---

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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Form 10-QSB



QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the Quarter Ended: June 30, 2003

Commission File No.  0-14119-NY

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POLYMER RESEARCH CORP. OF AMERICA

(Exact name of registrant as specified in its
charter)



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



**2186 Mill Avenue, Brooklyn, New York 11234**

(Address
of principal executive
offices)                    
(Zip
Code)



(718) 444-4300

(Registrant's telephone number, including area
code)



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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 whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the exchange Act).



Yes ̈No x



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



|Class            |  | Outstanding atJuly 31, 2003
|---------------- |  | ---------------------------
|**Common Stock** |  | 2,128,644                  



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POLYMER RESEARCH CORP. OF AMERICA

FORM 10QSB



June 30, 2003



|           |  |                                                                                                      
|---------- |  | -----------------------------------------------------------------------------------------------------
|           |  |                                                                                                      
|           |  |                                                                                                      
|PART I.    |  | FINANCIAL                                                                                            
|           |  |                                                                                                      
|           |  | Item 1. Financial Statements                                                                         
|           |  |                                                                                                      
|           |  | Balance Sheets at June 30, 2003 (unaudited) and December
      31, 2002                              
|           |  |                                                                                                      
|           |  | Statements of Operations for the Three Month Periods Ended
         June 30, 2003 and 2002(unaudited)
|           |  |                                                                                                      
|           |  | Statements of Operations for the Six Month Periods Ended
      June 30, 2003 and 2002(unaudited)     
|           |  |                                                                                                      
|           |  | Statements of Cash Flows for the Six Month Periods Ended
      June 30, 2003 and 2002(unaudited)     
|           |  |                                                                                                      
|           |  | Notes to Financial Statements                                                                        
|           |  |                                                                                                      
|           |  | Item 2. Management's Discussion and Analysis of Financial
      Condition and Results of Operations  
|           |  |                                                                                                      
|           |  | Item 3.Controls and Procedures                                                                       
|           |  |                                                                                                      
|PART II.   |  | OTHER INFORMATION                                                                                    
|           |  |                                                                                                      
|           |  | Item 1. Legal Proceedings                                                                            
|           |  | Item 2. Changes in Securities                                                                        
|           |  | Item 3. Defaults Upon Senior Securities                                                              
|           |  | Item 4. Submission of Matters to Vote to Security Holders                                            
|           |  | Item 5. Other Information                                                                            
|           |  | Item 6. Exhibits and Reports on Form 8-K                                                             
|           | 
|Signatures |  | 15                                                                                                   











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##### Table of Contents

|PART I - Financial Information
|------------------------------
|Item 1- Financial Statements  

|POLYMER RESEARCH CORP. OF
      AMERICA
|---------------------------------------
|BALANCE SHEETS                         

- ASSETS -

|                                                                                                                                                          |                                               | June 30,    |            | December 31, |          
|--------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------- | ----------- | ---------- | ------------ | ---------
|                                                                                                                                                          |                                               | 2003        |            | 2002         |          
|                                                                                                                                                          |                                               | (Unaudited) |            |              |          
|CURRENT ASSETS:                                                                                                                                           |                                               |             |            |              |          
|Cash and cash equivalents                                                                                                                                 |                                               | $           | 76,193     |              | $        
|Accounts receivable,
      less allowances of $0                                                                                                          |                                               |             | 483,776    |              |          
|Inventories                                                                                                                                               |                                               |             | 117,353    |              |          
|Prepaid and refundable
      income taxes                                                                                                                 |                                               |             | 301,487    |              |          
|Mortgage escrow                                                                                                                                           |                                               |             | 89,718     |              |          
|Prepaid expenses and
      other current assets                                                                                                           |                                               |             | 67,167     |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|TOTAL CURRENT ASSETS                                                                                                                                      |                                               |             | 1,135,694  |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|Land, Property, and
      Equipment-net                                                                                                                   |                                               |             |            |              |          
|of accumulated
      depreciation of $1, 302,115 and $1,280,655 respectively                                                                              |                                               | 2,462,761   |            |              | 2,509,181
|                                                                                                                                                          |                                               |             |            |              |          
|OTHER ASSETS:                                                                                                                                             |                                               |             |            |              |          
|Capitalized mortgage
      costs, net of amortization                                                                                                     |                                               |             | 102,692    |              |          
|Security deposits                                                                                                                                         |                                               |             | 875        |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|TOTAL OTHER ASSETS                                                                                                                                        |                                               |             | 103,567    |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|TOTAL                                                                                                                                                     |                                               | $           | 3,702,022  |              | $        
|                                                                                                                                                          |                                               |             |            |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|                                                                                                                                                          | -LIABILITIES
      AND STOCKHOLDERS EQUITY - |             |            |              |          
|CURRENT LIABILITIES:                                                                                                                                      |                                               |             |            |              |          
|Notes payable, current maturities                                                                                                                         |                                               | $           | 128,523    |              | $        
|Accounts payable and accrued
      expenses                                                                                                               |                                               |             | 399,930    |              |          
|Deferred revenue                                                                                                                                          |                                               |             | 70,000     |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|TOTAL CURRENT LIABILITIES                                                                                                                                 |                                               |             | 598,453    |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|LONG-TERM LIABILITIES:                                                                                                                                    |                                               |             |            |              |          
|Due to shareholder                                                                                                                                        |                                               |             | 237,162    |              |          
|Notes Payable, long term                                                                                                                                  |                                               |             | 1,940,925  |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|TOTAL LIABILITIES                                                                                                                                         |                                               |             | 2,776,540  |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|STOCKHOLDERS EQUITY:                                                                                                                                     |                                               |             |            |              |          
|Common stock -
      par value $.01 per share, authorized 4,000,000 shares, issued 2,150,784
      shares
              and 2,075,784 shares respectively |                                               | 21,507      |            |              | 20,757   
|Capital in excess of par value                                                                                                                            |                                               |             | 3,810,073  |              |          
|Accumulated deficit                                                                                                                                       |                                               |             | (2,888,337 | )            |          
|Less:Treasury stock, at cost,
      22,140 shares                                                                                                         |                                               |             | (17,761    | )            |          
|                                                                                                                                                          |                                               |             |            |              |          
|TOTAL STOCKHOLDERS EQUITY                                                                                                                                |                                               |             | 925,482    |              |          
|                                                                                                                                                          |                                               |             |            |              |          
|TOTAL                                                                                                                                                     |                                               | $           | 3,702,022  |              | $        
|                                                                                                                                                          |                                               |             |            |              |          





See accompanying notes to financial statements.



-1-



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POLYMER
  RESEARCH CORP. OF AMERICASTATEMENTS OF OPERATIONS

FOR
  THE THREE MONTH PERIODS ENDED

JUNE
  30, 2003 AND 2002

(Unaudited)



|                                                                | 2003 |           | 2002 |   |           |   | 
|--------------------------------------------------------------- | ---- | --------- | ---- | - | --------- | - | 
|Net Revenue                                                     |      |           |      |   |           |   | 
|Research                                                        | $    | 756,898   |      | $ | 500,750   |   | 
|Production                                                      |      | 66,959    |      |   | 114,026   |   | 
|                                                                |      |           |      |   |           |   | 
|Total                                                           |      | 823,857   |      |   | 614,776   |   | 
|                                                                |      |           |      |   |           |   | 
|Cost of Revenues                                                |      |           |      |   |           |   | 
|Research                                                        |      | 245,053   |      |   | 250,724   |   | 
|Production                                                      |      | 88,999    |      |   | 129,336   |   | 
|                                                                |      |           |      |   |           |   | 
|Total                                                           |      | 334,052   |      |   | 380,060   |   | 
|                                                                |      |           |      |   |           |   | 
|Gross Profit                                                    |      | 489,805   |      |   | 234,716   |   | 
|                                                                |      |           |      |   |           |   | 
|Selling, General and Administrative Expenses                    |      | 506,044   |      |   | 589,710   |   | 
|Settlement Expenses                                             |      | 55,815    |      |   | 228,500   |   | 
|                                                                |      |           |      |   |           |   | 
|Income (Loss) from operations                                   |      | (72,054   | )    |   | (583,494  | ) | 
|Other Revenue (Expenses):                                       |      |           |      |   |           |   | 
|Interest income                                                 |      | 2         |      |   | 1,703     |   | 
|Interest expense                                                |      | (61,054   | )    |   | (10,404   | ) | 
|                                                                |      |           |      |   |           |   | 
|Total other Revenues (Expenses)                                 |      | (61,052   | )    |   | (8,701    | ) | 
|                                                                |      |           |      |   |           |   | 
|Income (loss) before provision (benefit) for
      income taxes |      | (133,106  | )    |   | (592,195  | ) | 
|Provision (benefit) for income taxes                            |      | 0        |     |   | 8,300     |   | 
|                                                                |      |           |      |   |           |   | 
|                                                                |      |           |      |   |           |   | 
|Net Income (Loss)                                               | $    | (133,106  | )    | $ | (583,895  | ) | 
|                                                                |      |           |      |   |           |   | 
|Basic and diluted per share data:                               |      |           |      |   |           |   | 
|Earnings (loss) per share                                       | $    | (.06      | )    | $ | (.30      | ) | 
|                                                                |      |           |      |   |           |   | 
|Weighted average number of shares outstanding                   |      | 2,150,784 |      |   | 1,925,784 |   | 
|                                                                |      |           |      |   |           |   | 





See accompanying notes to financial statements.



-2-



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POLYMER
  RESEARCH CORP. OF AMERICASTATEMENTS OF OPERATIONS

FOR
  THE SIX MONTH PERIODS ENDED

JUNE
  30, 2003 AND 2002

(Unaudited)



|                                                                | 2003 |           | 2002 |   |           |   | 
|--------------------------------------------------------------- | ---- | --------- | ---- | - | --------- | - | 
|Net Revenue                                                     |      |           |      |   |           |   | 
|Research                                                        | $    | 1,329,500 |      | $ | 1,423,690 |   | 
|Production                                                      |      | 184,769   |      |   | 208,572   |   | 
|                                                                |      |           |      |   |           |   | 
|Total                                                           |      | 1,514,269 |      |   | 1,632,262 |   | 
|                                                                |      |           |      |   |           |   | 
|Cost of Revenues                                                |      |           |      |   |           |   | 
|Research                                                        |      | 475,211   |      |   | 420,820   |   | 
|Production                                                      |      | 194,595   |      |   | 201,533   |   | 
|                                                                |      |           |      |   |           |   | 
|Total                                                           |      | 669,806   |      |   | 622,353   |   | 
|                                                                |      |           |      |   |           |   | 
|Gross Profit                                                    |      | 844,463   |      |   | 1,009,909 |   | 
|                                                                |      |           |      |   |           |   | 
|Selling, General and Administrative Expenses                    |      | 1,011,401 |      |   | 1,348,964 |   | 
|Settlement Expenses                                             |      | 82,754    |      |   | 228,500   |   | 
|                                                                |      |           |      |   |           |   | 
|Income (Loss) from operations                                   |      | (249,692  | )    |   | (567,555  | ) | 
|                                                                |      |           |      |   |           |   | 
|Other Revenue (Expenses):                                       |      |           |      |   |           |   | 
|Interest income                                                 |      | 122       |      |   | 3,851     |   | 
|Interest expense                                                |      | (95,448   | )    |   | (17,497   | ) | 
|                                                                |      |           |      |   |           |   | 
|Total other Revenues (Expenses)                                 |      | (95,326   | )    |   | (13,646   | ) | 
|                                                                |      |           |      |   |           |   | 
|Income (loss) before provision (benefit) for
      income taxes |      | (345,018  | )    |   | (581,201  | ) | 
|Provision (benefit)
      for income taxes                      |      | 0        |     |   | 0        |  | 
|Net Income (Loss)                                               | $    | (345,018  | )    | $ | (581,201  | ) | 
|Basic and diluted per share data:                               |      |           |      |   |           |   | 
|Earnings (loss) per share                                       | $    | (.16      | )    | $ | (.30      | ) | 
|                                                                |      |           |      |   |           |   | 
|Weighted average number of shares outstanding                   |      | 2,113,491 |      |   | 1,925,784 |   | 
|                                                                |      |           |      |   |           |   | 



See accompanying notes to financial statements.



-3-



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POLYMER
  RESEARCH CORP. OF AMERICASTATEMENTS OF CASH FLOWS

FOR
  THE SIX MONTH PERIODS ENDED

JUNE
  30, 2003 AND 2002

(Unaudited)



|                                                                                        | 2003 |          | 2002 |   |          |   |  | 
|--------------------------------------------------------------------------------------- | ---- | -------- | ---- | - | -------- | - |  | 
|Cash Flows from Operating Activities:                                                   |      |          |      |   |          |   |  | 
|Net income (loss)                                                                       | $    | (345,018 | )    | $ | (581,201 | ) |  | 
|Adjustments to reconcile net income to net cash
      provided by operating activities: |      |          |      |   |          |   |  | 
|Depreciation and amortization                                                           |      | 52,420   |      |   | 41,556   |   |  | 
|Changes in operating assets and liabilities:                                            |      |          |      |   |          |   |  | 
|Accounts receivable                                                                     |      | (204,152 | )    |   | (122,550 | ) |  | 
|Inventories                                                                             |      | 8,964    |      |   | 16,280   |   |  | 
|Prepaid expenses and other
      current assets                                         |      | (11,581  | )    |   | (31,185  | ) |  | 
|Prepaid and refundable income
      taxes                                               |      | (50      | )    |   | 47,412   |   |  | 
|Accounts payable, Accrued
      expenses and other                                      |      | (41,490  | )    |   | 116,411  |   |  | 
|Deferred revenue                                                                        |      | (85,500  | )    |   | (114,269 | ) |  | 
|                                                                                        |      |          |      |   |          |   |  | 
|Net cash provided by operating activities                                               |      | (626,407 | )    |   | (627,546 | ) |  | 
|                                                                                        |      |          |      |   |          |   |  | 
|                                                                                        |      |          |      |   |          |   |  | 



|Cash flows from financing activities:                      |   |          |   |   |           |   |  |  |  | 
|---------------------------------------------------------- | - | -------- | - | - | --------- | - |  |  |  | 
|Capitalized financing costs                                |   | —        |   |   | (112,806  | ) |  |  |  | 
|Mortgage escrow                                            |   | 30,856   |   |   | (93, 000  | ) |  |  |  | 
|Proceeds of mortgage payable                               |   | —        |   |   | 1,400,000 |   |  |  |  | 
|Proceeds of notes payable                                  |   | 491,500  |   |   | —         |   |  |  |  | 
|Due to Shareholder                                         |   | 35,354   |   |   | —         |   |  |  |  | 
|Payments of long term debt                                 |   | (59,618  | ) |   | (491,668  | ) |  |  |  | 
|                                                           |   |          |   |   |           |   |  |  |  | 
|Net cash used for financing activities                     |   | 498,092  |   |   | 702,526   |   |  |  |  | 
|                                                           |   |          |   |   |           |   |  |  |  | 
|Net increase (decrease) in cash
      and cash equivalents |   | (128,315 | ) |   | 74,980    |   |  |  |  | 
|                                                           |   |          |   |   |           |   |  |  |  | 
|Cash and cash equivalents, beginning of period             |   | 204,508  |   |   | 861,952   |   |  |  |  | 
|                                                           |   |          |   |   |           |   |  |  |  | 
|Cash and cash equivalents, end of period                   | $ | 76,193   |   | $ | 936,932   |   |  |  |  | 
|                                                           |   |          |   |   |           |   |  |  |  | 
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          |   |          |   |   |           |   |  |  |  | 
|Cash paid
      during the period for:                     |   |          |   |   |           |   |  |  |  | 
|Interest                                                   | $ | 95,448   |   | $ | 17,497    |   |  |  |  | 
|                                                           |   |          |   |   |           |   |  |  |  | 





See accompanying notes to financial statements.



-4-



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##### Table of Contents

POLYMER RESEARCH CORP. OF AMERICA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 AND 2002(Unaudited)

NOTE 1 - BASIS OF PRESENTATION:

The Interim financial statements included herein
  have been prepared without audit, pursuant to the rules and regulations of the
  Securities and Exchange Commission (SEC). Certain information and
  footnote disclosures, normally included in the financial statements prepared
  in accordance with generally accepted accounting principles, have been condensed
  or omitted pursuant to SEC rules and regulations; nevertheless, management of
  the Company believes that the disclosures herein are adequate to make the information
  presented not misleading. The financial statements and notes should be read
  in conjunction with the audited financial statements and notes thereto as of
  December 31, 2002 included in the Companys Form 10-KSB filed with SEC.

In the opinion of management, all adjustments consisting
  only of normal recurring adjustments necessary to present fairly the financial
  position of the Company with respect to the interim financial statements have
  been made. The results of operations for the interim periods are not necessarily
  indicative of the results to be expected for the full year.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Business Activity

Polymer Research Corp. of America ("the Company")
  is predominately engaged in the research and development of the applications
  of chemical grafting for both domestic and international companies. The Company
  also produces and sells chemical formulations arising from research activities
  and textile printing inks. Revenue from research and production is derived from
  various customers throughout the United States and worldwide. .

Concentration of Credit Risk

The Company maintains its cash in several bank accounts
  at high credit quality financial institutions. The balances, at times, may exceed
  federally insured limits. At June 30, 2003, the Company did not exceed FDIC
  insured limits.

The Financial instrument, which potentially subjects
  the Company to significant concentrations of credit risk, is principally trade
  accounts receivable.

Use 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

Revenues are earned and recognized based upon the
  shipment of product or based upon the attainment of specific milestones or benchmarks
  specified in research agreements. Amounts received in advance for development
  agreements are recorded as deferred revenue and are recognized upon achievement
  of milestones.

The Company follows the guidance in the Securities
  and Exchange Commissions Staff Accounting Bulletin No. 101, Revenue
  Recognition (SAB 101). SAB 101 states that revenue should
  be recognized when all four of the following conditions exist: persuasive evidence
  of an arrangement exists; services have been rendered or delivery has occurred;
  the price is fixed or determinable; and collectibility is reasonably assured.

Revenue in the Statement of Operations is reflected
  net of discounts and allowances, which are not considered significant to the
  Companies operations. Although most research and development contracts provide
  for payments as milestones are achieved, the Company does negotiate discounts
  from time to time typically ranging from 15% to 20% for payment in full at the
  commencement of the contract.







-5-



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POLYMER
  RESEARCH CORP. OF AMERICA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 AND 2002(Unaudited)



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: **(continued):**

No discounts or allowances are offered for products
  produced by the Company. Further, the Company does not usually experience any
  returns and, therefore, records returns as they occur.

Deferred Revenue

The Company records as deferred revenue payments
  received for research contracts prior to the culmination of the revenue process.

Inventories

Inventories, which consists of raw materials and
  finished goods 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 net realizable value.

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:

|Land improvements                     | 20 years     
|------------------------------------- | -------------
|Transportation equipment              | 3 to 5 years 
|Machinery & Equipment                 | 5 years      
|Furniture & Fixtures                  | 5 to 10 years
|Building and improvements             | 40 years     
|Office equipment under Capital leases | 5 years      
|                                      |              
|Capitalized Mortgage Costs            |              

Costs incurred in obtaining the mortgage used to
  finance the purchase the building were capitalized and 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.



-6-



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POLYMER
  RESEARCH CORP. OF AMERICA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 AND 2002(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: **(continued):**

Profit Sharing Plan

The Company maintains a qualified noncontributory
  profit sharing plan. The plan provides all eligible employees with a source
  of retirement income, as well as 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 by an annual resolution of the Board of
  Directors. A percentage of the benefits vest after three years of qualifying
  service.

Net Earnings per share

The financial statements are presented in accordance
  with Statement of Financial Accounting Standards No. 128 Earnings Per
  Share. Basic earnings per share are computed based upon the weighted average
  number of common shares outstanding during each year. Diluted earnings per share
  incorporate the incremental shares issuable upon the assumed exercise of stock
  options and warrants. In accordance with SFAS 128, diluted earnings per share
  is not presented in years during which the are no outstanding options or warrants
  or during periods during which there is a pretax operating loss.

Reclassifications

Certain accounts relating to the prior years have
  been reclassified to conform to the current year's presentation. These reclassifications
  have no effect on previously reported income.

Segment Information

The Company operates in two segments. The Company
  is primarily in the business of performing research and development on a contract
  basis. Additionally, the Company also manufactures and sells chemical formulations
  arising from its research activities as well as inks used by textile businesses
  for the printing of textiles.

Research and Development

Many of the Companys activities are directed
  towards the performance of research on behalf of its clients. All costs relating
  to the performance of client projects are expensed as incurred. There are no
  expenditures for research and development on the Companys own behalf.

Contingencies

Statement of Financial Account Standards (SFAS)
  No. 5 Accounting for Contingencies defines a contingency as 
  an existing condition, situation or set of circumstances involving uncertainty
  as to possible gain or loss to an enterprise that will ultimately be resolved
  when one or more future events occur or fail to occur. At December 31,
  2002, the Company is a defendant in various lawsuits, which arouse in the ordinary
  course of business (see Note 4 Contingencies). The Company recorded a
  provision which is deemed adequate for legal expenses and potential unfavorable
  rulings in certain of these cases.

-7-



---



POLYMER RESEARCH CORP. OF AMERICA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 AND 2002(Unaudited)

NOTE 3  Provision for Income Taxes

The provision for income taxes for the first six
  months ended June 30, 2003 and 2002 is as follows:

|                       | **2003** |  | **2002** | 
|---------------------- | -------- |  | -------- | 
|                       |          |  |          | 
|Federal                | $-0-     |  | $-0-     | 
|State and local        | - 0-     |  | -0-      | 
|                       |          |  |          | 
|Total                  | $-0-     |  | $-0-     | 
|                       |          |  |          | 
|                       |          |  |          | 
|                       |          |  |          | 
|NOTE 4  Contingencies |          |  |          | 

At June 30, 2003 the Company was a defendant in
  various lawsuits which arose in the ordinary course of business. The Company
  has included a reserve in current liabilities in an amount that management believes
  is reasonable for legal expenses and potential unfavorable rulings or settlements
  of these cases. It is managements opinion that the ultimate liability,
  if any, which might result from the remainder of such actions would not have
  a material effect on the Companys financial condition. As of June 30,
  2003 and 2002, the Company had settled certain of these cases and recorded in
  the statement of operations settlement expenses of $82,754 and $228,500, respectively.

NOTE 5  Long Term Debt

Long term debt consists of: 1) A mortgage payable
  through July 2017 in equal monthly installments of $15,044 with interest at
  10% per annum through July 2004, thereafter interest at varying rates adjusted
  every six months with no increase or decrease by more than 2% on any single
  change date. 2) A settled legal action for thirty-six equal monthly payments
  of $8,333, which began in February 2003. The present value of this obligation
  was recorded on the balance sheet based upon an imputed interest rate of 10%.
  At December 31, 2002, the balance due under the terms of the settlement was
  $258,260 and at June 30, 2003 the balance due under the terms of the settlement
  was $220,392. 3) A $491,500 note payable through February 2033. Interest will
  accrue at the rate of 4% per annum through February 2005. Installment payments
  in equal monthly installments of $2,434 including interest commence in March
  2005 and continue through February 2033 at which time all remaining principal
  and unpaid interest is due.

NOTE 6  Foreign Sales

As of June 30, 2003 and 2002, Research and Production
  revenue attributable to foreign customers was approximately $263,335 and $113,722
  representing 16% and 7% of total revenue, respectively, while revenue derived
  from customers in the United States amounted to approximately $1,388,434 and
  $1,518,540 representing84% and 93% of total revenue, respectively. No individual
  customers or foreign countries represented 10% or more of total revenues.

NOTE 7 Shareholders' Equity

Duringthe six months ended
  June 30, 2003, the Company issued 75,000 shares of its common stock valued at
  $82,345 as payment to clients in settlement of various disputes over research
  contracts.  The Company had previously recorded reserves for these disputes
  and, therefore, reduced these reserves upon the settlement of these matters.



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POLYMER RESEARCH CORPORATION OF
  AMERICAOTHER INFORMATIONJUNE 30, 2003 AND 2002(Unaudited)

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS
  OR PLAN OF OPERATION

The following discussion and analysis of financial
  condition and results of operations should be read in conjunction with the Companys
  financial statements and the accompanying notes thereto included herein, and
  the financial statements included in its 2002 annual report on Form 10-KSB.
  This Quarterly Report on Form 10-QSB includes forward-looking statements within
  the meaning of Section 27A of the Securities Act of 1933, as amended and Section
  21E of the Securities Exchange Act of 1934, as amended.

Forward-looking statements involve known and unknown
  risks, uncertainties and other factors which could cause the actual results,
  performance (financial or operating) or achievements expressed or implied by
  such forward-looking statements not to occur or be realized. Such forward-looking
  statements generally are based upon the Companys best estimates of future
  results, performance or achievement, based upon current conditions, and based
  upon the most recent results of operations. There can be no assurance that actual
  results will not differ materially from those expressed or implied in the forward-looking
  statements.

Forward-looking statements may be identified by
  the use of forward-looking terminology such as may, will,
  expect, believe, estimate, anticipate, continue
  or similar terms, variation of those terms or the negative of those terms. Potential
  risks and uncertainties include, among other things, such factors as the ability
  to attract and retain qualified personnel, the effect on our financial condition
  of delays in payments received from third parties, economic conditions, and
  other factors which may be set forth in our other filings with the Securities
  and Exchange Commission.

The Company undertakes no obligation to publicly
  update or revise any forward-looking statements, whether as a result of new
  information, future events or otherwise.

CAPITAL RESOURCES AND LIQUIDITY

Cash and cash equivalents have decreased collectively
  by $128,315 since December 31, 2002. The decrease resulted principally from
  operating losses and repayment of long-term debt. In addition the Company received
  loan proceeds of $491,500 in 2003.

The ratio of current assets to current liabilities
  increased to 1.90 to 1.0 at June 30, 2003 as compared to 1.32 to 1.0 at December
  31, 2002 principally as a result of the proceeds of a long term loan payable
  (see below) which provided cash net of operating losses which used cash. In
  April of 2003 the company received a loan from a bank totaling $491,500 bearing
  interest at 4% per year. After a period of 25 months with no payment, monthly
  payments of principal and interest of $2,434 will commence in the 26th month
  and then be paid monthly for 30 years.

Based on the above, the Companys cash position
  at June 30, 2003 may not be sufficient to meet its financial needs including
  repayment of the bank and to cover any continued sales downturns in the short
  term. Cash at June 30, 2003 is equal to approximately two weeks overhead expenses.
  Over both the long and short term, liquidity will be a direct result of sales
  and related net earnings as well as bank financing. No significant capital expenditures
  are anticipated.

RESULTS OF OPERATIONS

Three months ended June 30, 2003 v. 2002.

Net revenues for the second quarter of 2003 were
  $823,857 an increase of $209,081 (34%) compared with the second quarter of 2002.
  Research sales increased $256,148 (51%) in the second quarter of 2003 compared
  to 2002 due to a stronger economy resulting in increased demand. Product sales
  deceased $47,067 (41%) compared to the second quarter of 2002 due to decreased
  demand from research customers.



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##### Table of Contents

POLYMER
  RESEARCH CORPORATION OF AMERICA OTHER INFORMATIONJUNE 30, 2003 AND 2002(Unaudited)

The cost of revenues in research deceased to 32%
  from 50% in the second quarter of 2003 compared to 2002 as a result of increased
  sales with similar payroll levels. The cost of revenues in production increased
  to 132% from 113% in the second quarter of 2003 compared to 2002 as a result
  of decreased sales with similar payroll expenses.

Selling, general, and administrative expenses decreased
  as a percentage of sales in the second quarter of 2003 as compared to the same
  quarter of 2002 from 96% to 61% as a result of significantly increased sales
  with slightly decreased overhead expenses and decreased legal expenses. 
  Loss from operations during the second quarter decreased from ($583,494) (95%
  of sales) in 2002 to a loss of ($72,054) (9% of sales) in 2003 principally as
  a result of increased sales.

Six months ended June 30, 2003 v. 2002.

Net revenues for the first six months of 2003 were
  $1,514,269 a decrease of $117,993 (7%) compared with the same period in 2002.
  Research sales increased $94,190 (7%) in the first six months of 2003 compared
  to 2002 due to a stronger economy resulting in increased demand. Product sales
  deceased $23,803 (11%) compared to 2002 due to decreased demand from research
  customers.

The cost of revenues in research increased slightly
  to 36% from 29% in the first six months of 2003 compared to 2002. The cost of
  revenues in production increased to 105% from 96% in the first quarter of 2003
  compared to 2002 as a result of decreased sales with similar payroll expenses
  and raw material costs.

Selling, general, and administrative expenses decreased
  as a percentage of sales in the first six months of 2003 as compared to the
  same period of 2002 (from 83% to 67%) as a result of slightly increased sales
  with decreased legal expense and decreased payroll expenses. Loss from operations
  during the first six months of 2003 decreased from ($567,555) (35% of sales)
  in 2002 to a loss of ($249,692) (16% of sales) in 2003 as a result of increased
  sales and decreased legal settlement expenses.

The settlement reached in 2002 was structured in
  a manner so as not to adversely affect the Company's cash flow in any material
  fashion.

**CRITICAL ACCOUNTING POLICIES**

Our significant accounting policies are described
  in Note 2 to the financial statements in Item 1 of the Quarterly Report. Our
  financial statements are prepared in accordance with principles generally accepted
  in the United States of America. The following policies, we believe, are our
  most critical accounting policies and are explained below.

Concentration of Credit Risk

The Company maintains its cash in several bank accounts
  at high credit quality financial institutions. The balances, at times, may exceed
  federally insured limits. At June 30, 2003, the Company exceeded FDIC insured
  limits by

The Financial instrument, which potentially subjects
  the Company to significant concentrations of credit risk, is principally trade
  accounts receivable.

Use 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.



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##### Table of Contents

POLYMER
  RESEARCH CORPORATION OF AMERICA OTHER INFORMATIONJUNE 30, 2003 AND 2002(Unaudited)

Revenue Recognition

Revenues are earned and recognized based upon the
  shipment of product or based upon the attainment of specific milestones or benchmarks
  specified in license or development agreements. Amounts received in advance
  for development agreements are recorded as deferred revenue and are recognized
  upon achievement of milestones.

The Company follows the guidance in the Securities
  and Exchange Commissions Staff Accounting Bulletin No. 101, Revenue
  Recognition (SAB 101). SAB 101 states that revenue should
  be recognized when all four of the following conditions exist: persuasive evidence
  of an arrangement exists; services have been rendered or delivery has occurred;
  the price is fixed or determinable; and collectibility is reasonably assured.

Revenue in the Statement of Operations is reflected
  net of discounts and allowances, which are not considered significant to the
  Companies operations. Although most research and development contracts provide
  for payments as milestones are achieved, the Company does negotiate discounts
  from time to time typically ranging from 15% to 20% for payment in full at the
  commencement of the contract.

No discounts or allowances are offered for products
  produced by the Company. Further, the Company does not usually experience any
  returns and, therefore, records returns as they occur.

Deferred Revenue

The Company records as deferred revenue payments
  received for research contracts prior to the culmination of the revenue process.

Inventories

Inventories, which consists of raw materials and
  finished goods 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 net realizable value.

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.

Capitalized Mortgage Costs

Costs incurred in obtaining the mortgage used to
  finance the purchase the building were capitalized and 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.

Profit Sharing Plan

The Company maintains a qualified noncontributory
  profit sharing plan. The plan provides all eligible employees with a source
  of retirement income, as well as 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

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##### Table of Contents

POLYMER
  RESEARCH CORPORATION OF AMERICA OTHER INFORMATIONJUNE 30, 2003 AND 2002(Unaudited)

service with the Company. Employer contributions
  are determined by an annual resolution of the Board of Directors. A percentage
  of the benefits vest after three years of qualifying service.

Net Earnings per share

The financial statements are presented in accordance
  with Statement of Financial Accounting Standards No. 128 Earnings Per
  Share. Basic earnings per share are computed based upon the weighted average
  number of common shares outstanding during each year. Diluted earnings per share
  incorporate the incremental shares issuable upon the assumed exercise of stock
  options and warrants. In accordance with SFAS 128, diluted earnings per share
  is not presented in years during which the are no outstanding options or warrants
  or during periods during which there is a pretax operating loss.

Reclassifications

Certain accounts relating to the prior years have
  been reclassified to conform to the current year's presentation. These reclassifications
  have no effect on previously reported income.

Segment Information

The Company operates in two segments. The Company
  is primarily in the business of performing research and development on a contract
  basis. Additionally, the Company also manufactures and sells chemical products
  arising from its research activities as well as inks used by textile businesses
  for the printing of textiles.

Research and Development

Many of the Companys activities are directed
  towards the performance of research on behalf of its clients. The Company is
  continually improving its scientific methods and techniques. All costs relating
  to the performance of client projects are expensed as incurred. There are no
  expenditures for research and development on the Companys own behalf.

Contingencies

Statement of Financial Account Standards (SFAS)
  No. 5 Accounting for Contingencies defines a contingency as 
  an existing condition, situation or set of circumstances involving uncertainty
  as to possible gain of loss to an enterprise that will ultimately be resolved
  when one or more future events occur of fail to occur. At December 31,
  2002, the Company is a defendant in various lawsuits, which arouse in the ordinary
  course of business (see Note 4 Contingencies in Notes to Financial Statements).
  The Company recorded a provision which is deemed adequate for legal expenses
  and potential unfavorable rulings in certain of these cases.

ITEM 3. CONTROLS AND PROCEDURES

At the end of the period covered by this report,
  the Company carried out an evaluation, under the supervision and with the participation
  of the Company's management, including the Companys Chief Executive Officer
  and Chief Financial Officer, of the Company's disclosure controls and procedures
  pursuant to Exchange Act Rule 13a-15(e). Based upon that evaluation, the Chief
  Executive Officer and Chief Financial Officer concluded that the Company's disclosure
  controls and procedures are effective. During the second quarter of 2003, there
  were no changes in the Company's internal control over financial reporting that
  have materially affected, or are reasonably likely to materially affect, the
  Company's internal control over financial reporting.

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POLYMER RESEARCH CORPORATION OF
  AMERICA OTHER INFORMATIONJUNE 30, 2003 AND 2002(Unaudited)

PART II - OTHER INFORMATION

ITEM 1 - Legal proceedings:

The Company is a defendant in various lawsuits,
  which arose, in the ordinary course of business. As of June 30, 2003 the Company
  has recorded a reserve which it deems adequate for legal expenses and any potential
  unfavorable rulings in certain of these cases. It is managements opinion
  that the outcome from such lawsuits will not have a material effect on the Companys
  financial position.

ITEM 2 - Changes in Securities: None

ITEM 3 - Defaults Upon Senior Securities: None

ITEM 4- Submission of Matters to a Vote of Security
  Holders:The Company held its annual meeting on June 9, 2003. At such meeting
  the following persons were elected directors:

|Director          |            |           | 
|----------------- | ---------- | --------- | 
|                  |            |           | 
|                  | Votes for: | Withheld: | 
|Carl Horowitz     | 1,903,696  | 0         | 
|Irene Horowitz    | 1,903,696  | 0         | 
|John Ryan         | 1,903,696  | 0         | 
|Alice Horowitz    | 1,903,696  | 0         | 
|Boris Jody        | 1,903,696  | 0         | 
|Mohan Sanduja     | 1,903,696  | 0         | 
|Terry J. Wolfgang | 1,903,696  | 0         | 
|Jascha Gurewitz   | 1,903,696  | 0         | 

ITEM 5- Other Information: None
  ITEM 6- Exhibits and Reports on Form 8-K:

(a)1 Exhibits



(b) Reports on Form 8-K

None

##### 

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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

|                | 
|--------------- | 
|                | 
|August 14, 2003 | 
|                | 

| |  | 
| |  | 
| |  | 







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EXHIBIT INDEX



Exhibit
  31CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
  ACT OF 2002Exhibit 32 CERTIFICATION PURSUANT
  TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY
  ACT OF 2002