lower of
carrying amount or fair value less estimated costs to sell. The
implementation of SFAS No. 144 had no impact on the Company's
financial position or results of operations.

    (q)  Supplemental Cash Flow Information

The following is supplemental information relating to the Company's
consolidated statement of cash flows:
                                                  2003         2002        2001
Non-cash financing activities:
 Receivable from warrant exercise        $          --           --     164,311

(3)     Investment in SPD Inc.

During the second quarter of 2001, the Company, through its wholly-
owned subsidiary, SPD Enterprises, Inc., invested approximately
$750,000 for a minority equity interest in SPD Inc., a subsidiary of
Hankuk Glass Industries Inc., Korea's largest glass manufacturer, which
is dedicated exclusively to the production of suspended particle device
(SPD) light-control film and a wide variety of end-products using SPD
film. In April 2003, the Company's wholly-owned subsidiary, SPD
Enterprises, Inc.,  invested $74,902 in SPD Inc., raising its equity
ownership from 6.67% to 6.91%. SPD Inc.'s parent company invested at
the same time and at the same price, $748,931, raising its equity
ownership in SPD Inc. from 66.67% to 69.09%.  Because of the 2003
financing activities by SPD Inc. in which Hankuk and SPD Enterprises
paid a lower price than originally paid by SPD Enterprises in connection
with its initial investment in SPD Inc., the value of SPD Enterprises'
investment in SPD Inc. was reduced by $255,200 during the first quarter
of 2003. The Company also recorded a further non-cash charge against
income of $360,000 as of the end of 2003 to reflect a reduction in the
value of its investment in SPD Inc. determined based upon its review of
the financial position and results of operations of SPD Inc. as of and for
the year ended December 31, 2003.  The Company's license agreement
with Hankuk Glass Industries provides for the payment of minimum
annual royalties to the Company in 2002 and 2003.

(4)     Marketable Investment Securities

The fair value of marketable investment securities is based upon quoted
market prices.  The amortized cost, gross unrealized holding gains and
fair value for the Company's securities at December 31, 2003 and 2002
were as follows:

                            Amortized Cost Gross Unrealized Holding   Fair Value
                                             Gains     (Losses)
At December 31, 2003:

Available-for-sale securities:
Equity securities                  12,500       --      (4,625)           7,875

At December 31, 2002:

Available-for-sale securities:
Equity securities                  12,500       --      (1,250)          11,250

(5)  Notes Receivable from Officers

During the fourth quarter of 2002, executive officers Joseph M. Harary
and Robert L. Saxe repaid loans made previously by the Company in the
principal amount of $152,961, plus all accrued interest through the date
of payment.  These loans were repaid in cash by these individuals. In
connection with the aforementioned loan repayments, the Company
recorded $64,608 in interest income in 2002. It is the Company's policy
to record interest income on these notes when repaid.

(6)  Fixed Assets

Fixed assets and their estimated useful lives, are as follows:

                                     2003       2002  Estimated useful life
Equipment and furniture       $ 1,126,348  1,084,708  5 years
Leasehold improvements            282,660    277,145  Life of lease or estimated
                                1,409,008  1,361,853    life if shorter
Less accumulated depreciation
    and amortization            1,273,130  1,161,038
                              $   135,878    200,815

(7)   Accrued Expenses and Other

Accrued expenses consist of the following at December 31, 2003 and 2002:

                                              2003              2002
Payroll, bonuses and related benefits      $56,269            85,974
Professional services                       38,450            91,846
Other                                       16,620            14,156
                                         $ 111,339           191,976

(8)     Income Taxes

There was no income tax expense in 2003, 2002 and 2001 due to losses
incurred by the Company.

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets at December 31, 2003 and 2002 are
presented below.
                                              2003            2002
Deferred tax assets:
 Depreciation                            $  78,615           66,000
 Impairment of Investment                  246,080               --
 Net operating loss carryforwards       15,823,741       14,268,000
 Research and other credits                939,962          873,000
  Total gross deferred tax assets       17,088,398       15,207,000
 Less valuation allowance               17,088,398       15,207,000
                                                --               --

In assessing the realizability of deferred tax assets, the Company
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized.  The ultimate realization of
deferred tax assets is dependent upon future taxable income during the
period in which those temporary differences become deductible.  The
Company considers the scheduled reversal of deferred tax liabilities,
projected future taxable income, and tax planning strategies in making
this assessment.  Based upon its historical operating losses, the Company
believes that it is more likely than not that deferred tax assets will not be
realized. Accordingly, the Company has recorded a full valuation
allowance against the deferred tax assets, as they will not be realized
unless the Company achieves profitable operations in the future.

At December 31, 2003, the Company had a net operating loss
carryforward for federal income tax purposes of $39,559,352, varying
amounts of which will expire in each year from 2004 through 2023.
Research and other credit carryforwards of $939,962 are available to the
Company to reduce income taxes payable in future years principally
through 2023. Net operating loss carryforwards of $766,757 and research
and other credit carryforwards of $30,632 are scheduled to expire during
fiscal 2004, if not utilized.

(9)     Shareholders' Equity

   (a)  Sale of Common Stock and Warrants

During 2001, the Company received $6,614,721 of net cash proceeds
from the issuance of 407,175 shares of common stock from the exercise
of options and warrants, as follows: (i) the issuance of 48,175 shares of
common stock issued upon the exercise of options resulting in net
proceeds of $385,472 and (ii) 359,000 shares of common stock issued
upon the exercise of warrants, principally related to the Class A Warrant,
resulting in net proceeds (inclusive of a receivable described below of
$164,311) of $6,393,560.  In addition, 3,715 shares were issued to
directors in payment of $69,221 in directors fees, and 687 shares were
issued through the cancellation of 1,000 warrants, resulting in non-cash
consulting expense of $17,588 being recorded.

The Company recorded a receivable of $164,311 representing a warrant
exercise that occurred prior to the end of 2001, that was scheduled to
settle in January 2002.  The Company received the cash for the settlement
of this warrant in January 2002.

During 2002, the Company received $3,175,362 of net cash proceeds
from (i) the issuance of 33,875 shares of common stock issued upon the
exercise of options resulting in net proceeds of $243,767; (ii) 253,500
shares of common stock issued upon the exercise of warrants, principally
related to the Class A Warrant, resulting in net proceeds of $2,728,084;
and (iii) $164,311 of cash received in early January for the settlement of
a warrant exercised in late December 2001. In addition, 2,816 shares with
a value of $39,200 were delivered to the Company and immediately
retired in payment of the exercise price of options to purchase 10,500
shares, and 250 shares of common stock were issued in connection with
the acquisition by the Company of the domain name "SmartGlass.com"
resulting in non-cash marketing expenses of $1,518.

During 2003, the Company received $4,201,757 of net cash proceeds
from (i) the issuance of 25,000 shares of common stock of the Company
(along with a ten-year warrant to purchase 25,000 shares of common
stock of the Company at an exercise price of $9.00 per share) in a private
placement to a director of the Company resulting in net proceeds of
$165,000; (ii) 364,300 shares of common stock issued upon the exercise
of warrants resulting in net proceeds of $3,527,148; and (iii) the issuance
of 69,475 shares of common stock issued upon the exercise of options
resulting in net proceeds of $509,590.  In addition, 3,754 shares were
issued through the cashless exercise of certain options and warrants,
resulting in non-cash directors expense of $40,987 being recorded, and
9,995 shares with a value of $108,995 were delivered to the Company
and immediately retired in payment of the exercise price of options to
purchase 15,000 shares.

   (b)  Options and Warrants

   (i)  Options

In 1992, the shareholders approved a stock option plan (1992 Stock
Option Plan) which provides for the granting of both incentive stock
options at the fair market value at the date of grant and nonqualified stock
options at or below the fair market value at the date of grant to employees
or non-employees who, in the determination of the Board of Directors,
have made or may make significant contributions to the Company in the
future.  The Company initially reserved 468,750 shares of its common
stock for issuance under this plan.  In 1994 and 1996, the Company's
shareholders approved an additional 300,000 shares and 450,000 shares,
respectively, for issuance under this plan. As of December 31, 2001, no
options were available for issuance under this Plan and this Plan expired
during 2002.

In 1998, the shareholders approved a stock option plan (1998 Stock
Option Plan) which provides for the granting of both incentive stock
options at the fair market value at the date of grant and nonqualified stock
options at or below the fair market value at the date of grant to employees
or non-employees who, in the determination of the Board of Directors,
have made or may make significant contributions to the Company in the
future.  The Company may also award stock appreciation rights or
restricted stock under this plan. The Company initially reserved 540,000
shares of its common stock for issuance under this plan.  In 1999, the
Company's shareholders approved an additional 545,000 shares for
issuance under this Plan, and in each of 2000 and 2002, the Company's
shareholders approved an additional 600,000 shares for issuance under
this Plan. As of December 31, 2003, awards for 544,822 shares of
common stock were available for issuance under this Plan.

At the discretion of the Board of Directors, options expire in ten years or
less from the date of grant and are generally fully exercisable upon grant
but in some cases may be subject to vesting in the future.  Full payment
of the exercise price may be made in cash or in shares of common stock
valued at the fair market value thereof on the date of exercise, or by
agreeing with the Company to cancel a portion of the exercised options.
When an employee exercises a stock option through the surrender of
options held, rather than of cash for the option  exercise price,
compensation expense is recorded in accordance with APB Opinion No.
25.  Accordingly, compensation expense is recorded for the difference
between the quoted market value of the Company's common stock at the
date of exchange and the exercise price of the option. During 2003, the
Company recorded a non-cash expense of $40,987 related to a cashless
exercise of options.

Activity in stock options is summarized below:

                              Number of Shares       Weighted Average
                              Subject to Option              Exercise Price
Balance at December 31, 2000       1,948,501              $10.00
   Granted                           416,550              $20.20
   Cancelled                              --                  --
   Exercised                         (48,175)             $ 8.00

Balance at December 31, 2001       2,316,876              $11.88
   Granted                           168,000              $12.76
   Cancelled                              --                  --
   Exercised                         (44,375)             $ 6.38

Balance at December 31, 2002       2,440,501              $12.04
    Granted                           86,500              $12.62
    Cancelled                         (3,000)             $15.41
    Exercised                        (84,475)             $ 7.32

Balance at December 31, 2003       2,439,526              $12.22

The following table summarizes information about stock options at
December 31, 2003:

                                               Weighted
                                               Average      Weighted   Weighted
                                               Remaining    Average    Average
Range of          Options       Contractual    Exercise     Shares      Exercise
Exercise Price  Outstanding     Life (Years)   Price        Exercisable  Price

$3.00 to $6.00    109,802        2.92          $  5.97        109,802   $ 5.97
$6.01 to $7.50    592,851        4.02          $  7.31        592,851   $ 7.31
$7.51 to $9.00    552,501        4.72          $  8.35        552,501   $ 8.35
$9.01 to $12.00   316,025        4.80          $  9.87        316,025   $ 9.87
$12.01 to $15.00  418,047        6.08          $ 13.38        418,047   $13.38
$15.01 to $19.00  112,000        6.92          $ 18.99        105,000   $19.00
$19.01 to $37.03  338,300        7.21          $ 27.70        328,300   $27.42
                2,439,526        5.16          $ 12.22      2,422,526   $12.10

During 2003, the Company issued options to a consultant to purchase
5,000 shares of common stock at an exercise price of $9.54 per share.
The Company recorded $27,900 of non-cash expense in connection with
the issuance of these options.

During 2002, the Company issued options to its five Advisory Board
members to purchase a total of 5,000 shares of common stock at an
exercise price of $12.775 per share. The Company recorded $37,050 of
non-cash expense based on the fair value of these options determined
using a Black-Scholes option pricing model. In addition, the Company
issued options to purchase 1,250 shares of common stock in connection
with the acquisition by the Company of the domain name
"SmartGlass.com,"and for web design services, resulting in non-cash
marketing expense of $6,775.

During 2000, the Company granted 14,000 options to consultants which
vested immediately. The Company recorded consulting expenses of
$246,961 based upon the fair value of such options on the date the
options vested as determined using a Black-Scholes option pricing model.

  (ii)    Warrants

Activity in warrants is summarized below, excluding the effect of the
warrants discussed in note 9(d)):

                                    Number of Shares             Exercise
                              Underlying Warrants Granted          Price

Balance at December 31, 2000          275,700                 $ 5.88-21.00
  Exercised                           (30,000)                  7.99-11.00
  Terminated                          (20,000)                 16.00-21.00
  Issued                                   --                           --

Balance at December 31, 2001          225,700                 $ 5.88-13.50
  Exercised                            (8,500)                  7.99 -8.98
  Terminated                               --                           --
  Issued                               10,000                        12.19

Balance at December 31, 2002          227,200                 $ 5.88-13.50
   Exercised                               --                           --
   Terminated                              --                           --
   Issued                              25,000                         9.00

 Balance at December 31, 2003         252,200                   5.88-13.50

Warrants generally expire from two to ten years from the date of issuance.
At December 31, 2003 the number of warrants exercisable was 247,200
at a weighted average exercise price of $8.38 per share.

During 2003, a warrant to purchase 25,000 shares of common stock at an
exercise price of $9.00 per share was issued to a director of the Company
in connection with a private placement.

During 2002, the Company issued warrants to SPD Inc. to purchase 10,000
shares of common stock at an exercise price of $12.19 per share as an
award for being the first licensee of the Company to produce and sell
commercial quantities of SPD film. The Company recorded $64,000 of
non-cash expense in connection with the issuance of these warrants.

During 2001, certain warrants granted to a consultant in 1995 to purchase
7,000 shares of common stock became vested due to services performed
and performance criteria being met. The Company recorded consulting
expense of $43,596 based upon the fair value of such warrants on the date
the warrants vested as determined using a Black-Scholes option pricing
model.

  (c)  Treasury Stock

The Company did not repurchase any of its stock during 2003.  In 2003,
9,995 shares with a value of $108,995 were delivered to the Company and
immediately retired in payment of the exercise price of options to purchase
15,000 shares. During 2002, the Company purchased in the open market
and subsequently retired 187,625 shares of treasury stock with an
aggregate cost of $2,315,408. In addition, 2,816 shares with a value of
$39,200 was delivered to the Company and immediately retired in payment
of the exercise price of options to purchase 10,500 shares.  During 2001,
the Company purchased in the open market and subsequently retired
407,065 shares of treasury stock with an aggregate cost of $8,144,693.

        (d)  Class A and Class B Warrants

  On October 1, 1998, the Company announced that Ailouros Ltd., a
London-based institutional money management fund, committed to
purchase up to $15 million worth of  common stock of the Company
through December 31, 2001.  This commitment is in the form of a Class
A Warrant issued to Ailouros Ltd. which gives the Company the option in
any three-month period to deliver a put notice to Ailouros requiring them
to purchase an amount of common stock specified by the Company at a
price equal to the greater of (A) 92% of the seven-day average trading
price per share of common stock, or (B) a minimum or "floor" price per
share set by the Company from time to time.  The pricing was initially
subject to an overall cap of $15 per share, which cap has now been
eliminated by mutual agreement so that the Company may put stock to
Ailouros at selling prices in excess of $15 per share.  However, the
Company is not required to sell any shares under the agreement. Before the
beginning of each of a series of three-month periods specified by the
Company, the Company determines the amount of common stock that the
Company wishes to issue during such three-month period.  The Company
also sets the minimum selling or "floor" price, which can be reset by the
Company in its sole discretion prior to the beginning of any subsequent
three-month period.  Therefore, at the beginning of each three-month
period, the Company will determine how much common stock, if any, is
to be sold  (the amount of which can range from $0 to $1.5 million during
such three-month period), and the minimum selling price per share. In
March 2000, Ailouros agreed to expand its commitment beyond the
original $15 million, thereby giving the Company the right to raise
additional funds from Ailouros so long as the Company does not have to
issue more shares than were originally registered with the Securities and
Exchange Commission, and in December 2001 the expiration date of the
Class A Warrant was extended to December 31, 2003. In December 2003,
this expiration date for the Class A Warrant was further extended to
December 31, 2005.  As of March 15, 2004, no shares remained registered
for future issuance under the Class A Warrant.  While no additional
funding is projected to be required by the Company in order to maintain its
current levels of expenditures for research and development, market
development and other operations until at least the first quarter of 2005,
the Company and Ailouros, which has been the Company's principal
source of capital funding since 1999, intend to enter into additional
funding arrangements to raise additional working capital for the Company.

In connection with the financing, the Company also issued Ailouros Ltd.
a Class B Warrant which expires on September 30, 2008.  The Class B
Warrant is exercisable at $8.25 per share which represents 120% of
average of the closing bid and ask price of the Company's common stock
on the date of the Class B Warrant's issuance.  The Class B Warrant is
exercisable into 65,500 shares.  Ailouros paid the Company $10,000 upon
issuance of the Class A Warrant and the Class B Warrant.

(10) License and Other Agreements

The Company has entered into a number of license agreements covering
various products using the Company's SPD technology. Licensees of
Research Frontiers who incorporate SPD technology into end products will
pay Research Frontiers an earned royalty of 5-15% of net sales of licensed
products under license agreements currently in effect, and may also be
required to pay Research Frontiers minimum annual royalties.  To the
extent that products have been sold resulting in earned royalties under
these license agreements in excess of these minimum advance royalty
payments, the Company has recorded additional royalty income.  Licensees
who sell products or components to other licensees of Research Frontiers
do not pay a royalty on such sale and Research Frontiers will collect such
royalty from the licensee incorporating such products or components into
their own end-products. Research Frontiers' license agreements typically
allow the licensee to terminate the license after some period of time, and
give Research Frontiers only limited rights to terminate before the license
expires. Most licenses are non-exclusive and generally last as long as our
patents remain in effect.

 (11)   Commitments

The Company has an employment agreement with one of its officers which
provides for an annual base salary of $441,348 through December 31,
2003.

The Company occupies premises under an operating lease agreement
which expires on January 31, 2014 and requires minimum annual rent
which rises over the term of the lease to approximately $143,500. Rent
expense, including other expenses, amounted to approximately $152,000,
$148,000, and $152,000, for 2003, 2002, and 2001, respectively.

(12)   Rights Plan

In February 2003, the Company's Board of Directors adopted a
Stockholders' Rights Plan and declared a dividend distribution of one
Right for each outstanding share of Company common stock to
stockholders of record at the close of business on March 3, 2003.  Subject
to certain exceptions listed in the Rights Plan, if a person or group has
acquired beneficial ownership of, or commences a tender or exchange offer
for, 15% or more of the Company's common stock, unless redeemed by the
Company's Board of Directors, each Right entitles the holder (other than
the acquiring person) to purchase from the Company $120 worth of
common stock for $60.  If the Company is merged into, or 50% or more of
its assets or earning power is sold to, the acquiring company, the Rights
will also enable the holder (other than the acquiring person) to purchase
$120 worth of common stock of the acquiring company for $60.  The
Rights will expire at the close of business on February 18, 2013, unless the
Rights Plan is extended by the Company's Board of Directors or unless the
Rights are earlier redeemed by the Company at a price of $.0001 per Right.
The Rights are not exercisable during the time when they are redeemable
by the Company.

            (13) Selected Quarterly Financial Data (Unaudited)
                                            Quarter
2003                            First      Second        Third       Fourth
Fee income                   $ 86,128    $ 63,189   $   80,308  $    28,562
Operating loss             (1,322,764) (1,068,785)    (937,918)  (1,473,616)
Net loss                   (1,312,927) (1,061,590)    (931,185)  (1,466,606)
Basic and diluted net loss
    per common share (1)         (.11)       (.09)        (.07)        (.11)

2002                             First      Second       Third        Fourth
Fee income                    $ 53,125    $ 28,125   $  31,519  $    104,750
Operating loss              (1,029,689) (1,160,201) (1,083,823)     (998,937)
Net loss                      (920,867) (1,041,761) (1,031,318)     (957,170)
Basic and diluted net loss
    per common share (1)          (.08)       (.09)       (.08)         (.08)

  (1)  Since per share information is computed independently for each quarter
       and the full year, based on the respective average number of common
       shares outstanding, the sum of the quarterly per share amounts does not
       necessarily equal the per share amounts for the year.

                              SCHEDULE II




                    RESEARCH FRONTIERS INCORPORATED

                   VALUATION AND QUALIFYING ACCOUNTS


             Years ended December 31, 2003, 2002, and 2001



                                    Balance at   Charged to            Balance
                                    beginning    costs and             at end of
Description                         of period    expenses   Deductions period

Allowance for uncollectible
 royalty receivables:

December 31, 2003                   $     0    $  50,000    $     0    $50,000

December 31, 2002                   $     0    $       0    $     0    $     0

December 31, 2001                   $     0    $       0    $     0    $     0