RESEARCH FRONTIERS INC | 2013 | FY | 3


Activity in stock options is summarized below:

                Weighted      
          Weighted   Average      
    Number of   Average   Remaining   Aggregate
    Subject to   Exercise   Contractual   Intrinsic
         Option        Price        Term (Years)        Value
Balance at January 1, 2011          1,734,199     $       11.64   4.3   $ 281,600
 
       Granted   -     $ 20.43          
       Cancelled   (379,550 )   $ 3.72          
       Exercised   (85,000 )   $ 9.48          
Balance at December 31, 2011   1,269,649     $ 11.64   4.2   $ -
 
       Granted   (151,750 )   $ 12.76          
       Cancelled   -     $ -          
       Exercised   -     $ -          
Balance at December 31, 2012   1,117,899     $ 9.03   3.7   $ 4,250
 
       Granted   499,700     $ 5.26          
       Cancelled   (64,500 )   $ 12.81          
       Exercised   (72,500 )   $ 4.83          
Balance at December 31, 2013   1,480,599     $ 7.80   5.2   $ 399,000

     Activity in warrants is summarized below:

    Number of Shares Underlying      
    Warrants and Non-Employee   Weighted Average
         Options Granted        Exercise Price
Balance at January 1, 2011   708,909     $ 5.00 - 9.00
 
       Exercised   (4,652 )     5.64
       Terminated   -       -
       Issued   -       -
Balance at December 31, 2011   704,257     $ 5.00 - 9.00
 
       Exercised   -       -
       Terminated   -       -
       Issued   807,846       5.12
Balance at December 31, 2012   1,512,103     $ 5.56
 
       Exercised   (107,483 )     4.45
       Terminated   (25,000 )     9.00
       Issued   -       -
Balance at December 31, 2013   1,379,620     $ 5.58

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The Company valued these 2013 grants using the Black-Scholes option pricing model with the following weighted average assumptions:

Fair value on grant date $       2.86  
Expected dividend yield   --  
Expected volatility   64 %
Risk free interest rate   1.62 %
Expected term of the option   5 years  

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     During 2012 the Company sold, pursuant to the Company's effective registration statement filed with the SEC, equity in the Company as follows:

Date   Shares issued       Warrants issued       Unit price       Proceeds  
July 30, 2012   589,227   117,846   $       2.97   $       1,745,549 *
August 28, 2012                     1,900,000   380,000   $ 2.97   $ 5,229,201 **
October 3, 2012   1,250,000   250,000   $ 4.49   $ 5,275,750 ***
Total   3,739,227   747,846         $ 12,250,500  
____________________
 
(*) Net of fees of $4,455
(**) Net of fees of $413,719
(***)       Net of fees of $336,750

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