FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                   Quarterly Report Under Section 13 or 15 (d)
                   Of the Securities and Exchange act of 1934


For Quarter Ended         September 30, 1998

Commission file number    0-14119-NY

                        Polymer Research Corp. of America
             (Exact name of registrant as specified in its charter)

             New York                                          11-2023495   
   (State or other jurisdiction of                          (I.R.S Employer
   incorporation or organization)                          Identification No.)

                   2186 Mill Avenue, Brooklyn, New York 11234
                    (Address of principal executive offices)
                                   (Zip code)

                                 (718) 444-4300
               (Registrants telephone number, including area code)

                                 Not Applicable
             (Former name, former address and former fiscal year, if
                           changed since last report)

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 [_]


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

October 30, 1998                                     1,593,947


<PAGE>


                        POLYMER RESEARCH CORP. OF AMERICA

                                      INDEX


                                                                    Page
                                                                   Number
                                                                   ------
Part I -  FINANCIAL INFORMATION:

          ITEM I - FINANCIAL STATEMENTS

          Balance Sheets:
          September 30, 1998 (Unaudited) and
             December 31, 1997                                        1

          Statements of Operations:
          Three months and nine months ended
          September 30, 1998 and 1997 (Unaudited)                     3

          Statements of Cash Flows:
          Three months and six months ended
          September 30, 1998 and 1997 (Unaudited)                     4

          Notes to Financial Statements                               5-8

          ITEM 2 - MANAGEMENT`S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS                9-10


PART II - OTHER INFORMATION                                           11


<PAGE>


PART I - FINANCIAL INFORMATION
POLYMER RESEARCH CORP. OF AMERICA
BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
--------------------------------------------------------------------------------


                                             September 30,      December 31,
                                                   1998              1997
ASSETS                                       -------------      ------------
                                              (Unaudited)         (Note 1)

CURRENT ASSETS:                                                             
Cash                                         $     902,140      $  1,367,008
Investment-certificates of deposit               1,135,149           155,308
Investment securities available                                             
 for sale                                          397,749           482,940
Accounts receivable, less allowances                                        
 of $0 and $4,000                                  173,671           137,827
Inventories                                         87,825            99,654
Prepaid expenses and other                          87,539            17,504
                                             -------------      ------------
Total current assets                             2,784,073         2,260,241
                                             -------------      ------------
Land, Property, and Equipment-net                2,809,862         2,863,416
                                             -------------      ------------
Deferred financing costs and other                  10,751            11,450
                                             -------------      ------------
Total other assets                                  10,751            11,450
                                             -------------      ------------
TOTAL                                           $5,604,686      $  5,135,107
                                             =============      ============


The accompanying notes are an integral part of these financial statements.
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                                                                               1

<PAGE>


PART I - FINANCIAL INFORMATION
POLYMER RESEARCH CORP. OF AMERICA
BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                 September 30,            December 31,       
                                                                     1998                     1997           
                                                                  (Unaudited)               (Note 1)          
LIABILITIES AND STOCKHOLDERS' EQUITY                             -------------            ------------
------------------------------------                             

<S>                                                              <C>                       <C>        
CURRENT LIABILITIES:
Current portion of long-term debt                                $      30,438            $     31,244
Accounts payable                                                        17,847                  75,548
Accrued expenses and other
 current liabilities                                                   287,311                 349,802
Income taxes payable                                                   265,889                  56,100
Deferred revenue                                                       140,000                 252,450
                                                                 -------------            ------------
Total current liabilities                                              741,485                 765,144
                                                                 -------------            ------------
LONG-TERM DEBT  (NOTE 2)                                             1,429,451               1,451,770
                                                                 -------------            ------------
STOCKHOLDERS' EQUITY:
Common stock, par value $.01 per
share, authorized 4,000,000 shares,
issued 1,685,784 and 1,685,784
 shares respectively                                                    16,857                  15,805
Capital in excess of par value                                       3,120,117               2,850,332
Retained earnings                                                      353,185                 111,029
Unrealized holding gains (losses)                                          328                  (2,236)
Less: Treasury stock, at cost
91,837 shares in 1998 and
 91,837 shares in 1997                                                 (56,737)                (56,737)
                                                                 -------------            ------------
Total Stockholders' Equity                                           3,433,750               2,918,193
                                                                 -------------            ------------
TOTAL                                                            $   5,604,686            $  5,135,107
                                                                 =============            ============
</TABLE>


The accompanying notes are an integral part of these financial statements.
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                                                                               2

<PAGE>


POLYMER RESEARCH CORP. OF AMERICA
STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                                                 Three Months Ended                       Nine Months Ended
                                                                   September 30,                            September 30,
                                                               1998                1997                1998                1997
                                                          -----------         -----------          -----------         -----------
<S>                                                       <C>                 <C>                  <C>                 <C>        
Net revenues:
  Product sales                                           $   239,005         $   332,483          $   788,424         $   885,562
  Research                                                    891,826             940,000            3,892,668           3,217,901
                                                          -----------         -----------          -----------         -----------
  Total                                                     1,130,831           1,272,483            4,681,092           4,103,463
                                                          -----------         -----------          -----------         -----------
Cost of Revenues
  Product sales                                               128,405             198,002              681,556             687,891
  Research                                                    190,907             207,996              733,615             703,256
                                                          -----------         -----------          -----------         -----------
  Total                                                        319,312             405,998            1,415,171           1,391,147
                                                          -----------         -----------          -----------         -----------
Gross Profit on Revenues                                      811,519             866,485            3,265,921           2,712,316

Selling, General, and
 Administrative Expenses                                      764,981             657,340            2,406,777           2,064,519
                                                          -----------         -----------          -----------         -----------
Income  from Operations                                        46,538             209,145              859,144             647,797
                                                          -----------         -----------          -----------         -----------
Other Revenues (Expenses):
  Interest income                                              35,391              16,226               80,141              50,294
  Mortgage modification fee
  Interest expense (see note 2)                               (38,461)            (39,246)            (115,990)           (118,263)
  Rental income (loss)
                                                          -----------         -----------          -----------         -----------
  Total                                                        (3,070)            (23,020)             (35,849)            (67,969)
                                                          -----------         -----------          -----------         -----------
Income before income taxes                                     43,468             186,125              823,295             579,828
Provision for income taxes                                    (30,050)            (86,000)            (395,050)           (274,000)
                                                          -----------         -----------          -----------         -----------
Net income                                                $    13,418         $   100,125          $   428,245         $   305,828
                                                          ===========         ===========          ===========         ===========
Income per Share                                          $      0.01         $      0.06*         $      0.27         $      0.19
                                                          ===========         ===========          ===========         ===========
Weighted average number of shares
 outstanding during the period                              1,593,947           1,593,947*           1,593,947           1,593,947
                                                          ===========         ===========          ===========         ===========
</TABLE>

* Restated for 1998 5% stock dividend


The accompanying notes are an integral part of the financial statements
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                                                                               3

<PAGE>


POLYMER RESEARCH CORP. OF AMERICA
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
--------------------------------------------------------------------------------


OPERATIONS:                                             1998              1997
                                                     ---------        ---------

Net Income                                           $ 428,245        $ 305,939
Charge not affecting funds -
 Issuance of incentive stock                            42,658           20,000
 Unrealized holding gains                                2,564            6,641
 Depreciation and amortization                          75,000           74,997
                                                     ---------        ---------
Funds Provided by operations                           548,467          407,466
Asset and liability management:                      ---------        ---------
 Accounts receivable                                   (35,844)        (150,446)
 Inventories                                            11,829          (40,656)
 Other current assets                                  (70,035)          93,715
 Other assets                                              699              512
 Accounts payable                                      (57,701)          52,760
 Accrued expenses and other                            (62,491)        (203,961)
 Income taxes payable                                   209,789          107,000
 Deferred revenue                                     (112,450)        (368,300)
 Other current liabilities                           ---------        ---------
Increase  (Decrease) in net
  operating assets                                    (116,204)        (509,376)
                                                     ---------        ---------
Total                                                  432,263         (101,910)
                                                     ---------        ---------
FUNDS USED BY
 FINANCING
Certificates of deposit                               (979,841)         (22,840)
Investment securities                                   85,191           23,333
Issuance of stock                                       42,090
Payments on long term debt                             (23,125)         (20,895)
                                                     ---------        ---------
Total                                                 (875,685)         (20,402)
                                                     ---------        ---------

INVESTMENT IN LAND, PROPERTY,
 AND EQUIPMENT                                         (21,446)          (1,320)
                                                     ---------        ---------

INCREASE (DECREASE) IN CASH                          $ 464,868        $(123,632)
                                                     =========        =========


The accompanying notes are an integral part of these financial statements.
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                                                                               4

<PAGE>


                        POLYMER RESEARCH CORP. OF AMERICA
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - Financial statements

In the opinion of the management of Polymer Research Corp. of America (the
Company), the accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and do not include all of the
information and footnotes required by generally accepted accounting principles.
Management believes that the results herein reflect all adjustments which are in
the opinion of management necessary to fairly state the results and current
financial condition of the Company for the respective periods. These statements
should be read in conjunction with the financial statements and notes thereto
included in the Company's report filed under cover of Form 10-KSB.

The results of operations for the nine month period is not necessarily
indicative of the results for an entire year.

The balance sheet at December 31, 1997 has been taken from the audited financial
statements as of that date.

NOTE 2 - Summary of Significant Accounting Policies

Business Activity

The Company is engaged in the research and development of the applications of
chemical grafting and sells products resulting from such research.

Credit Risk

Financial Instruments that potentially subject the company to credit risk
include investments in United States Treasury bills notes and other certificates
of deposit, government agencies' securities and U.S. Government and New York
State mutual bond funds. Future Changes in economic conditions may make the
investment less valuable.

In addition, financial instruments that potentially subject the Company to
credit risk also include accounts receivable. Accounts receivable resulting from
research or product sales are not collateralized.

The Company maintains deposits with financial institutions in excess of amounts
insured by the FDIC.


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                                                                               5

<PAGE>


Pervasiveness of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates

Revenue Recognition

Revenue from research contracts is recognized upon two criteria: first, client
approval of performance of a specific stage of the contract and, second,
collection of the resulting revenue is assured. Revenue from production is
recognized when products are shipped for sale to customers.

Inventories

Inventories are valued at the lower of cost or market, with cost determined
using the first-in, first-out method and with market defined as the lower of
replacement cost or realizable value.

Investment Securities

The Company determines the appropriate classification of securities at the time
of purchase. If the Company has the intent and the ability at the time of
purchase to hold securities until maturity or on a long-term basis, they are
classified as investments and carried at amortized historical cost. Securities
to be held for indefinite periods of time and not intended to be held to
maturity or on a long-term basis are classified as available for sale and
carried at face value. Securities held for indefinite periods of time include
securities that management intends to use as part of its asset and liability
management strategy and that may be sold in response to changes in interest
rates, resultant prepayment risk and other factors related to interest rate and
resultant prepayment risk changes.

Realized gains and losses on dispositions are based on the net proceeds and the
adjusted book value of the securities sold, using the specific identification
method. Unrealized gains and losses on investment securities available for sale
are based on the difference between book value and fair value of each security.
These gains and losses are credited or charged to shareholders' equity, whereas
realized gains and losses flow through the Company's operations.


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                                                                               6

<PAGE>


Property and Equipment

Property and equipment is stated at cost. The costs of additions and betterments
are capitalized and expenditures for repairs and maintenance are expensed in the
period incurred. When items of property and equipment are sold or retired, the
related costs and accumulated depreciation are removed from the accounts and any
gain or loss is included in income.

The company capitalizes leased equipment where the terms of the lease result in
the transfer to the Company of substantially all of the benefits and risks of
ownership of the equipment.

Depreciation and amortization of property and equipment is provided utilizing
the straight-line method over the estimated useful lives of the respective
assets as follows:

Transportation equipment       3 to 5 years 
Machinery and equipment             5 years 
Furniture and fixtures        5 to 10 years
Building and  improvements         40 years
Office equipment under capital
 leases                             5 years

Deferred Financing Costs

Costs incurred in obtaining the mortgage discussed below have been capitalized
and are being amortized over the term of the related obligation utilizing the
straight-line method.

Income Taxes

The Company accounts for its income taxes utilizing Statement of Financial
Accounting Standards ("SFAS") No. 109 "Accounting for Income Taxes" which
requires that the Company follow the liability method of accounting for income
taxes.

The liability method provides that deferred tax assets and liabilities are
recorded based on the difference between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes, referred to as
"temporary differences." The adoption of the new statement did not have a
material impact on the Company's financial position or results of operations.

Net Earnings Per Share

Earnings per share are computed based upon the weighted average number of common
shares outstanding during each year.


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                                                                               7

<PAGE>

Profit Sharing Plan

Effective January 1, 1990, the Company adopted a qualified non-contributory
profit sharing plan. The plan provides its eligible employees with a source of
retirement income, as well as provide assistance in other circumstances such as
death or disability. Eligible employees must meet two requirements to become
participants; attainment of age 21 and completion of one year of service with
the Company. Employer contributions are determined, if any, at the Board of
director's discretion. A percentage of the benefits vest after three years of
qualifying service.

NOTE 3 -   Provision for Income Taxes     (First nine months)

                     1998                        1997
                  ---------                    --------
Federal           $ 236,000                    $164,000
State and local     159,050                     110,000
                  ---------                    --------
Total             $ 395,050                    $274,000
                  =========                    ========
                                     
NOTE 4 - Mortgage Liability

In September of 1996 the Company prepaid $800,000 due under its mortgage on the
Company's building and modified its payment schedule. As modified, the Company
is obligated to pay a mortgage note payable in equal monthly installments of
$15,457 including interest at 10.5% per annum through June, 2000, secured by the
related building. Such mortgage is being amortized using a 25 year amortization.
The entire unpaid principal balance is due in a balloon payment of $1,398,330 on
June 1, 2000. In connection with the modification, the company paid the
Mortgagee $45,000.

NOTE - 5 - Restricted Stock Issuance

On April 2, 1998 the Company authorized the issuance of 30,800 restrictive
shares of its common stock as incentive to approximately 35 employees. The
Company has valued the shares at $2.77 per share and will recognize compensation
expense for $85,316 ratably throughout the year.

NOTE - 6 - Stock Dividend

On March 2, 1998 the Company declared a 5% stock dividend to shareholders, paid
April 2, 1998. The transaction was valued based upon the closing market price of
the Company's stock on March 2, 1998, which was $2.50 per share. Retained
earnings has been charged for $ 186,090 as a result of the issuance of 74,436
shares which was credited to common stock and Capital in excess of par value.


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                                                                               8

<PAGE>


                        POLYMER RESEARCH CORP. OF AMERICA

ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

CAPITAL RESOURCES AND LIQUIDITY

Cash, Investments, and Investment securities have increased collectively by
$429,782 since December 31, 1997. The increase is principally due to net income
for the first nine months of 1998.

Cash is generated by and used by the Company through its operations. Neither the
issuance of stock nor the acquisition of debt was in 1997, nor expected to be in
1998, significant sources of cash for use in operations.

The rate of current assets to current liabilities at September 30, 1998
increased to 3.75 to 1.0 as compared to 2.95 to 1.0 at December 31, 1997. The
increase is a result of net earnings in 1998 and the decrease in deferred
revenue.

Based on the above, the Company's cash, investment, and investment securities
position at September 30, 1998 is deemed sufficient to cover any unforeseen
sales downturn in the short term as it is equal to approximately thirteen months
selling, general, and administrative expenses. Over both the long and short
term, liquidity will be a direct result of sales and related net earnings.

B.   RESULTS OF OPERATIONS

Three months ended September 30, 1998 v. 1997

Net revenues for the third quarter of 1998 were $ 1,130,831, a decrease of
$141,652 (11%) compared to the third quarter of 1997. Research sales decreased
$48,174 (.5%) in the second quarter of 1998 over 1997. Product sales decreased
$93,478 (28%) in the third quarter of 1998 as compared to 1997.

The cost of revenues in research remained consistent as a percentage of sales in
the third quarter of 1998 as compared to the same quarter of 1997.

Costs of product sales decreased as a percentage of sales from 60% in the third
quarter of 1997 to 54% in the same quarter of 1998 principally as a result of
decreased staff.

Selling, general, and administrative expenses increased as a percentage of sales
to 63% for the third quarter of 1998


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                                                                               9

<PAGE>


from 52% for the comparable quarter of 1997 as a result of increased salaries,
legal, insurance, and travel expenses. Net income decreased from $ 100,125 (8%
of sales) in 1997 to $ 13,418 (1% of sales) in 1998, principally as the result
of decreased revenues coupled with increased Selling, General, and
Administrative expenses.

Nine months ended September 30, 1998 v. 1997

Net revenues for the first nine months of 1998 were $4,681,092 an increase of
$577,629 (14%) over the first nine months of 1997. Research sales increased
$674,767 (21%) in the first nine months of 1998 over 1997. Product sales
decreased $ 97,138 (11%) in the first nine months of 1998 as compared to 1997.

The cost of revenues in research decreased as a percentage of sales from 22% in
the first nine months of 1997 to 19% in the same period of 1998 due to increased
volume without increases in staff size.

Costs of product sales increased as a percentage of sales from 78% in the first
nine months of 1997 to 86% in the same period of 1998 principally as a result of
decreased sales with similar staff sizes.

Selling, general, and administrative expenses remained consistent as a
percentage of sales for the first nine months of 1998 as compared to the first
nine months of 1997.

Net income increased from $ 305,828 (7% of sales) in 1997 to $428,245 (9% of
sales) in 1998, principally as the result of increased revenues and improved
gross margins.


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                                                                              10

<PAGE>


PART II - OTHER INFORMATION

ITEM 1 - Legal Proceedings:

The Company is party to various lawsuits arising in the ordinary course of
business. The Company's financial statements include reserves of $100,000 for
legal expenses and any unfavorable outcomes in amounts management believes to be
reasonable. In the opinion of management, such lawsuits should not have a
material adverse effect on the Company's financial condition.

ITEM 2 - Changes in Securities: None

ITEM 3 - Defaults Upon Senior Securities: None

ITEM 4 - Submission of Matters to a Vote of Security Holders: None

ITEM 5 - Other Information: None

ITEM 6 - Exhibits and Reports on Form 8-k:

          Exhibit 10-Amendment No. 3 to Employment Agreement between Registrant
          and Carl Horowitz


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                                                                              11

<PAGE>


                                    FORM 10-Q

                                   SIGNATURES


Pursuant to the requirements 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.


                                          POLYMER RESEARCH CORP. OF AMERICA,
                                                    (REGISTRANT)


Date 11/9/98                              /s/ Carl Horowitz  
                                          --------------------------------------
                                              Carl Horowitz, President and Chief
                                                Accounting Officer


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