##### Table of Contents



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2000

Commission file Number 1-4591

FAIRMOUNT CHEMICAL CO., INC.
(Exact name of registrant as specified in its charter.)

|                                                                         |  |                                                
|------------------------------------------------------------------------ |  | -----------------------------------------------
|New Jersey
State of other jurisdiction of
incorporation or organization) |  | 22-0900720
(I.R.S. Employer
Identification No.)

|                                                                          |  |                 
|------------------------------------------------------------------------- |  | ----------------
|117 Blanchard Street, Newark, NJ
(Address of principal executive offices) |  | 07105
(Zip Code)

Registrants telephone number, including area code:  (973)-344-5790

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 the number of shares outstanding of each of the issuers
classes of common stock, as of the latest practical date:

Common Stock, $1 Par Value  8,292,866 shares as of April 1, 2000





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TABLE OF CONTENTS



|                                                                                                                                                                                           |                                                                                                           |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                                                                                                                                                             
|                                                                                                                                                                                           | Item 1. Financial Statements                                                                             
|                                                                                                                                                                                           | Statements of Operations
                      Three Months ended March 31, 2000 and 1999                
|                                                                                                                                                                                           | Balance Sheets
           March 31, 2000 and December 31, 1999                                           
|                                                                                                                                                                                           | Statement of Stockholders' Equity and Comprehensive
Income for three months ended March 31, 2000 and 1999
|                                                                                                                                                                                           | Statements of Cash Flows
               Three Months ended March 31, 2000 and 1999                       
|                                                                                                                                                                                           | NOTES TO FINANCIAL STATEMENTS                                                                            
|MANAGEMENT'S DISCUSSION AND
                       ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS
                                 March 31, 2000
|PART II - OTHER INFORMATION                                                                                                                                                               
|                                                                                                                                                                                           | Item 1. Legal Proceedings                                                                                
|                                                                                                                                                                                           | Item 6. Exhibits and Reports on Form 8-K                                                                 



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##### Table of Contents



INDEX

|        |  |  |         |  |  |                                                                                                           |  |      |       | 
|------- |  |  | ------- |  |  | --------------------------------------------------------------------------------------------------------- |  | ---- | ----- | 
|        |  |  |         |  |  |                                                                                                           |  | PAGE
|PART I  |  |  |         |  |  | FINANCIAL INFORMATION                                                                                    
|       
|       
|       
|       
|        |  |  | Item 1. | 
|       
|       
|       
|       
|        |  |  |         |  |  | Statements of Operations                                                                                 
|       
|       
|       
|       
|        |  |  |         |  |  | Three months ended March 31, 2000 and 1999                                                                |  |      | 3     | 
|       
|       
|       
|       
|        |  |  |         |  |  | Balance Sheets                                                                                            | 
|       
|       
|       
|       
|        |  |  |         |  |  | March 31, 2000 and December 31, 1999                                                                      |  |      | 4     | 
|       
|       
|       
|       
|        |  |  |         |  |  | Statement of Stockholders Equity and Comprehensive Income for
three months ended March 31, 2000 and 1999 |  |      | 5     | 
|       
|       
|       
|       
|        |  |  |         |  |  | Statements of Cash Flows                                                                                 
|       
|       
|       
|       
|        |  |  |         |  |  | Three months ended March 31, 2000 and 1999                                                                |  |      | 6     | 
|       
|       
|       
|       
|        |  |  |         |  |  | Notes to Financial Statements                                                                             |  |      | 7-10  | 
|       
|       
|       
|       
|        |  |  | Item 2. | 
|       
|       
|       
|       
|        |  |  |         |  |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations                     |  |      | 11-13 | 
|       
|       
|       
|       
|PART II |  |  |         |  |  | OTHER INFORMATION                                                                                        
|       
|       
|       
|       
|        |  |  | Item 1. |  |  | Legal Proceedings                                                                                         |  |      | 14    | 
|       
|       
|       
|       
|        |  |  | Item 6. |  |  | Exhibits and Reports on Form 8-K                                                                          |  |      | 14-16 | 

2



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##### Table of Contents









PART I. FINANCIAL INFORMATION







Item 1.Financial Statements







FAIRMOUNT CHEMICAL CO., INC.Statements of Operations

For The Three Months Ended March 31, 2000 and 1999
(Unaudited)

|                                            |                    |         |                         |   |                    |         |                 |   |            |          |  
|------------------------------------------- | ------------------ | ------- | ----------------------- | - | ------------------ | ------- | --------------- | - | ---------- | -------- | -
|                                            |                    |         |                         |   | Three Months Ended
|                                            |                    |         |                         |   |                   
|                                            |                    |         |                         |   | March 31, 2000     |         | March. 31, 1999
|                                            |                    |         |                         |   |                    |         |                
|Net sales                                   |                    | $       | 3,464,100               |   |                    | $       | 2,245,500       |  
|                                           
|                                           
|                                           
|                                           
|Cost of goods sold                          |                    |         | 2,708,400               |   |                    |         | 2,019,400       |  
|                                            |                    |         |                         |   |                    |         |                 |  
|Gross profit                                |                    |         | 755,700                 |   |                    |         | 226,100         |  
|                                           
|                                           
|                                           
|                                           
|Research & development                      |                    |         | 101,400                 |   |                    |         | 100,300         |  
|                                           
|                                           
|                                           
|                                           
|Selling, general and administrative expense |                    |         | 538,600                 |   |                    |         | 454,800         |  
|                                            |                    |         |                         |   |                    |         |                 |  
|                                            |                    |         | Operating income (loss) |   |                    | 115,700 |                 |   |            | (329,000 | )
|                                           
|                                           
|                                           
|                                           
|Interest expense                            |                    |         | 43,000                  |   |                    |         | 32,800          |  
|                                           
|                                           
|                                           
|                                           
|Insurance proceeds                          |                    |         | (100,000                | ) |                    |         | (375,000        | )
|                                           
|                                           
|                                           
|                                           
|Other income                                |                    |         | (15,300                 | ) |                    |         | (28,100         | )
|                                           
|                                           
|                                           
|                                           
|Net income before income taxes              |                    |         | 188,000                 |   |                    |         | 41,300          |  
|                                           
|                                           
|                                           
|                                           
|Income taxes                                |                    |         |                        |   |                    |         |                |  
|                                            |                    |         |                         |   |                    |         |                 |  
|                                            |                    |         | Net earnings            |   | $                  | 188,000 |                 |   | $          | 41,300   |  
|                                            |                    |         |                         |   |                    |         |                 |  
|                                            | Earnings per share
|                                           
|                                           
|                                           
|                                           
|                                            |                    | Basic   |                         | $ | .02                |         |                 | $ |           |         
|                                            |                    |         |                         |   |                    |         |                 |  
|                                            |                    | Diluted |                         | $ | .01                |         |                 | $ |           |         
|                                            |                    |         |                         |   |                    |         |                 |  
|Common shares and equivalents outstanding  
|                                           
|                                           
|                                           
|                                           
|                                            |                    | Basic   |                         |   | 8,292,866          |         |                 |   | 8,292,866  |         
|                                            |                    |         |                         |   |                    |         |                 |  
|                                            |                    | Diluted |                         |   | 14,232,000         |         |                 |   | 14,226,700 |         
|                                            |                    |         |                         |   |                    |         |                 |  

See Accompanying Notes to Financial Statements.

3



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##### Table of Contents









FAIRMOUNT CHEMICAL CO., INC.Balance Sheets

|                                           |                                             |                                             |                      |                                                   |           |                |            |                   |           |   |           | 
|------------------------------------------ | ------------------------------------------- | ------------------------------------------- | -------------------- | ------------------------------------------------- | --------- | -------------- | ---------- | ----------------- | --------- | - | --------- | 
|                                           |                                             |                                             |                      |                                                   |           | March 31, 2000 |            | December 31, 1999
|                                           |                                             |                                             |                      |                                                   |           |                |            |                  
|                                           |                                             |                                             |                      |                                                   |           | (Unaudited)   
|Assets                                    
|                                          
|                                          
|                                          
|                                          
|                                           | Current Assets:                            
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Cash                                              |           | $              | 2,004,400  |                   |           | $ | 2,481,100 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Accounts receivable-trade                         |           |                | 2,715,600  |                   |           |   | 1,985,100 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Inventories                                       |           |                | 2,510,600  |                   |           |   | 1,957,800 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Prepaid expenses                                  |           |                | 138,100    |                   |           |   | 114,100   | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Other current assets                              |           |                | 14,000     |                   |           |   | 10,200    | 
|                                           |                                             |                                             |                      |                                                   |           |                |            |                  
|                                           | Total Current Assets                        |                                             |                      | 7,382,700                                         |           |                |            | 6,548,300         |          
|                                          
|                                          
|                                          
|                                          
|Property, plant and equipment             
|                                          
|                                          
|                                          
|                                          
|                                           |                                             | less accumulated depreciation of           
|                                          
|                                          
|                                          
|                                          
|                                           |                                             | $5,369,400 and $5,204,400 as of March      
|                                          
|                                          
|                                          
|                                          
|                                           |                                             | 31, 2000 and December 31 1999, respectively |                      |                                                   | 4,020,500 |                |            |                   | 3,805,800 |  
|                                          
|                                          
|                                          
|                                          
|Other assets                               |                                             |                                             | 700                  |                                                   |           |                | 700        |                  
|                                           |                                             |                                             |                      |                                                   |           |                |            |                  
|Total Assets                               |                                             | $                                           | 11,403,900           |                                                   |           | $              | 10,354,800 |                  
|                                           |                                             |                                             |                      |                                                   |           |                |            |                  
|Liabilities and Stockholders Equity      
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             | Current Liabilities:
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Accounts payable                                  |           | $              | 1,600,100  |                   |           | $ | 826,200   | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Accrued compensation                              |           |                | 67,300     |                   |           |   | 84,200    | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Pension liability                                 |           |                | 196,300    |                   |           |   | 153,200   | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Other accrued liabilities                         |           |                | 297,700    |                   |           |   | 236,700   | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Short-term bank borrowings                        |           |                | 50,000     |                   |           |   |          | 
|                                           |                                             |                                             |                      |                                                   |           |                |            |                  
|                                           |                                             |                                             |                      | Total Current Liabilities                         |           |                | 2,211,400  |                   |           |   | 1,300,300 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Promissory notes to affiliated parties            |           |                | 1,571,600  |                   |           |   | 1,571,600 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Pension liability                                 |           |                | 95,900     |                   |           |   | 145,900   | 
|                                          
|                                          
|                                          
|                                          
|Stockholders Equity                      
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | Preferred stock, par and liquidation value $1 per
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | share authorized - 10,000,000 shares; 5,400,000  
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | shares issued and outstanding (liquidation       
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | value $5,400,000)                                 |           |                | 5,400,000  |                   |           |   | 5,400,000 | 
|                                          
|                                          
|                                          
|                                          
|                                           | Common stock, par value $1 per share       
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | authorized - 15,000,000 shares; 8,293,366 shares 
|                                          
|                                          
|                                          
|                                          
|                                           |                                             |                                             |                      | issued and outstanding                            |           |                | 8,293,400  |                   |           |   | 8,293,400 | 
|                                          
|                                          
|                                          
|                                          
|                                           | Less: Treasury stock (at cost) - 500 shares |                                             |                      | (500                                              | )         |                |            | (500              | )        
|                                          
|                                          
|                                          
|                                          
|                                           | Capital in excess of par value              |                                             |                      | 7,316,000                                         |           |                |            | 7,316,000         |          
|                                          
|                                          
|                                          
|                                          
|                                           | Accumulated deficit                         |                                             |                      | (13,386,700                                       | )         |                |            | (13,574,700       | )        
|                                          
|                                          
|                                          
|                                          
|                                           | Additional minimum pension liability        |                                             |                      | (97,200                                           | )         |                |            | (97,200           | )        
|                                           |                                             |                                             |                      |                                                   |           |                |            |                  
|                                           |                                             |                                             |                      | Total Stockholders Equity                        |           |                | 7,525,000  |                   |           |   | 7,337,000 | 
|                                           |                                             |                                             |                      |                                                   |           |                |            |                  
|Total Liabilities and Stockholders Equity |                                             | $                                           | 11,403,900           |                                                   |           | $              | 10,354,800 |                  
|                                           |                                             |                                             |                      |                                                   |           |                |            |                  

See accompanying Notes to Financial Statements.

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##### Table of Contents









FAIRMOUNT CHEMICAL CO., INC.

Statement of Changes in Stockholders Equity
and
Comprehensive Income
For Three Months Ended March 31, 2000 and 1999

(Unaudited)

|                                      |                      |                     |                                      |             |           |         |      |         |               |         |           |             |           |          |               |        |   |        | 
|------------------------------------- | -------------------- | ------------------- | ------------------------------------ | ----------- | --------- | ------- | ---- | ------- | ------------- | ------- | --------- | ----------- | --------- | -------- | ------------- | ------ | - | ------ | 
|                                      |                      |                     |                                      |             | 2000      |         | 1999
|                                      |                      |                     |                                      |             |           |         |     
|                                      |                      |                     |                                      |             |           |         |      |         | Comprehensive |         |           |             |           |          | Comprehensive
|                                      |                      |                     |                                      |             |           |         |      |         | Income        |         |           |             |           |          | Income       
|                                      |                      |                     |                                      |             |           |         |      |         |               |         |           |             |           |          |              
|Preferred stock:                     
|                                     
|                                     
|                                     
|                                     
|                                      | Balance at March 31, |                     | $                                    | 5,400,000   |           |         |      |         |               |         | $         | 5,400,000   |          
|                                     
|                                     
|                                     
|                                     
|                                      |                      |                     | (5,400,000 shares)                  
|                                     
|                                     
|                                     
|                                     
|Common stock:                        
|                                     
|                                     
|                                     
|                                     
|                                      |                      | Balance at March 31 |                                      |             | 8,293,400 |         |      |         |               |         |           |             | 8,293,400 |         
|                                     
|                                     
|                                     
|                                     
|                                      |                      |                     | (8,293,366 shares)                  
|                                     
|                                     
|                                     
|                                     
|Capital in excess of par value:       |                      |                     | 7,316,000                            |             |           |         |      |         |               |         | 7,316,000 |            
|                                     
|                                     
|                                     
|                                     
|                                      | Balance at March 31,
|                                     
|                                     
|                                     
|                                     
|Accumulated deficit:                 
|                                     
|                                     
|                                     
|                                     
|                                      | Balance at January 1 |                     |                                      | (13,574,700 | )         |         |      |         |               |         |           | (13,009,200 | )        
|                                     
|                                     
|                                     
|                                     
|                                      | Net income           |                     |                                      | 188,000     |           |         |      | 188,000 |               |         |           | 41,300      |           |          |               | 41,300 |  
|                                      |                      |                     |                                      |             |           |         |      |         |               |         |           |            
|                                      | Balance at March 31, |                     |                                      | (13,386,700 | )         |         |      |         |               |         |           | (12,967,900 | )        
|                                     
|                                     
|                                     
|                                     
|Accumulated other comprehensive loss:
|                                     
|                                     
|                                     
|                                     
|                                      |                      |                     | Balance at January 1                 |             |           | (97,200 | )    |         |               |         |           |             |           | (301,600 | )            
|                                     
|                                     
|                                     
|                                     
|                                      |                      |                     | Additional minimum pension liability |             |           |        |      |         |               |        |           |             |           |         |               |        |   |       | 
|                                      |                      |                     |                                      |             |           |         |      |         |               |         |           |             |           |          |               |       
|                                      |                      |                     | Comprehensive income                 |             |           |         |      |         | $             | 188,000 |           |             |           |          |               |        | $ | 41,300 | 
|                                      |                      |                     |                                      |             |           |         |      |         |               |         |           |            
|                                     
|                                     
|                                     
|                                     
|Balance at March 31                   |                      |                     | (97,200                              | )           |           |         |      |         |               |         | (301,600  | )          
|                                     
|                                     
|                                     
|                                     
|Treasury stock:                      
|                                     
|                                     
|                                     
|                                     
|                                      | Balance at March 31, |                     |                                      | (500        | )         |         |      |         |               |         |           | (500        | )        
|                                     
|                                     
|                                     
|                                     
|                                      |                      |                     | (500 shares)                        
|                                      |                      |                     |                                      |             |           |         |      |         |               |         |           |            
|Total Stockholders Equity            |                      | $                   | 7,525,000                            |             |           |         |      |         |               | $       | 7,739,400 |            
|                                      |                      |                     |                                      |             |           |         |      |         |               |         |           |            

See accompanying notes to financial statements.

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##### Table of Contents









FAIRMOUNT CHEMICAL CO., INC.
Statements of Cash Flows
For The Three Months Ended March 31, 2000 and 1999
(Unaudited)

|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |         |         |        |          |  
|------------------------------------------------- | ------------------------------------ | ----------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ------- | --------- | ------- | ------- | ------ | -------- | -
|                                                  |                                      |                         |                                                                                               |                                                      |         | 2000    |           | 1999   
|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |        
|Cash Flow from Operating Activities:             
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         | Net earnings                                                                                  |                                                      | $       | 188,000 |           |         | $       | 41,300 |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         | Adjustments to reconcile net earnings to
net cash (used in) provided by operating
activities:
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         |                                                                                               | Depreciation                                         |         |         | 165,000   |         |         |        | 180,000  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         |                                                                                               | Insurance proceeds, net                              |         |         | (100,000  | )       |         |        | (375,000 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Increase (decrease) from changes in:
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         |                                                                                               | Accounts receivable-trade                            |         |         | (730,500  | )       |         |        | 68,800   |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         |                                                                                               | Inventories                                          |         |         | (552,800  | )       |         |        | (515,600 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         |                                                                                               | Prepaid expenses                                     |         |         | (24,000   | )       |         |        | 30,800   |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         |                                                                                               | Other assets                                         |         |         | (3,800    | )       |         |        | (28,200  | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         |                                                                                               | Accounts payable                                     |         |         | 773,900   |         |         |        | 353,400  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         |                                                                                               | Accrued compensation                                 |         |         | (16,900   | )       |         |        | (63,000  | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      |                         |                                                                                               | Other liabilities                                    |         |         | 54,100    |         |         |        | (33,800  | )
|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |        
|                                                  |                                      |                         |                                                                                               | Cash Flow Used in
Operating Activities               |         |         | (247,000  | )       |         |        | (341,300 | )
|                                                 
|                                                 
|                                                 
|                                                 
|Cash Flow From Investing Activities:             
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Capital expenditures                 |                         |                                                                                               | (379,700                                             | )       |         |           | (52,300 | )      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      | Insurance proceeds, net |                                                                                               |                                                      | 100,000 |         |           |         | 375,000 |       
|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |        
|                                                  |                                      |                         |                                                                                               | Net Cash (Used In) Provided by
Investing Activities  |         |         | (279,700  | )       |         |        | 322,700  |  
|                                                 
|                                                 
|                                                 
|                                                 
|Cash Flow From in Financing Activities:          
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Bank (repayment) borrowings          |                         |                                                                                               | 50,000                                               |         |         |           | (12,700 | )      
|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |        
|                                                  |                                      |                         |                                                                                               | Cash Flow Provided by (Used In)
Financing Activities |         |         | 50,000    |         |         |        | (12,700  | )
|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |        
|Decrease in Cash                                  |                                      |                         | (476,700                                                                                      | )                                                    |         |         | (31,300   | )      
|                                                 
|                                                 
|                                                 
|                                                 
|Cash at Beginning of Period                       |                                      |                         | 2,481,100                                                                                     |                                                      |         |         | 2,422,700 |        
|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |        
|Cash at End of Period                             |                                      | $                       | 2,004,400                                                                                     |                                                      |         | $       | 2,391,400 |        
|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |        
|Supplemental Disclosure of Cash Flow Information:
|                                                 
|                                                 
|                                                 
|                                                 
|Interest paid                                     |                                      | $                       | 43,000                                                                                        |                                                      |         | $       | 32,800    |        
|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |        
|Income taxes paid                                 |                                      | $                       |                                                                                              |                                                      |         | $       |          |        
|                                                  |                                      |                         |                                                                                               |                                                      |         |         |           |        

See accompanying Notes to Financial Statements

6



---



##### Table of Contents









FAIRMOUNT CHEMICAL CO., INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2000

Note 1. Summary of Significant Accounting Policies

ORGANIZATION

The accompanying financial statements, which should be read in
conjunction with the financial statements of Fairmount Chemical Co., Inc.
(the Company) included in the 1999 Annual Report filed on Form 10-KSB, are
unaudited but have been prepared in the ordinary course of business for the
purpose of providing information with respect to the interim period. The
Company believes that all adjustments (none of which were other than normal
recurring accruals) necessary for a fair presentation for such periods have
been included. The Companys interim results of operations are not
necessarily indicative of what may be expected for the full year.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform with the
2000 presentation.

REVENUE

Revenue is recognized on the date of invoice to a customer and invoices
are prepared on or after the date of shipment. The Companys terms are FOB
shipping point and accordingly title for goods pass to the customer when
product is shipped. Sales are generally final, without a right of return. If
the product does not meet specifications, the Company may accept returns.

INCOME TAXES

The Company accounts for income taxes in accordance with the asset and
liability method. Under the asset and liability method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.

No provisions for income taxes have been recorded by the Company as a
result of net operating losses utilized. A valuation allowance has been
recorded at March 31, 2000 and March 31, 1999 for that portion of deferred
tax assets which are not presently considered more likely than not to be
realized.

FINANCIAL STATEMENTS

The statements of operations for the three months ended March 31, 2000
and 1999, the statements of cash flows for the three months ended March 31,
2000 and 1999, and the balance sheet as of March 31, 2000 are unaudited. The
balance sheet as of December 31, 1999 is audited.

7



---



##### Table of Contents



Notes to Financial Statements (Continued)

Note 2. Earnings Per Share

Basic earnings per share are based on the net earnings of the Company
since there were no preferred dividends paid in the periods ended March 31, 2000
and 1999. Diluted earnings per share is calculated by dividing the net earnings
of the Company by the weighted average number of shares outstanding adjusted for
dilutive common share equivalents including preferred stock and shares granted
under stock option arrangements. As of March 31, 2000 and 1999, 1,072,500 stock
options were outstanding, 72,500 with an exercise price of $1.00 per share,
1,000,000 with an exercise price of $.11 per share.

Note 3. Long Term Promissory Notes to Affiliated Parties

All promissory notes have similar terms and conditions. Interest
payable from January 1, 1999 through December 31, 1999 was at the rate of
7.75% per annum. Interest is payable at the corporate base rate posted by
Citibank, N. A. (or its successor) on the last banking day of the previous
calendar year. Interest payable from January 1, 2000 through December 31,
2000 is at the rate of 8.5 % per annum. All of the promissory notes are
subordinated to the Companys line of credit financing with Summit Bank and
are collateralized by security agreements on the Companys accounts
receivable, inventories and personal property. All promissory notes are due
January 1, 2005. Interest paid on long-term debt to affiliated parties during
the three months ended March 31, 2000 was $33,400 and $28,400 during the
three months ended March 31, 1999.



| |                  
| | -----------------
| | Promissory Notes:

|                           |  |   |           | 
|-------------------------- |  | - | --------- | 
|Leistner Trust             |  | $ | 491,600   | 
|                          
|                          
|                          
|                          
|Leistner Trust             |  | $ | 648,000   | 
|                          
|                          
|                          
|                          
|da Mota Family Partnership |  | $ | 224,600   | 
|                          
|                          
|                          
|                          
|Glen da Mota               |  | $ | 142,500   | 
|                          
|                          
|                          
|                          
|Lynn da Mota               |  | $ | 64,800    | 
|                           |  |   |           | 
|                           |  | $ | 1,571,600 | 
|                           |  |   |           | 

Note 4. Bank Borrowings

The Company had a $1,250,000 line of credit from Summit Bank. The line
of credit is comprised of two separate available balances. There is $750,000
available for working capital purposes and $500,000 available to finance
capital expenditures. Interest on the borrowings is at the banks prime rate
plus 1%. Borrowings and repayments under the working capital line of credit
are handled on a revolving credit basis. Borrowings against the capital
expenditure line of credit are treated as a three-year note. The line of
credit is subject to an annual review for renewal. The bank has been given a
first security interest in the accounts receivable, inventories and personal
property of the Company. The working capital line of credit was amended
during the second quarter of 2000. Under the amended loan agreement Fairmount
will be able to borrow the lesser of $1,250,000 or up to 80 % of its eligible
receivables, as defined. The 80 % limitation on eligible receivables should
not have a material effect on Fairmount. The capital expenditure line was not
renewed as a result of Fairmounts losses. The loss of the capital
expenditures credit line will limit Fairmounts options to finance its
capital expenditures, however it will not have a material effect on its
operations.

8



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##### Table of Contents



Notes to Financial Statements (Continued)

Note 5. Inventories

Inventories at March 31, 2000 and December 31, 1999 consisted of the
following:

|               |  |                |           |                   |  |   |           | 
|-------------- |  | -------------- | --------- | ----------------- |  | - | --------- | 
|               |  | March 31, 2000 |           | December 31, 1999
|               |  |                |           |                  
|Finished goods |  | $              | 2,106,400 |                   |  | $ | 1,622,900 | 
|              
|              
|              
|              
|Raw materials  |  |                | 404,200   |                   |  |   | 334,900   | 
|               |  |                |           |                   |  |   |           | 
|               |  | $              | 2,510,600 |                   |  | $ | 1,957,800 | 
|               |  |                |           |                   |  |   |           | 

Note 6. Insurance Proceeds

During February 1999 the Company received a payment of $375,000
from its property insurance carrier as final settlement for the property
damages sustained from the March 25, 1997 dryer explosion.

On November 10, 1999, a fire destroyed some equipment and a
portion of the roof in one of the production buildings. Fairmount received
$100,000 from its property insurance carrier in March 2000 and an additional
$233,100 in May 2000 in partial settlement for its property losses caused by
the fire. These payments are in addition to the $100,000 received in December
1999.

Note 7. Contingencies

The Company has received notice from the New Jersey Department of
Environmental Protection (NJDEP) that the NJDEP is investigating whether
any material from the Company has caused or contributed to the contamination
detected at the Ciuba landfill property in Newark. The NJDEP alleges that
there is a possibility that during the 1970s the Company disposed of waste
generated at the Companys facility through contracts with certain garbage
removal companies located at the Ciuba landfill. The Company has also
received notice from the United States Environmental Protection Agency
(USEPA) that the USEPA has information indicating that hazardous substances
from the Company may have been discharged into the Passaic River. It is the
Companys understanding that these allegations by the EPA are related to
historical rather than present events. The Company has taken the position
that its material neither caused nor contributed to the contamination of the
Passaic River and that it has not discharged hazardous substances into the
Passaic River. In both cases, it is possible that potentially responsible
parties will bring claims against the Company alleging that it is at least
partially responsible for the contamination. To date, no litigation has
commenced with respect to these matters.

It is the Companys policy to accrue and charge against earnings,
environmental cleanup costs when it is probable that a liability has been
incurred and an amount is reasonably estimable. These accruals are reviewed
periodically and adjusted, if necessary, as additional information becomes
available. These accruals can change substantially due to such factors as
additional information on the nature or extent of the contamination, methods
of remediation required and other actions by government agencies or private
parties. Cash expenditures often lag behind the period in which an accrual is
recorded by a number of years. The Company has not accrued costs associated
with the above two matters, because the amounts cannot be reasonably
estimated.

Management does not believe that the resolution of such matters will
have a material adverse affect on the financial position of the Company but
could be material to the results of operations of the Company in any one
accounting period.

9



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##### Table of Contents



Notes to Financial Statements (Continued)

A bodily injury claim was filed against the Company on December 2, 1998
in the Superior Court of New Jersey Law Division, Hudson County. The
plaintiff alleges that on March 25, 1997, the date of an explosion at the
Companys plant, the force of the explosion threw him backward and resulted
in injuries. The plaintiff was an invitee upon the adjoining property to the
Company. The Companys commercial general liability and commercial umbrella
insurance carrier is defending the Company in that action and the Company is
subject to a $25,000 deductible.

On May 13, 1999, a toxic tort case was brought against the Company and
other defendants by former employees, family members of the former employees
or heirs of deceased former employees of La Gloria and Gas Company and the La
Gloria Refinery located in Tyler, Texas. The claimants contend that the
employee plaintiffs and their families were exposed to a number of toxic
chemicals by working in and around them or with them at the La Gloria Plant
and by second-hand exposure occurring as a result of the toxic substance
being brought home on the clothing and bodies of the employee plaintiffs.
Plaintiffs have sued the employer defendants and numerous manufacturers,
suppliers, and distributors of chemicals, solvents and products supplied to
the La Gloria Plant. The Company sold a hydrazine blend to La Gloria during
1990 and 1991. On October 21, 1999, the Federal Court granted defendants
motion to dismiss because of lack of subject matter jurisdiction. Claimants
re-filed this cause of action in Texas state court in the District Court of
Harrison County, Texas on December 15, 1999. Claimants allegations in the
state court petition are identical to the allegations discussed above. The
discovery process is in the initial phase and the Company is not able to
determine potential exposure at this time. The Companys commercial general
liability and commercial umbrella insurance carrier is defending the Company
in that action.

The Company is subject to various claims, and other routine litigation
arising in the normal course of its business. Management believes that the
resolution of such matters will not have a material adverse affect on the
financial position of the Company but could be material to the results of
operations of the Company in any one accounting period.

10



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##### Table of Contents



FAIRMOUNT CHEMICAL CO., INC.

Item 2







MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
March 31, 2000

Liquidity and Capital Resources

To meet its liquidity requirements, including its capital program, the
Company accesses funds generated from operations, its available cash balances
and its bank line of credit with Summit Bank in Hackensack, New Jersey. The
line of credit was renewed during the second quarter of 1999. The working
capital line of credit was amended during the second quarter of 2000. Under
the amended loan agreement Fairmount will be able to borrow the lesser of
$1,250,000 or up to 80 % of its eligible receivables, as defined. The 80 %
limitation on eligible receivables should not have a material effect on
Fairmount. The capital expenditure line was not renewed as a result of
Fairmounts losses. The loss of the capital expenditures credit line will
limit Fairmounts options to finance its capital expenditures, however it
will not have a material effect on its operations.

The Companys working capital decreased by $76,700 during the first
three months of 2000. This decrease was due in part to lower period end
cash balance, higher accounts payable of $773,900, higher pension liability
of $43,100 and higher other liabilities of $61,000. These decreases in
working capital were partially offset by higher accounts receivables of
$730,500, higher inventories of $552,800 and a payment of $100,000 received
from Fairmounts property insurance carrier as partial settlement of the
property damaged sustained from a fire on November 10, 1999.

The inventory was higher as of March 31, 2000 as compared to December 31,
1999 due to increased purchases of raw materials and production in excess of
shipment in anticipation of increased shipments during the second and third
quarters. The accounts payable increase was a result of increased raw material
and supply purchases. The increase in accounts receivable was due to increased
shipments during the first quarter of 2000, with March 2000 being the month with
the highest level of shipments.

On March 25, 1997, equipment used to dry some of Fairmounts products
was destroyed in an explosion. No employees were injured. The damage to
both the building housing the equipment and the equipment was extensive and
the building has been razed. Other surrounding buildings experienced minor
collateral damage. Fairmount has discontinued drying the product that was
being dried at the time of the explosion. This product has been reformulated
for safety concerns. Fairmount has lost some orders because of the
reformulation, but the effect on its operations is immaterial.

On November 10, 1999, a fire destroyed some equipment and a portion of
the roof in one of the production buildings. No employees were injured. The
total amount of the damage is not known at this time, however Fairmount
believes that its insurance is sufficient to cover the property losses
sustained. The fire had an adverse effect on operations during the fourth
quarter of 1999, and this adverse effect is expected to continue through the
first half of 2000. Fairmount expects to be able to conduct normal
operations in this building during second quarter of 2000.

Fairmount was notified by its insurance carrier that when its property and
boiler insurance policy expires on February 1, 2000, it would not be renewed
because of adverse loss experience.

11



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##### Table of Contents



Fairmount has obtained coverage through another carrier, though at a
substantially higher premium.

Year 2000 Compliance

As of April 30, 2000, Fairmount has not encountered any year 2000
problems with its computer systems. Since January 1, 2000 all vendors,
supplies and contractors have supplied services and material on a routine
basis. Fairmount spent $75,000 in replacing hardware and software for its
Year 2000 initiative. It is not expected that any funds will be spent for
year 2000 compliances during the year 2000.

Results of Operations

Net sales for the first three months of 2000 were $3,464,100, an
increase of $1,218,600 or 54.3 % as compared to 1999.

|                                 |       |   |                              |           |      |   |         |           |  |   |          |           | 
|-------------------------------- | ----- | - | ---------------------------- | --------- | ---- | - | ------- | --------- |  | - | -------- | --------- | 
|                                 |       |   | Three Months Ended March 31,
|                                 |       |   |                             
|                                 |       |   | 2000                         |           | 1999 |   | Change 
|                                 |       |   |                              |           |      |   |        
|Imaging & photographic
chemicals |       | $ | 849,700                      |           |      | $ | 236,100 |           |  | $ | 613,600  |          
|                                
|                                
|                                
|                                
|Hydrazine blends                 |       |   | 580,500                      |           |      |   | 594,800 |           |  |   | (14,300  | )        
|                                
|                                
|                                
|                                
|Hydrazine derivatives            |       |   | 212,600                      |           |      |   | 107,200 |           |  |   | 105,400  |          
|                                
|                                
|                                
|                                
|Plastic additives                |       |   | 1,405,500                    |           |      |   | 790,700 |           |  |   | 614,800  |          
|                                
|                                
|                                
|                                
|Specialty chemicals              |       |   | 415,800                      |           |      |   | 516,700 |           |  |   | (100,900 | )        
|                                 |       |   |                              |           |      |   |         |           |  |   |          |          
|                                 | Total |   | $                            | 3,464,100 |      |   | $       | 2,245,500 |  |   | $        | 1,218,600 | 
|                                 |       |   |                              |           |      |   |         |           |  |   |          |          

The increase in imaging chemical sales was due in part to increased
shipments to the photographic industry. The demand for certain types of
chemicals used in photographic films is expected to decrease during the
coming years as the market for film diminishes due in part to new digital
imaging technologies. Fairmount is aware of this possibility and is taking
steps to substitute new products that are used in making photographic paper
and increase its market share of existing products by broadening its customer
base.

Sales of plastics additives increased from $790,700 in the first
quarter of 1999 to $1,405,500 in the first quarter of 2000, an increase of
$614,800 or 78%. The increase in the sales amount is net of price decreases
effective during the second half of 1999. This sales value increase was due
to increased volume to a major European customer. As in prior years,
Fairmount expects the downward pressure on plastics additive prices to
continue.

Each class of similar products contributed the following percentage of
total sales in each of the following two quarters:

|                                 |  |                              |     |      |  |  |     |  
|-------------------------------- |  | ---------------------------- | --- | ---- |  |  | --- | -
|                                 |  | Three Months Ended March 31,
|                                 |  |                             
|                                 |  | 2000                         |     | 1999
|                                 |  |                              |     |     
|Imaging & photographic chemicals |  |                              | 25  | %    |  |  | 11  | %
|                                
|                                
|                                
|                                
|Hydrazine blends                 |  |                              | 16  | %    |  |  | 26  | %
|                                
|                                
|                                
|                                
|Hydrazine derivatives            |  |                              | 6   | %    |  |  | 5   | %
|                                
|                                
|                                
|                                
|Plastic additives                |  |                              | 41  | %    |  |  | 35  | %
|                                
|                                
|                                
|                                
|Specialty chemicals              |  |                              | 12  | %    |  |  | 23  | %
|                                 |  |                              |     |      |  |  |     |  
|                                 |  |                              | 100 | %    |  |  | 100 | %
|                                 |  |                              |     |      |  |  |     |  

12



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##### Table of Contents



The gross profit for the first three months of 2000 was $755,700, an
increase of $529,600 compared to 1999. As a percent of sales the gross margin
during the first three months of 2000 was 21.8 % compared to 10.0 % during
1999. The increase in gross profit was in part due to the increase in sales
of imaging chemicals, which traditionally have higher gross margins than the
Companys other product lines and increase sales of plastic additives. In
addition to higher sales volume, higher production had a positive impact on
gross profit.

Selling, general and administrative expenses increased by $83,800 in
the first quarter of 2000 compared to the same period in 1999. Selling
expenses increased $8,400, and general and administrative expenses increased
by $75,400.

Interest expense was higher in the first three months of 2000 versus
1999 due to the increased interest rate on the remaining debt owed to
affiliated parties per the new promissory note agreements and increased other
interest charges.

During the first quarter of 2000, Fairmount received gross insurance
proceeds of $100,000 as partial settlement of the property losses sustained
from a fire on November 10, 1999. During the first quarter of 1999, Fairmount
received gross insurance proceeds of $375,000, for property losses sustained
from the March 25, 1997 explosion.

No provisions for income taxes have been recorded by the Company as a
result of net operating losses utilized. A valuation allowance has been
recorded at March 31, 2000 and March 31, 1999 for that portion of deferred
tax assets, which are not presently considered more likely than not to be
realized.

Forward Looking Statements

This document contains forward-looking statements that involve risks
and uncertainties that could cause the results of Fairmount to differ
materially from those expressed or implied by such forward-looking
statements. These risks include the timely development, production and
acceptance of new products and services; competition; the flow of products
into third-party distribution channels; and other risks detailed from time to
time in Fairmounts Securities and Exchange Commission filings. The words
anticipates, believes, estimates, expects, intends, will, and
similar expressions, as they relate to Fairmount or our management, may
identify forward-looking statements. Such statements reflect the current
views of Fairmount with respect to future events and are subject to certain
risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary from those described herein as anticipated, believed,
estimated or expected. Fairmount does not intend to update these
forward-looking statements.

13



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##### Table of Contents









PART II  OTHER INFORMATION







Item 1. Legal Proceedings

During the quarter ended March 31, 2000, there have been no material
changes in the potential claims reported by the Company in its Annual Report
on Form 10-KSB in Item 1. Business  Environmental Laws and Government
Regulations.







Item 6. Exhibits and Reports on Form 8-K

|    |  |                                                                                                                                                                                                                                                              
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Exhibits                                                                                                                                                                                                                                                     
|   
|   
|   
|   
|3.1 |  | Restated Certificate of Incorporation filed May 11, 1982 with
Secretary of State of New Jersey, incorporated by reference from
Fairmounts Form 10-K for the fiscal year ending December 31,
1982, (Exhibit 3.3).                                            
|   
|   
|   
|   
|3.2 |  | Restated Certificate of Incorporation filed May 13, 1993 with
the Secretary of State of New Jersey, incorporated by
reference from Fairmounts Form 10-KSB or the fiscal year
ending December 31, 1993, (Exhibit 3.1.).                                      
|   
|   
|   
|   
|3.3 |  | Restated Certificate of Incorporation filed June 8, 1994 with
the Secretary of the State of New Jersey, incorporated by
reference from Fairmounts Form 10-KSB for the fiscal year
ending December 31, 1994, (Exhibit 3.1.).                                 
|   
|   
|   
|   
|3.4 |  | Certificate of Amendment to Certificate of Incorporation filed
June 9, 1986 with Secretary of State of New Jersey,
incorporated by reference from Fairmounts Form 10-KSB for the
fiscal year ending December 31, 1986, (Exhibit 3.1.).                      
|   
|   
|   
|   
|3.5 |  | Certificate of Amendment to Certificate of Incorporation filed
June 1, 1988 with Secretary of State of New Jersey,
incorporated by reference from Fairmounts Form 10-K for the
fiscal year ending December 31, 1988, (Exhibit 3).                           
|   
|   
|   
|   
|3.6 |  | By-laws as last amended February 21, 1984, incorporated by
reference from Fairmounts Form 10-K for the fiscal year ending
December 31, 1983, (sequentially numbered pages 56 through 69).                                                                   
|   
|   
|   
|   
|4.1 |  | Letter Agreement extending the date for maturity of current
indebtedness to Fairmount Fund and the Estate of Leistner to
April 1, 1998 incorporated by reference from the Companys Form
10-KSB for the fiscal year ending December 31, 1996, (Exhibit
4(a)).
|   
|   
|   
|   
|4.2 |  | Employment agreement between Todd K. Walker (Employee) and
Fairmount incorporated by reference from Fairmounts Form 10-KSB
for the fiscal year ending December 31, 1994, (Exhibit 4(b)).                                                                    
|   
|   
|   
|   
|4.3 |  | Termination of the 1992 Credit Facility Loan Agreement
incorporated by reference from Fairmounts Form 10-KSB for the
fiscal year ended December 31, 1997, (Exhibit 4(a)).                                                                                   

14



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##### Table of Contents



|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|10.1 |  | Amendment No. 10, dated September 10, 1987, to the Statement on
Schedule 13D, previously filed by Phoenix Chemical Company and
the Phoenix Chemical Corporation with the Securities and
Exchange Commission on March 19, 1982 and April 9, 1982,
respectively, and the American Stock Exchange on March 22,
1982 and April 12, 1982, respectively, with respect to
Fairmounts issuance to Phoenix Chemical Company of 100,000
shares of Fairmounts common stock in cancellation of current
debt to Phoenix.
|    
|    
|    
|    
|10.2 |  | Amendment No. 11, dated December 17, 1987, to the Statement on
Schedule 13D, previously filed by Phoenix Chemical Company and
Phoenix Chemical Corporation with the Securities and Exchange
Commission on March 19, 1982 and April 9, 1982, respectively, and
the American Stock Exchange on March 22, 1982 and April 12, 1982,
respectively, with respect to Fairmounts issuance to Phoenix
Chemical Company of 133,334 shares of Fairmounts common stock in
cancellation of current debt to Phoenix.     
|    
|    
|    
|    
|10.3 |  | Amendment No. 12, dated July 7, 1988, to the Statement on Schedule
13D, previously filed by Phoenix Chemical Company and Phoenix
Chemical Corporation with the Securities and Exchange Commission on
March 19, 1982, and April 9, 1982, respectively, and the American
Stock Exchange on March 22, 1982 and April 12, 1982, respectively,
with respect to Fairmounts issuance to Phoenix Chemical Company of
1,000,000 shares of Fairmounts common stock in cancellation of
current debt to Phoenix.       
|    
|    
|    
|    
|10.4 |  | Amendment No. 13, dated August 7, 1989 to the Statement on Schedule
13D, previously filed by Phoenix Chemical Company and Phoenix
Chemical Corporation with the Securities and Exchange Commission on
March 19, 1982 and April 9, 1982, respectively, and the American
Stock Exchange on March 22, 1982, and April 12, 1982, respectively,
with respect to Fairmounts issuance to Phoenix Chemical Company of
1,000,000 shares of Fairmounts common stock in cancellation of
current debt to Phoenix.      
|    
|    
|    
|    
|10.5 |  | Amendment No. 14, dated May 23, 1990, to the Statement on Schedule
13D, previously filed by Phoenix Chemical Company and Phoenix
Chemical Corporation with the Securities and Exchange Commission on
March 19, 1982 and April 9, 1982, respectively, and the American
Stock Exchange on March 22, 1982 and April 12, 1982, respectively,
with respect to Fairmounts issuance to Phoenix Chemical Company of
1,500,000 shares of Fairmounts common stock in cancellation of
current debt to Phoenix.        
|    
|    
|    
|    
|10.6 |  | Amendment No. 15, dated December 5, 1990, to the Statement on
Schedule 13D, previously filed by Phoenix Chemical Company and
Phoenix Chemical Corporation with the Securities and Exchange
Commission on March 19, 1982 and April 9, 1982, respectively, and
the American Stock Exchange on March 22, 1982 and April 12, 1982,
respectively, with respect to Fairmounts issuance to Phoenix
Chemical Company of 1,000,000 shares of Fairmounts common stock in
cancellation of current debt to Phoenix.    
|    
|    
|    
|    
|10.7 |  | Statement on Schedule 13D, dated April 6, 1992, previously filed by
William E. Leistner with the Securities and Exchange Commission on
April 15, 1992 with respect to the liquidation and winding up of
Phoenix Chemical Company and the distribution of 3,789, 200 shares
of Fairmounts common                                                                                                                                                                                                             

15



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##### Table of Contents



|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|     
|     
|     
|      |  | stock to Leistner, who was a 60% partner in Phoenix, as the result
of such liquidation is incorporated into Part III.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     
|     
|     
|     
|10.8  |  | Statement on Schedule 13D, dated April 6, 1992, previously filed by
the Estate of Olga H. Knoepke, with the Securities and Exchange
Commission on May 4, 1992, with respect to liquidation and winding
up of Phoenix Chemical Company and the distribution of 2,526,134
shares to the Estate of Olga H. Knoepke, who was a 40% partner in
Phoenix, as the result of such liquidation is incorporated into Part
III.                                                                                                                                                                                                                                                                                            
|     
|     
|     
|     
|10.9  |  | Statement on Schedule 13D, dated September 19, 1993,previously filed
by the Estate of William E. Leistner with Securities and Exchange
Commission on March 30, 1994 with respect to the Estate of William
E. Leistner acquiring direct beneficial ownership of William E.
Leistners shares of Common Stock and 5,400,000 shares of Preferred
Stock of Fairmount Chemical Co., Inc. upon his death on September
19, 1993 is incorporated into Part III.                                                                                                                                                                                                                                                        
|     
|     
|     
|     
|10.10 |  | Amendment No. 1, dated December 28, 1992, to the Statement on
Schedule 13D, previously filed by William E. Leistner with the
Securities and Exchange Commission on April 14, 1992, with
respect to Fairmounts issuance to Leistner of 1,000,000 shares
of Fairmounts Common Stock in cancellation of current debt to
Leistner is incorporated into Part III.                                                                                                                                                                                                                                                                                                                                                 
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|10.11 |  | Form 8-K of the Company, previously filed September 10, 1987, with
respect to Issuers issuance to Phoenix Chemical Company of 100,000
shares of Fairmounts common stock in cancellation of current debt
to Phoenix.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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|10.12 |  | Incentive Stock Option Plan, incorporated by reference to
Fairmounts Definitive Proxy Statement for its Annual Meeting of
Stockholders held April 19, 1983 (Exhibit A), and amendment thereto,
incorporated by reference from the Fairmounts Definitive Proxy
Statement for its Annual Meeting of Stockholders held May 15, 1985
(Exhibit A); Incentive Stock Option Plan, as amended in 1988,
incorporated by reference from Fairmounts Form 10-K for the fiscal
year ending December 31, 1988 (Exhibit 10); and amendment to
Incentive Stock Option Plan in 1991, incorporated by reference to
Fairmounts Definitive Proxy Statement for its Annual Meeting of
Stockholders held May 6, 1991 (Exhibit A).
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|10.13 |  | Employment agreement by and between Reidar Halle Ph.D. and Fairmount
Chemical Co., Inc. incorporated by reference from Fairmounts Form
10-QSB for the quarter year ending June 30, 1998. (Exhibit 10).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|27.1  |  | Financial Data Schedule                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



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|(b) |  | No reports have been filed on Form 8-K during the quarter ended March
31,2000.
|--- |  | ------------------------------------------------------------------------------

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##### Table of Contents



FAIRMOUNT CHEMICAL CO., INC.

SIGNATURE

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.



| | FAIRMOUNT CHEMICAL CO., INC.
      Registrant
| | ---------------------------------------------

|                  |  |                                                                   
|----------------- |  | ------------------------------------------------------------------
|May 15, 2000
Date |  | S/Reidar Halle
Reidar T. Halle
Chief Executive Officer &
President
|                 
|May 15, 2000
Date |  | S/William C. Kaltnecker
William C. Kaltnecker
Controller          

17