SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                 FORM 10-K

             ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) of
                  THE SECURITIES AND EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 1998  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]

As of March 26, 1999 there were 10,952,930 shares of Research Frontiers
Incorporated common stock outstanding (of which 935,017 shares were held, 
either directly or indirectly, by affiliates of the Company), and the aggregate
market value of the common shares (based upon the closing trading price of these
shares on NASDAQ on March 26, 1999) held by non-affiliates was approximately
$77,012,706. 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."

                       Exhibit Index at pages 15-18
                               Page 1 of 37
                                     <PAGE>

                              PART I

ITEM 1.  BUSINESS

General

     Research Frontiers Incorporated (the "Company") was incorporated
in New York in 1965 and reincorporated in Delaware in 1989.  Since its
inception, the Company has primarily engaged in the development and
licensing of suspended particle technology and devices to control the
transmission of light.  Such suspended particle devices, often referred to
as "SPDs" or "light valves" use a suspension of microscopic particles that
is either in the form of a liquid suspension or a film, which is usually
enclosed between two glass or plastic plates having transparent, electrically
conductive coatings on the facing surfaces thereof. At least one of the two
plates is transparent.  When an electrical voltage is applied, the
microscopic particles are aligned, thereby permitting a range of
transparency within which light transmission can be rapidly varied to any
degree desired depending upon the voltage applied.  The first light valve
of this type was invented by Dr. Edwin Land of Polaroid Corporation in
1934.  Since its incorporation the Company has developed its own
technology embodied in patents, trade secrets and know how.  Light valves
using the Company's proprietary suspensions and related technology may
have wide commercial applications in devices of many types where
variable light transmission is desired, such as "smart" windows, variable
light transmission eyewear including sunglasses and goggles, self-
dimmable automotive sunroofs, sun visors and mirrors, and flat panel
information displays for use in computers, televisions, telephones and other
electronic instruments.

     The Company expects to compete against various technologies that
are currently being used commercially.  In particular, the Company expects
to compete on the basis of the performance characteristics of its products
with liquid crystal displays ("LCDs").  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.  The market for flat panel LCDs estimated by others was
approximately $13.8 billion for 1998.  The Company believes that some of
its licensees may begin to challenge liquid crystal displays with SPDs for
part of the LCD market during the next several years.

     The Company believes that its SPD light valves and related
technology have 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 (i) higher contrast and
brightness, (ii) a wider angle of view, (iii) lower estimated production
costs, (iv) a less complex fabrication procedure, (v) the ability to function
over a wider temperature range, (vi) the ability to make displays without
using sheet polarizers or alignment layers, and (vii) 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.

     The Company also believes that its SPD light valve technology will
have 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: "smart" technologies that can be controlled electrically by the
user either automatically or manually, and passive technologies that can
only react to ambient environmental conditions.  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 end of the
temperature range in which smart windows are normally expected to
operate.

     The second category of variable light transmission window
technology comprises user-controllable "smart" technologies:  These
"smart" technologies include electrochromic technology, liquid crystal
technology, and the Company's SPD technology.

     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: (i) faster response time, (ii) lower estimated costs,
(iii) more reliable performance over a wider temperature range, (iv)
capability of achieving darker off-states, (v) lower current drain, (vi)
higher estimated battery life in applications where batteries are used, and
(vii) 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.

     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
Vitrage SA, Polytronix, Inc. and 3M (which has also reportedly
discontinued recently its liquid crystal film making operations).  These
windows are very expensive (having an estimated installed cost of about
$85-100 per square foot), 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, could be viewed at wide angles without a light
scattering haze effect when activated, would operate over a wider
temperature range, and would permit an infinite number of intermediate
states between a transparent state with no visible haze to a dark blue state.

     LCDs and other types of displays, as well as electrochromic self-
dimmable rear-view mirrors, are already on the market, whereas the
performance and long-term reliability of SPD light valves have not yet
been fully ascertained.  The companies manufacturing LCD and other
display devices, LCD windows, and electrochromic self-dimmable rear-
view mirrors, 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 and
therefore revenue analysis per 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.

     On March 26, 1999, the Company had eleven full-time employees,
six of whom are technical personnel, and five of whom perform legal,
marketing, investor relations, and administrative functions.  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. 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.

Licensing Activities

     The Company's current marketing efforts have taken the form of
offering other companies (both domestic and foreign) the opportunity to
enter into license agreements with the Company for one or more specific
fields of use.  The following table summarizes the Company's license and
option agreements as of December 31, 1998 and the year they were entered
into:

Licensee or Optionee          Products Covered                      Territory  

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

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

Hankuk Glass Industries Inc. Broad range of SPD light control products Worldwide
                             including windows, flat panel displays, 
                             automotive vehicle rear-view mirrors,
                             sun visors, and sunroofs; SPD film for 
                             licensees and prospective licensees (1997)

Japan Steel Works Ltd. and   Windows (1989)                            Japan
Central Glass Company Ltd.

Material Sciences Corp.      Architectural and automotive windows,     Worldwide
                             SPD film for other licensees, prospective
                             licensees and architectural and automotive
                             window companies (1997)

Vision-Ease Lens Azusa, Inc. Eyewear (1997)                           Worldwide

Saint Gobain Vitrage, S.A.   Architectural Windows (option) (1994)    Worldwide
                                                                   (except Korea
                                                              and South America)

Sanyo Electric Co., Ltd.     Flat panel displays (1995)              Worldwide 

Licensees will pay Research Frontiers a 3-10% royalty on the sale of
licensed products, and may also be required to pay the Company minimum
annual royalties.  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 the
Company's patents remain in effect. The license granted to Hankuk Glass
Industries is exclusive within Korea for certain applications through
December 2004. Vision-Ease's license for eyewear is exclusive during the
term of the license. To the Company's knowledge, three of its licensees,
Hankuk Glass Industries, Vision-Ease, and Material Sciences Corporation,
currently have active programs for developing SPD products.  One or more
other licensees may become more active if and when an SPD film becomes
available. To the extent that an inactive licensee's license agreement is
listed above, it is only done so as a matter of completeness to reflect those
companies who the Company believes are permitted to use SPD
technology, and does not imply that these inactive licensees will produce
products in the future using SPD technology, or that their license
agreement permitting them to do so will remain in effect. The Company is
currently discussing with Sanyo Electric Co., Ltd. the status of their license
agreement with the Company, and whether the license agreement will
remain in effect.

     The Company's license agreement listed above with Japan Steel
Works, Ltd. and Central Glass Co., Ltd. expired by its terms on February
16, 1999.  This license agreement covered SPD liquid suspensions, but did
not cover SPD films.  The film form of SPD technology is necessary in
order to produce large size SPD smart windows.  The Central Glass Co.,
Ltd. is currently holding talks with the Company regarding a possible new
license agreement that would cover SPD films.

     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 that any licensee of the Company will
produce or sell commercial products using the Company's technology.

     The Company plans to continue to exploit its SPD light valve
technology by entering into additional license 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 liquid
suspensions and films.  The Company's plans also call for further
development of its SPD light valve technology and the provision of
additional technological assistance to its licensees to develop commercially
viable products.  The Company cannot predict when or if new license
agreements will be entered into or if commercial products will result from
its existing or future licenses 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.  To date, no licensed products have
been sold under any of the Company's license agreements.

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, sun
visors 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.  Although the Company believes
that the state of development of its technology is sufficiently advanced that
commercial products should be producible hereafter by its licensees, such
potential commercialization is beyond the control of the Company.  In
addition, the Company intends to continue its research and development
efforts for the foreseeable future to improve its SPD light valve technology
and thereby assist in the potential commercialization of the Company's
SPD light valve technology by the Company's licensees.

     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, eyewear, mirrors and flat panel displays.  The
Company expended approximately $1,647,000, $1,831,000, and
$1,712,000 during the years ended December 31, 1998, 1997, and 1996,
respectively, for research and development.  The Company plans to engage
in substantial continuing research and development activities.  Six of the
Company's eleven full-time employees are principally engaged in the
Company's research and development activities. 

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

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

Patents and Proprietary Information

     The Company has 17 United States patents in force.  Six United
States patent applications are pending.  The Company's United States
patents expire at various dates from 2000 through 2015.  The Company has
approximately 30 issued patents and a substantial number of patent
applications pending in foreign countries. The Company's foreign patents
expire at various dates from 1999 through 2014. 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 1993, 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 April 12, 1993.  If a
person or group has acquired beneficial ownership of, or commences a
tender or exchange offer for, 20% 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 $90 worth of common stock for $45.  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 $90 worth of common stock of the acquiring company
for $45.  The Rights will expire at the close of business on February 16,
2003, unless earlier redeemed by the Company at a price of $.0000424 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 currently occupies approximately 8,100 square feet of
space at a minimum annual rental of approximately $105,000 (which rises
over the term of the lease to approximately $113,500) for its executive
office and research facility at 240 Crossways Park Drive, Woodbury, New
York 11797 under a lease expiring January 31, 2004. The Company
believes that its space, including its laboratory facilities, is adequate for
its present needs.

ITEM 3.  LEGAL PROCEEDINGS

     On March 25, 1999, the Company was served with a summons in an
action brought in the Supreme Court of the State of New York, County of
Nassau, by Jean Thompson in her individual capacity and as Executrix of
the estate of Robert I. Thompson, a former officer and director of the
Company. The action does not seek monetary damages and  essentially
seeks a declaration that certain common stock of the Company securing
loans made to Mr. Thompson are not available as collateral to secure such
loans.  The Company has referred this matter to outside counsel and does
not believe that the action has merit, or, if the declaratory relief sought in
the action is granted, that this would have a material adverse impact on the
financial position, operations or liquidity of 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
     AND RELATED STOCKHOLDER MATTERS

(a)  Market Information

     (1)  The Company's common stock is traded on the NASDAQ
National Market. As of March 26, 1999, there were 10,952,930 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, 1997               5.6250         9.8750
          June 30, 1997                4.8750         7.8750
          September 30, 1997           5.8750        11.6250
          December 31, 1997            7.0625        10.1250
          March 31, 1998               6.5000         9.7500
          June 30, 1998                5.6250         8.3750
          September 30, 1998           5.4375         7.6250
          December 31, 1998            5.7500        11.1250
          ------------------------                       
          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 26, 1999, there were 612 holders of record of the
Company's common stock.   The Company estimates that there are over
8,500 beneficial holders of the Company's common stock.

(c)  Dividends

     The Company did not pay dividends on its common stock in 1998
and does not expect to pay any cash dividends in the foreseeable future. 
There are no restrictions on the payment of dividends.

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 financial statements and notes
thereto, all of which are contained in this Annual Report on Form 10-K.

                                        Year ended December 31,           
                         1998        1997        1996       1995         1994
Statement of 
 Operations Data:
 Fee income          $  108,735 $    60,000 $    50,000  $    1,500   $  574,965
 Operating expenses   1,631,179   1,884,038   1,226,410   1,226,691    1,325,761
 Research and 
  development         1,647,448   1,831,397   1,711,634   1,410,443    1,395,942
                      3,278,627   3,715,435   2,938,044   2,637,134   2,721,703
 Operating loss      (3,169,892) (3,655,435) (2,888,044) (2,635,634) (2,146,738)
 Other income            91,379          --          --          --          --
 Net investment
  income (loss)(1)      460,572     425,990     413,206    (283,088)   (776,970)
 Net loss            (2,617,941) (3,229,445) (2,474,838) (2,918,722) (2,923,708)
 Basic and diluted net 
  loss per common share    (.24)       (.32)       (.25)       (.32)       (.33)
 Dividends per share         --          --          --          --          --

                                           As of December 31,             
                                
                          1998       1997       1996        1995        1994

Balance Sheet Data:
 Total current assets $6,728,453 $9,728,285 $ 8,193,639 $ 9,871,002 $ 7,232,454
 Total assets          7,021,291 10,033,663   8,425,141  10,026,113   7,425,278
 Long-term debt,including
  accrued interest            --         --          --          --          --
 Total share-
  holders' equity      6,740,489  9,621,979   8,216,847   9,783,060   7,234,613

(1)   Net investment income (loss) for 1998, 1997, 1996 and 1995 includes
      $50,968, $68,810, $211,360 and $7,073, respectively, of interest income
      received from officers of the Company upon payment of notes receivable,
      and $0, ($6,382), $1,174,643, and ($268,100), respectively of unrealized
      gain (loss) on investments. Prior to July 1997, the Company classified its
      investments as trading securities which resulted in the unrealized gains 
      and losses recorded in the statement of operations.

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

Results of Operations

Year ended December 31, 1998 Compared to the Year ended December 31, 1997

     The Company's fee income from licensing activities for 1998 was
$108,735 as compared to $60,000  for 1997. 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 for the current
accounting period, will be recognized as fee income in future periods. 
During1998, the Company also received $135,000 of key man life
insurance proceeds payable on the death of its former Executive Vice
President, Robert I. Thompson.  This resulted in the Company recording
non-recurring other income of $91,379 during 1998 representing the
difference between the amount received by the Company and the cash
surrender value of such life insurance policy that was previously recorded
on the Company's balance sheet.

     Operating expenses decreased by $252,859 to $1,631,179 for 1998
from $1,884,038 for 1997.  This decrease was the result of decreased
expenses associated with the issuance of warrants for services performed,
consulting, travel expenses and salaries, offset by increased insurance and
depreciation expenses.  In addition, during 1997 the Company recorded
non-cash expenses associated with the exercise of certain stock options,
and one-time increased listing fees in connection with the Company's
initial listing on the Nasdaq National Market System during 1997 which
expenses did not recur in 1998.

     Research and development expenditures decreased by $183,949 to
$1,647,448 for 1998 from $1,831,397 for 1997. This decrease was
primarily the result of decreased research-related consulting and payroll
expenses offset by higher costs for materials,  insurance and patent
expenses.

     The Company's net gain from its investing activities for 1998
increased to $409,604 from a net gain from its investing activities of
$357,180 for 1997.  This difference was primarily a result of increased
interest income earned in 1998 due to higher level average investment
balances in 1998 compared to the prior year as a result of the Company
receiving $5.0 million towards the end of 1997 in connection with the
issuance of the redeemable prepaid warrant.

     As a consequence of the factors discussed above, the Company's net
loss decreased by $611,504 to $2,617,941 ($0.24 per share) for the year
ended December 31, 1998 as compared to $3,229,445 ($0.32 per share) for
the year ended December 31, 1997.

Year ended December 31, 1997 Compared to the Year ended December 31, 1996

     The Company earned $60,000 in fee income for the year ended
December 31, 1997 compared to $50,000 for the year ended December 31, 1996.

     Operating expenses increased to $1,884,038 for the year ended
December 31, 1997 from $1,226,410 for the year ended December 31,
1996.  This was primarily the result of increased  public relations, payroll,
insurance, travel, and depreciation expenses as well as increased listing
fees in connection with the Company's initial listing on the Nasdaq
National Market System, and non-cash expenses associated with the
exercise of certain stock options and with the issuance of certain warrants.

     Research and development expenditures increased to $1,831,397 for
the year ended December 31, 1997 from $1,711,634 for the year ended
December 31, 1996, primarily as a result of increased research-related
consulting expenses, costs for materials, depreciation expenses relating to
laboratory equipment, and salary expenses relating to the hiring of two new
scientists by the Company, offset somewhat by decreased costs related to
patents and outside consultants.  Management estimates that research and
development costs for 1998 will reflect a modest increase over 1997 levels. 
Such costs, however, cannot be predicted with any significant degree of
accuracy since they will be based on future staffing levels, which in turn
will be dependent upon new developments and the degree of support
necessary to assist existing and prospective licensees.

     The Company's net gain from its investing activities for the year
ended December 31, 1997 was $357,180 as compared to a gain from its
investing activities of $201,846 for the year ended December 31, 1996. 
This improvement reflects the impact of the Company's investment
primarily in U.S. Treasury securities during 1997, where in 1996
investment income included the impact of realized losses incurred by the
Company on the sale of certain marketable equity securities.  The
Company intends to continue to invest in U.S. Treasury securities and in
other interest-bearing money market funds and bank accounts.

     The net loss was $3,229,445 ($.32 per share) for the year ended
December 31, 1997 as compared to $2,474,838 ($.25 per share) for the
year ended December 31, 1996.  The increase in the net loss was a result
of the combined effect of the factors discussed above.

Financial Condition, Liquidity and Capital Resources

     The Company's cash and marketable investment securities balance
decreased by $3,064,202 from $6,592,669 at December 31, 1998 from
$9,656,871 at December 31, 1997.  This decrease was  principally as a
result of cash used to fund the Company's net loss of $2,617,941, changes
in working capital of $141,630, purchase of  fixed assets of $137,469, and
the repurchase and retirement by the Company of 118,600 shares of the
Company's common stock for $747,716, offset by the receipt of $460,476
from the exercise of options and warrants, and repayment in cash of notes
receivable from officers of $40,000.  At December 31, 1998, the Company
had working capital of $6,447,651 and its shareholders' equity was $6,740,489.

     On October 1, 1998, the Company announced that Ailouros Ltd., a
London-based institutional money management fund, has committed to
purchase up to $15 million worth of  common stock of Research Frontiers
through December 31, 2001.  This commitment is in the form of a Class A
Warrant issued to Ailouros Ltd. which gives Research Frontiers 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 Research
Frontiers 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 Research Frontiers from time to time.  The
pricing is subject to an overall cap of $15 per share.  However, Research
Frontiers 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 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
initially exercisable into 65,500 shares.  If the Company has not sent
Ailouros at least three put notices by December 31, 2001, under certain
circumstances the Class B Warrant will be exercisable into an additional
65,500 shares.  Ailouros paid the Company $10,000 upon issuance of the
Class A Warrant and the Class B Warrant.

     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 expenditures, assumed ten percent annual increases
therein, existing cash reserves and budgeted revenues, the Company
believes that it would not require additional funding for at least the next
two to three years (without giving effect to any financing raised from
Ailouros as described above).  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.

     The Year 2000 issue is a result of many computer programs using
only two digits to identify a year in the date field.  These programs were
designed and developed without considering the impact of the upcoming
change in the century.  If not corrected, many computer applications could
fail or create erroneous results by or at the Year 2000.   The Company is
aware of the issues associated with the programming code in existing
computer systems as the millennium (Year 2000) approaches.  Although
there cannot be absolute assurance,  the Company has assessed and
considered the impact of Year 2000 issues on its internal computer systems
and applications and believes that they are Year 2000 compliant.  In
addition, the Company believes that there are no key suppliers, vendors or
other entities with which the Company does business which are not either
Year 2000 compliant or taking steps to achieve Year 2000 compliance on
a timely basis.  The Company has no mission-critical systems which would
be adversely affected by Year 2000 issues, and has received confirmations
from key outside vendors and other parties that they are or expect to be
Year 2000 compliant. Therefore, the Company believes that the
consequences of a change to the Year 2000 should not have a material
impact on the Company's business, results of operations, or financial
condition.

     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.

Inflation

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

New Accounting Pronouncement
     
The Financial Accounting Standards Board has issued Statement No. 133
related to "Accounting for Derivative Instruments and Hedging Activities"
(Statement 133).  Statement  133 established accounting and reporting
standards for derivative instruments embedded in other contracts, and for
hedging activities.  Statement 133 is effective for all fiscal quarters of all
fiscal years beginning after June 15, 1999.  Early application of all of the
provisions of Statement 133 is encouraged but is permitted only as of the
beginning of any fiscal quarter that begins after the issuance of this
Statement.  Management of the Company does not believe that the
implementation of Statement 133 will have a significant impact on its
financial position or results of operations.  For each of the years in the
three-year period ended December 31, 1998 the Company had no
derivative instruments or hedging activities as defined by Statement 133.

ITEM 7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK

     The Company invests available cash and cash equivalents in short-
term U.S. treasury securities with maturities that are generally less than one
year.  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 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 financial statements listed in Item 14(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.

                             PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The 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, 1999, in connection with the
Company's Annual Meeting of Stockholders scheduled to be held on June
10, 1999.

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, 1999, in connection with the
Company's Annual Meeting of Shareholders scheduled to be held on June
10, 1999.  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, 1999, in connection with the
Company's Annual Meeting of Stockholders scheduled to be held on June
10, 1999.

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, 1999, in connection with the
Company's Annual Meeting of Stockholders scheduled to be held on June
10, 1999.

                             PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K

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

     The following 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

Financial Statements:

    Balance Sheets,
         December 31, 1998 and 1997. . . . . . . . . . . . . . . . .         F-2

    Statements of Operations,
         Years ended December 31, 1998, 1997 and 1996. . . . . . . .         F-3

    Statements of Shareholders' Equity,
         Years ended December 31, 1998, 1997 and 1996. . . . . . . .         F-4

    Statements of Cash Flows,
         Years ended December 31, 1998, 1997 and 1996. . . . . . . .         F-5

Notes to 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 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     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.

4.3     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. 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. (filed
        herewith).

10.6    License Agreement dated February 16, 1989 among the
        Company, the Japan Steel Works, Ltd. and the Central Glass
        Company, Ltd.  Previously filed as an exhibit to the Company's
        Annual Report on Form 10-K for the fiscal year ended
        December 31, 1988 and incorporated herein by reference.

10.7    Option Agreement effective as of June 1, 1994 between the
        Company and Saint-Gobain Vitrage International SA (now
        known as Saint-Gobain Vitrage SA).  Previously filed as an
        Exhibit to the Company's Current Report on Form 8-K dated
        June 9, 1994 and incorporated herein by reference.

10.8    License Agreement effective as of February 17, 1995 between
        the Company and Sanyo Electric Co., Ltd.  Previously filed as
        an Exhibit to the Company's Current Report on Form 8-K/A
        dated April 17, 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.

10.9    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.

10.10   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.

10.11   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.

10.12   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.

10.13   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.

21      Subsidiaries of the Registrant - None

23      Consent of KPMG LLP - Filed herewith.
                                                                  
*    Executive Compensation Plan or Arrangement.

     (b)  Reports on Form 8-K:

     No reports on Form 8-K have been filed by the Registrant during the
last quarter of the period covered by this report.<PAGE>


                            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

                                        
                    By:  /s/Robert L. Saxe                     
                            Robert L. Saxe, President and Treasurer
                    (Principal Executive, Financial, and Accounting Officer)

Dated:  March 26, 1999

     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 26, 1999
   Robert M. Budin


/s/Bernard D. Gold                           Director             March 26, 1999
   Bernard D. Gold

/s/Joseph M. Harary                          Director             March 26, 1999
   Joseph M. Harary

/s/Robert L. Saxe                            Director, President  March 26, 1999
   Robert L. Saxe                            and Treasurer<PAGE>



                   Independent Auditors' Report



The Shareholders and Board of Directors
Research Frontiers Incorporated:


We have audited the accompanying balance sheets of Research Frontiers
Incorporated as of December 31, 1998 and 1997, and the related statements
of operations, shareholders' equity and cash flows for each of the years in
the three-year period ended December 31, 1998.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  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 financial statements referred to above present fairly, in
all material respects, the financial position of Research Frontiers
Incorporated at December 31, 1998 and 1997 and the results of its
operations and cash flows for each of the years in the three-year period
ended December 31, 1998 in conformity with generally accepted
accounting principles.


                              /s/ KPMG LLP


Melville, New York
February 19, 1999, except as to
note 11, which is as of March 25, 1999<PAGE>

                                    
                                    
                                    
                     RESEARCH FRONTIERS INCORPORATED
                                    
                             Balance Sheets
                                    
                       December 31, 1998 and 1997
                                                     
                    Assets                               1998           1997

Current assets:
  Cash and cash equivalents                         $  5,403,283     2,157,687
  Marketable investment securities-held-to-maturity    1,189,386     7,499,184
  Accrued interest and dividends receivable                3,071        43,007
  Prepaid expenses and other current assets              132,713        28,407
              Total current assets                     6,728,453     9,728,285

Fixed assets, net                                        269,084       228,002
Deposits and other assets                                 23,754        77,376

              Total assets                          $  7,021,291    10,033,663

     Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable                                  $    115,418       114,738
  Deferred revenue                                        56,250            --
  Accrued expenses                                       109,134       296,946

               Total liabilities                         280,802       411,684

Shareholders' equity:
  Common stock, par value $0.0001 per share; authorized
   100,000,000 shares, issued and outstanding 10,929,041
   and 10,342,195 shares for 1998 and 1997                1,093          1,034
  Additional paid-in capital                         33,982,066     34,787,860
  Accumulated deficit                               (26,357,709)   (23,739,768)

                                                      7,625,450     11,049,126

  Notes receivable from officers                       (884,961)    (1,427,147)

               Total shareholders' equity             6,740,489      9,621,979

Commitments and contingency

       Total liabilities and shareholders' equity    $7,021,291    10,033,663

See accompanying notes to financial statements.<PAGE>
                                    
                                    
                                    
                     RESEARCH FRONTIERS INCORPORATED
                                    
                        Statements of Operations
                                    
              Years ended December 31, 1998, 1997 and 1996
                                    
                                      1998        1997           1996        
  
Fee income                    $    108,735      60,000         50,000
  
Operating expenses               1,631,179   1,884,038      1,226,410
Research and development         1,647,448   1,831,397      1,711,634
                                 3,278,627   3,715,435      2,938,044
  
            Operating loss      (3,169,892) (3,655,435)    (2,888,044)
  
Net investment income              409,604     357,180        201,846
Other income                        91,379          --             --
Interest income on notes 
 receivable from officers           50,968      68,810        211,360
  
              Net loss        $ (2,617,941) (3,229,445)    (2,474,838)
  
Basic and diluted net loss 
 per common share             $      (0.24)      (0.32)         (0.25)
  
Weighted average number of 
common shares outstanding       10,878,141  10,201,961      9,924,875
  
See accompanying notes to financial statements.<PAGE>


                                     RESEARCH FRONTIERS INCORPORATED
                                   Statements of Shareholders' Equity
                              Years ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                 Common Stock     Additional       Accumulated    Treasury       Notes
                               Shares     Amount  Paid in Capital  Deficit      Stock, at cost   Receivable   
Total

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

Balance, December 31, 1995   9,830,761   $    983   28,399,562    (18,035,485)              --   
(582,000) 9,783,060

Issuance of common stock       305,021         31    1,634,171             --          (85,383)         -- 
1,548,819
Purchase of treasury stock          --         --           --             --          (78,841)         --    (78,841)
Repayment of note by officer        --         --           --             --         (513,853)    302,500  
(211,353)
Retirement of treasury stock   (68,885)        (7)    (678,070)            --          678,077          --        
--
Net loss                            --         --           --      (2,474,838)             --          -- (2,474,838)
Loans to officers                   --         --           --              --              --    (350,000)  (350,000)
Balance, December 31, 1996   10,066,89   $  1,007   29,355,663     (20,510,323)             --   
(629,500) 8,216,847

Issuance of common stock       352,298         35    1,411,296              --              --          -- 
1,411,331
Purchase of treasury stock          --         --           --              --        (126,637)         --   (126,637)
Repayment of note by officer        --         --           --              --        (560,629)    592,353     31,724
Retirement of treasury stock   (77,000)        (8)    (687,258)             --         687,266          --        
--
Net loss                            --         --           --      (3,229,445)             --          -- (3,229,445)
Loans to officers                   --         --           --              --              --  (1,390,000)(1,390,000)
Net proceeds from issuance of
 redeemable prepaid warrants        --         --    4,626,985              --              --          --  4,626,985
Issuance of warrants 
 for services performed             --         --       81,174              --              --          --     81,174

Balance, December 31, 1997  10,342,195  $   1,034   34,787,860     (23,739,768)             -- 
(1,427,147) 9,621,979

Issuance of common stock       759,162         76      450,400              --              --          --   
450,476
Purchase of treasury stock          --         --           --              --        (747,716)         --   (747,716)
Repayment of note by officer        --         --           --              --        (545,553)    542,186    
(3,367)
Retirement of treasury stock  (172,316)       (17)  (1,293,252)             --       1,293,269          --        
--
Net loss                            --         --           --      (2,617,941)             --          -- (2,617,941)
Proceeds from the
 issuance of warrants               --         --       10,000              --              --          --     10,000
Issuance of warrants 
 for services performed             --         --       27,058              --              --          --     27,058

Balance, December 31, 1998  10,929,041       1,093  33,982,066     (26,357,709)             --   
(884,961) 6,740,489

</TABLE>

See accompanying notes to financial statements.<PAGE>

                       RESEARCH FRONTIERS INCORPORATED
                           Statements of Cash Flows
                 Years ended December 31, 1998, 1997 and 1996         
                                                 1998        1997       1996
Cash flows from operating activities:
 Net loss                                   $(2,617,941) (3,229,445) (2,474,838)
 Adjustments to reconcile net loss to net
  cash provided by (used in) operating
  activities:
   Depreciation and amortization                 96,387      84,486      45,847
   Interest income on officer notes receivable  (43,367)     (8,086)   (211,353)
   Unrealized loss (gain) on investments             --       6,382  (1,174,643)
   Cashless exercise of options                      --     133,555     108,357
   Expense relating to issuance of warrants 
             for services performed              27,058      81,174          --
   Changes in assets and liabilities:
    Accrued interest and dividends receivable    39,936      22,422      16,993
    Prepaid expenses and other current assets  (104,306)     (9,520)      4,812
    Deposits and other assets                    53,622     (13,720)     (5,036)
    Deferred revenue                             56,250          --          --
    Accounts payable and accrued expenses      (187,132)    250,360     (34,759)
    Investments-trading securities                   --   2,985,170     539,413)

Net cash provided by (used in)
  operating activities                       (2,679,493)    302,778  (4,264,033)

Cash flows from investing activities:
 Purchases of held-to-maturity
  treasury securities                        (5,775,715) (9,473,722)         --
  Proceeds of held-to-maturity
   treasury securities                       12,085,513   6,634,350          --
  Purchases of fixed assets                    (137,469)   (144,642)   (117,202)
 
Net cash provided by (used in)
  investing activities                        6,172,329  (2,984,014)   (117,202)

Cash flows from financing activities:
 Loans to officers                                   --  (1,390,000)   (350,000)
 Repayment of principal on
  officer's loans                                40,000      39,810          --
 Proceeds from issuances of
  common stock and warrants                     460,476   1,230,806   1,440,462
 Proceeds from issuance of redeemable 
  prepaid warrant, net                               --   4,626,985          --
 Purchase of treasury stock                    (747,716)   (126,637)    (78,841)

Net cash provided by (used in)
 financing activities                          (247,240)  4,380,964   1,011,621

Net increase (decrease) in cash
 and cash equivalents                         3,245,596   1,699,728  (3,369,614)

Cash and cash equivalents at
 beginning of year                            2,157,687     457,959   3,827,573
Cash and cash equivalents at end of year    $ 5,403,283   2,157,687     457,959

Non-cash financing activities:
 Technology acquisition paid in stock       $        --      46,970          --
Redemption of treasury stock-principal
 payment on officer's note receivable       $   502,186     552,543     302,500
Market value of stock received
 to exercise options                        $        --          --      85,383

See accompanying notes to financial statements.

                RESEARCH FRONTIERS INCORPORATED
                                
                 Notes to Financial Statements
                                
                December 31, 1998, 1997 and 1996

(1)     Business

Research Frontiers Incorporated (the "Company" or "Research Frontiers")
operates in a single 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 a suspension of microscopic particles that is either in the form
of a liquid suspension or a film, which is usually enclosed between two
glass or plastic plates having transparent, electrically conductive coatings
on the facing surfaces thereof. At least one of the two plates is transparent.

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.  Based upon existing levels of expenditures, existing cash
reserves and budgeted revenues, the Company believes that it would not
require additional funding for at least the next two to three years.  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.

(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, 1998
and 1997.


   (b)  Marketable Investment Securities

The Company accounts for its investments in marketable securities under
the provisions of Statement of Financial Accounting Standards No. 115,
"Accounting  for Certain Investment in Debt and Equity Securities"
(Statement 115).  As of July 1, 1997 the Company transferred its
marketable securities from classification as trading securities to held-to-
maturity securities, as management intends and has the ability to hold such
securities until their maturity.  In accordance with Statement 115, held-to-
maturity securities are recorded at cost and trading securities are recorded
at fair value with unrealized holding gains and losses recorded in earnings.
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.

   (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 9) relating to technology developed by
the Company.

   (e)  Basic and Diluted Loss Per Common Share

In February 1997, the Financial Accounting Standards Board issued
Statement 128, "Earnings Per Share" (Statement 128).  Statement 128
replaces the calculation of primary and fully diluted  earnings per share
with basic and diluted earnings per share.  Basic earnings per share
excludes any dilution.  It is based upon the weighted average number of
common shares outstanding during the period.  Dilutive earnings 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 per share equals basic earnings
per share for each of the years in the three-year period ended December 31,
1998 because all common stock equivalents (i.e. options and warrants)
were antidilutive in those periods.

   (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 of patents due to
the uncertainty of the recoverability of these items.

   (h)  Use of Estimates

Management of the Company has made a number of estimates and
assumptions relating to the  reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles. 
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 cash and accounts payable  approximate
fair value because of the short maturity of those instruments.

The fair value of the long-term 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 Option Plan

The Company applies the intrinsic value-based method of accounting
prescribed by Accounting Principles Board ("APB") Opinion No. 25
"Accounting for Stock Issued to Employees," and related interpretations, in
accounting for its fixed plan stock options.  As such, compensation
expense would be recorded on the date of grant only if the current market
price of the underlying stock exceeded the exercise price.

   (l)  Reclassifications

Certain reclassifications have been made to the 1997 and 1996 financial
statements to conform to the 1998 presentation.

   (m)  Comprehensive Income

Effective January 1, 1998, the Company adopted the Statement of
Financial Accounting Standards No. 130,  "Reporting Comprehensive
Income."  This Statement requires that companies disclose comprehensive
income, which includes net income, foreign currency translation
adjustments, minimum pension liability adjustments, and unrealized gains
and losses on marketable securities classified as available-for-sale. 
Because the Company did not have any foreign currency translation
adjustments, minimum pension liability adjustments, or unrealized gains
or losses on marketable securities classified as available-for-sale, for the
years ended December 31, 1998, 1997 and 1996, comprehensive loss
equaled the net loss of $2,617,941, $3,229,445, and $2,474,838,
respectively.

   (n)  Deferred Revenue

The Company has entered into a number of license agreements covering
potential products.  The Company receives minimum annual royalties
under certain license agreements and records fee income for the amounts
earned by the Company.  Certain of the fees are paid to the Company in
advance of the period in which they are earned resulting in deferred
revenue.

(3)     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, 1998 and 1997 were
as follows:
                                                        Gross
                                           Amortized    Unrealized    Fair
                                           Cost         Holding Gain  Value

At December 31, 1998:

U.S. treasury securities (held-to-maturity) 1,189,386      2,828   1,192,214

At December 31, 1997:

U.S. treasury securities (held-to-maturity) 7,499,184     40,373   7,539,557

Maturities of all U.S. treasury securities were less than one year at
December 31, 1998 and 1997.

(4)     Notes Receivable from Officers

In 1993, the Company loaned one of its officers $50,000, and in 1994 the
Company loaned several  officers an aggregate of $529,144.  In January
1995, one officer repaid in full two of these loans with an aggregate
principal balance of $299,644 principally through the surrender of 45,545
shares of the Company's common stock.  In 1996, the Company loaned
several officers an aggregate of $350,000. In March and April 1997, the
Company loaned several officers an aggregate of $1,390,000.  During
1997, officers made aggregate principal payments of $592,353 against such
loans of which $39,810 was paid in cash and $552,543 was paid through
the surrender of the Company's common stock. During 1998, officers
made aggregate principal payments of $542,186 against such loans of
which $40,000 was paid in cash and $502,186 was paid through the
surrender of the Company's common stock.  In connection with the
aforementioned loan repayments, the Company recorded $50,968, $68,810,
and $211,360 in interest income in 1998, 1997 and 1996, respectively, of
which $43,367, $8,086, and $211,360 was paid through the surrender of
the Company's common stock in 1998, 1997 and 1996, respectively.  It is
the Company's policy to record interest income on these notes as received.

Each of the aforementioned loans are due in January 2000.  The loans
relate to the purchase of common stock of the Company; are collateralized
by the pledge of shares of common stock of the Company (note 11); may
be prepaid in part or in full without notice or penalty; are represented by
a promissory note which bears interest at a rate per annum equal to the
broker call rate (6.50% at December 31, 1998 and 7.25% at December 31,
1997) in effect on the first day of each calendar quarter; and permit
repayment of the loan by delivery of securities of the Company having a
fair market value equal to the balance of the loan outstanding.

(5)     Fixed Assets

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

                                 1998         1997     Estimated useful life

Equipment and furniture    $  766,610      662,162     5 years
Leasehold improvements        228,076      195,055     Life of lease or
                              994,686      857,217     estimated life if shorter

Less accumulated depreciation
   and amortization           725,602      629,215
                           $  269,084      228,002

(6)   Accrued Expenses

Accrued expenses consist of the following at December 31, 1998 and 1997:
     
                                              1998          1997
Payroll, bonuses and related benefits     $ 75,690       276,218
Professional services                       24,000        17,750  
Other                                        9,444         2,978
                                     $     109,134       296,946

(7)     Income Taxes

There was no income tax expense in 1998, 1997 and 1996 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, 1998 and 1997 are
presented below.

                                            1998            1997   
Deferred tax assets:             
 Net operating loss carryforwards      $8,525,000          7,600,000
 Research and other credits               525,000            450,000
    Total gross deferred tax assets     9,050,000          8,050,000

 Less valuation allowance               9,050,000          8,050,000
                                               --                 --

The Company has recorded a 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, 1998, the Company had a net operating loss carryforward
for federal income tax purposes of approximately $21,345,000, varying
amounts of which will expire in each year from 1999 through 2018.
Research and other credit carryforwards of $525,000 are available to the
Company to reduce income taxes payable in future years principally
through 2018.

(8)     Shareholders' Equity

   (a)  Sale of Common Stock and Warrants

During 1996, the Company received $1,440,462 of net cash proceeds from
the issuance of 250,955 shares of common stock, as follows: a private
placement of 172,019 shares of common stock resulting in proceeds of
$1,187,511; the issuance of 49,687 shares of common stock from the
exercise of warrants resulting in proceeds of $94,999; and the issuance of
29,249 shares of common stock from the exercise of unit purchase
warrants resulting in proceeds of $157,952.  In addition,  54,066 shares of
common stock were issued, of which 43,125 shares were exercised through
the surrender of 9,357 shares of common stock and 10,941 shares for
which payment was received through the cancellation of 37,121 options
resulting in compensation expense of $108,357.

During 1997, the Company received $5,857,791 of net cash proceeds from
the issuance of 326,803 shares of common stock, as follows: a private
placement of 91,668 shares of common stock resulting in proceeds of
$475,004; the issuance of 26,750 shares of common stock from the
exercise of warrants resulting in proceeds of $187,250; net proceeds of
$4,626,985 from the issuance of a redeemable prepaid warrant (note 8(e))
with the issuance of 122,685 shares of common stock from the partial
exercise of this warrant, and the issuance of 85,700 shares of common
stock from the exercise of options resulting in net proceeds of $568,552. 
In addition, 16,695 shares were issued through the cancellation of  7,397
options, resulting in compensation expense of $133,555; and 8,800 shares
issued to acquire certain technology pursuant to a license agreement.

During 1998, the Company received $460,476 of net cash proceeds from
the issuance of 70,489 shares of common stock from the exercise of
options and warrants, as follows: the issuance of 36,600 shares of common
stock from the exercise of options resulting in net proceeds of $217,476;
and the issuance of 33,889 shares of common stock from the exercise of
warrants resulting in net proceeds of $233,000.  The Company also issued
688,673 shares of common stock pursuant to the exercise of the remaining
outstanding redeemable prepaid warrant.  In  addition, the Company
received  $10,000 from the issuance of the Class A Warrant and Class B
Warrant. (note 8(f)).

   (b)  Options, Warrants and Unit Purchase 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 has 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, 1998, no options were available for
issuance under this Plan.

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 has reserved 540,000 shares of its common
stock for issuance under this plan.  As of December 31, 1998, awards for
76,248 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. 
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.  During 1998, options were exercised that resulted in the
issuance of 36,600 shares of common stock.

Activity in stock options is summarized below:

                              Number of Shares       Weighted Average
                              Subject to Option      Exercise Price    

Balance at December 31, 1995      764,940                $  7.83
   Granted                        327,400                $  8.24
   Cancelled                      (52,371)               $  3.14
   Exercised                     ( 54,066)               $  2.98

Balance at December 31, 1996      985,903                $  8.20
   Granted                        195,800                $  6.00
   Cancelled                       (8,397)               $  3.77
   Exercised                     (102,395)               $  5.95

Balance at December 31, 1997    1,070,911                $  8.05
   Granted                        526,300                $  7.23
   Cancelled                      (65,452)               $  8.53
   Exercised                     ( 36,600)               $  5.94

Balance at December 31, 1998    1,495,159                $  7.79

The outstanding options have a weighted-average contractual life of 7.71
years at December 31, 1998. At December 31, 1998, the number of options
exercisable was 1,467,359 at a weighted average exercise price of $7.80
per share.  These options are exercisable at a range of prices from $3.73 to
$14.85 per share.  The remaining 27,800 options become exercisable
during 1999. 

The per share weighted average fair value of warrants issued to directors
and stock options granted during 1998, 1997 and 1996 were approximately
$3.27, $2.92 and $3.51, 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
December 1998          0 %             4.540%         57.980%          3.50
August 1998            0 %             5.135%         55.330%          3.50
June 1998              0 %             5.505%         56.582%          3.50
June 1997              0 %             6.260%         57.430%          3.75
November 1996          0 %             5.790%         49.920%          3.50
June 1996              0%              6.530%         50.820%          3.50

The Company applies APB Opinion No. 25 in accounting for its stock
option plans and, accordingly, no compensation cost has been recognized
for its stock options and warrants in the financial statements as the exercise
price of such instruments were equal to the fair value of the Company's
common stock at the date of grant.  Had the Company determined
compensation cost based on the fair value at the grant date for its stock
options under SFAS No. 123, the Company's net loss and net loss per
share would have been increased to the pro forma amounts indicated
below:



                                           1998          1997          1996

Net loss                As reported  $ (2,617,941) $ (3,229,445) $ (2,474,838)
                        Pro forma    $ (4,409,868) $ (3,731,702) $ (3,747,886)

Basic and diluted net
 loss per common share  As reported       $ (0.24)      $ (0.32)      $ (0.25)
                        Pro forma         $ (0.41)      $ (0.37)      $ (0.38)

Pro forma net loss reflects only options and warrants granted since January
1, 1995.  Therefore, the full impact of calculating compensation cost for
stock options and warrants under Statement 123 is not reflected in the pro
forma net loss amounts presented above because compensation costs for
options and warrants granted prior to January 1, 1995 were not considered. 

   (ii) Warrants

Activity in warrants is summarized below, excluding the effect of the
redeemable prepaid warrant (note 8(e)):

                                       Number of Shares           Exercise
                                 Underlying Warrants Granted      Price      

Balance at December 31, 1995             262,412                  1.47-13.50
   Exercised                             (49,687)                  1.47-4.00
   Terminated                           (100,000)                         --
   Issued                                 98,100 (a)              7.38-11.63

Balance at December 31, 1996             210,825                  5.88-13.50
   Exercised                             (26,750)                       7.00
   Terminated                            (13,125)                       6.43
   Issued                                153,778 (b)               6.00-9.60

Balance at December 31, 1997             324,728                 $5.88-13.50
   Exercised                             (33,889)                  7.00-7.20
   Terminated                            (50,000)                 8.72-11.63
   Issued                                 65,500 (c)                    8.25 
Balance at December 31, 1998             306,339                 $5.88-13.50

(a)     Represents warrants to purchase 5,600 shares at $9.625 per share and
        30,000 shares at $7.375 per share issued to two directors of the
        Company and redeemable warrants to purchase 31,250 shares at $8.72
        per share and 31,250 shares at $11.625 per share issued to institutional
        investors in a private placement of the Company's common stock.

(b)     Represents warrants to purchase 26,000 shares at $6.00 per share
        issued to two directors of the Company; redeemable warrants to
        purchase 13,889 shares at $7.20 per share and 13,889 shares at
        $9.60 per share issued to institutional investors in a private
        placement of the Company's common stock; and warrants to
        purchase 100,000 shares at $7.00 per share in payment for
        investor relations services provided to the Company, which
        vested 25,000 shares per quarter commencing April 1, 1997.

(c)     Represents Class B Warrant to purchase 65,500 shares at $8.25 per
        share issued to an institutional investor in a private placement.  An
        additional 65,500 shares may be issuable under such Class B Warrant
        under certain conditions. See note 8(f).

Warrants generally expire from two to ten years from the date of issuance.
At December 31, 1998, the number of warrants exercisable was 264,339
at a weighted average exercise price of $6.93 per share.

   (iii)     Unit Purchase Warrants

In connection with the 1991 public offering of the Company's common
stock, 7,800 unit purchase warrants rights remained outstanding at the end
of 1995. Such unit purchase warrants enable the holders to purchase
29,249 shares of common stock at an effective exercise price of $5.40 per
share.  During 1996 all of these unit purchase warrants were exercised.   

   (c)  Treasury Stock

During 1998, the Company purchased in the open market and subsequently
retired 118,600 shares of treasury stock with an aggregate cost of
$747,716. During 1997, the Company purchased in the open market and
subsequently retired 17,000 shares of treasury stock with an aggregate cost
of $126,637. During 1996, the Company purchased in the open market and
subsequently retired 10,000 shares of treasury stock with an aggregate cost
of $78,841.

   (d)  Restricted Stock

In connection with a license agreement entered into during 1996 pursuant
to which certain technology was licensed to the Company, the Company
agreed to issue to the licensor 8,800 shares of its common stock as a
licensing fee.  These shares, which were issued in 1997, were discounted
based upon restrictions on transferability and $46,970 was charged to
expense in 1996.

   (e)  Redeemable Prepaid Warrant

In October 1997, a group of institutional investors invested $5,000,000 in
equity capital through the private placement of a redeemable prepaid
common stock warrant.  The warrant, which is redeemable by the
Company or the investors under certain defined  circumstances, is
exercisable over its five-year term only in the form of issuance of common
stock at an exercise price which fluctuates with market conditions.  The net
proceeds of the private placement  after deducting professional fees of
$373,015 were $4,626,985.  This redeemable prepaid warrant was fully
exercised by the holders by July 22, 1998 and is no longer outstanding.  In
connection with the redeemable prepaid warrant, 688,673 and 122,685
shares of common stock were issued in 1998 and 1997, respectively.

   (f)  Class A and Class B Warrants

   On October 1, 1998, the Company announced that Ailouros Ltd., a
London-based institutional money management fund, has committed to
purchase up to $15 million worth of  common stock of Research Frontiers
through December 31, 2001.  This commitment is in the form of a Class A
Warrant issued to Ailouros Ltd. which gives Research Frontiers 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 Research
Frontiers 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 Research Frontiers from time to time.  The
pricing is subject to an overall cap of $15 per share.  However, Research
Frontiers 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 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
initially exercisable into 65,500 shares.  If the Company has not sent
Ailouros at least three put notices by December 31, 2001, under certain
circumstances the Class B Warrant will be exercisable into an additional
65,500 shares.  Ailouros paid the Company $10,000 upon issuance of the
Class A Warrant and the Class B Warrant.

(9)     License and Other Agreements

The Company has entered into a number of license agreements and one
option agreement covering potential products using the Company's SPD
technology. Although the Company may receive minimum annual royalties
under certain of these licenses, to date no products have been sold resulting
in earned royalties under these license agreements.

The following table summarizes the Company's license and option
agreements as of December 31, 1998 and the year they were entered into:

Licensee or Optionee          Products Covered                      Territory  

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

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

Hankuk Glass Industries Inc. Broad range of SPD light control products Worldwide
                             including windows, flat panel displays, 
                             automotive vehicle rear-view mirrors,
                             sun visors, and sunroofs; SPD film for 
                             licensees and prospective licensees (1997)

Japan Steel Works Ltd. and   Windows (1989)                            Japan
Central Glass Company Ltd.

Material Sciences Corp.      Architectural and automotive windows,     Worldwide
                             SPD film for other licensees, prospective
                             licensees and architectural and automotive
                             window companies (1997)

Vision-Ease Lens Azusa, Inc. Eyewear (1997)                           Worldwide

Saint Gobain Vitrage, S.A.   Architectural Windows (option) (1994)    Worldwide
                                                                   (except Korea
                                                              and South America)

Sanyo Electric Co., Ltd.     Flat panel displays (1995)              Worldwide 

Licensees will pay Research Frontiers a 3-10% royalty on the sale of
licensed products, and may also be required to pay the Company minimum
annual royalties.  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 the
Company's patents remain in effect. The license granted to Hankuk Glass
Industries is exclusive within Korea for certain applications through
December 2004. Vision-Ease's license for eyewear is exclusive during the
term of the license.

        (10)    Commitments

The Company has an employment agreement with one of its officers which
provides for an annual base salary of $345,515 through December 31,
1999.

The Company occupies premises under an operating lease agreement
which expires on January 31, 2004 and requires minimum annual rent
which rises over the term of the lease to approximately $113,500. Rent
expense, including other expenses, amounted to approximately $131,000,
$127,000 and $139,000 for 1998, 1997 and 1996, respectively.

        (11)    Contingency

On March 25, 1999, the Company was served with a summons in an action
brought in the Supreme Court of the State of New York, County of Nassau,
by Jean Thompson in her individual capacity and as Executrix of the estate
of Robert I. Thompson, a former officer and director of the Company. The
action does not seek monetary damages and  essentially seeks a declaration
that certain common stock of the Company securing loans made to Mr.
Thompson are not available as collateral to secure such loans.  The
Company has referred this matter to outside counsel and does not believe
that the action has merit, or, if the declaratory relief sought in the action is
granted, that this would have a material adverse impact on the financial
position, operations or liquidity of the Company.<PAGE>

EXHIBIT 10.5.3

                     THIRD AMENDMENT TO LEASE

          THIS AGREEMENT made the 14th day of July, 1998, by
and between INDUSTRIAL & RESEARCH ASSOCIATES CO., with
offices at 7600 Jericho Turnpike, Woodbury, New York 11797,
hereinafter referred to as the "LANDLORD" and RESEARCH
FRONTIERS INCORPORATED, with offices at 240 Crossways Park
Drive, Woodbury, New York 11797, hereinafter referred to as the
"TENANT".

                      W I T N E S S E T H :

          WHEREAS, the parties have heretofore on or about the 7th
day of November, 1986, entered into a certain agreement of lease which
was amended the 26th day of November, 1991 and the 11th day of
March, 1994, for certain premises located at 240 Crossways Park Drive,
Woodbury, New York 11797 and

          NOW, THEREFORE, in consideration of One Dollar and
other good and valuable consideration, each in hand paid to the other,
the receipt whereof is hereby acknowledged and in further consideration
of the mutual covenants contained herein, it is agreed as follows:

          FIRST:  The term of this lease shall be extended for a period
of five (5) years and shall terminate on January 31, 2004.

          SECOND:  LANDLORD, at LANDLORD'S sole cost and
expense, shall provide all work as noted on the floor plan and work
letter attached hereto as Exhibits "A" and "B" respectively.  Such work
shall be ready for occupancy approximately thirty (30) days after the
commencement of the renovations at which time LANDLORD shall
"substantially complete" in good workmanlike order and in compliance
with all applicable laws, regulations, ordinances and building codes, the
work as per the plan and work letter attached.  "Substantially complete"
shall mean to be so completed as to allow TENANT to lawfully occupy
the premises and continue its normal course of business without
interference by the LANDLORD'S workmen.  All "Punch List" items
(consisting of minor decorative items) shall be completed within thirty
(30) days of occupancy of the Demised Premises.

          THIRD: Commencing the 1st day of February 1999,
TENANT shall pay an Annual Basic Rent based upon the following
schedule:

        TERM           BASIC ANNUAL RENT          MONTHLY RENT
02/01/99 - 01/31/00      $105,404.00               $8,783.67
02/01/00 - 01/31/01      $107,431.00               $8,952.58
02/01/01 - 01/31/02      $109,458.00               $9,121.50
02/01/02 - 01/31/03      $111,485.00               $9,290.42
02/01/03 - 01/31/04      $113,512.00               $9,459.33
(Replaces previous rent schedules.)

          FOURTH:  Section "Fifth" of the Second Amendment to
Lease shall be revised to read as follows: "...TENANT shall pay to the
LANDLORD on the first of each month the sum of $2,027.00 per
month for taxes incurred..."

          FIFTH:  Should TENANT be desirous of any additional
space within the building, TENANT shall notify the LANDLORD in
writing.  LANDLORD shall then respond within fifteen (15) days of
receipt of said notice as to whether or not there shall be any space
coming available within the building within the next six (6) month
period.  If any space shall become available within said six (6) month
period, LANDLORD and TENANT shall meet in an effort to negotiate
the applicable business terms for the TENANT'S expansion.

          SIXTH: The foregoing provisions are intended to modify
said lease only in the foregoing respects and such modifications and the
terms hereof as herein set forth are to be strictly construed.  It is further
agreed that except as hereinabove provided all of the terms, covenants
and conditions of said lease dated the 7th day of November, 1986 and
amended the 26th day of November, 1991 and the 11th day of March,
1994, shall continue to remain in full force and effect as therein written
and shall be read and construed together with this instrument.

     IN WITNESS WHEREOF, the parties hereto have hereunto set
their hands and seals the day and year first above written.

INDUSTRIAL & RESEARCH ASSOCIATES CO.

By: /s/  Peter Tilles


RESEARCH FRONTIERS INCORPORATED

By: /s/ Robert L. Saxe
        Robert L. Saxe, President