SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549

                                   FORM 10-K

                 Annual Report Pursuant to Section 13 or 15(d)

                     of the Securities Exchange Act of 1934

                  For the Fiscal year ended December 31, 1999

                          Commission File No. 01-21617

                            THE QUIGLEY CORPORATION
                            -----------------------
             (Exact name of registrant as specified in its charter)


         Nevada                                            23-2577138
         ------                                            ----------
 (State or other jurisdiction                            (IRS Employer
of incorporation or organization)                     Identification Number)

             (MAILING ADDRESS: PO Box 1349, Doylestown, PA 18901.)

          Kells Building, 621 Shady Retreat Road, Doylestown, PA 18901
          ------------------------------------------------------------

              (Address of principle executive offices)         (Zip Code)

                                 (215) 345-0919
                                 --------------
              (Registrant's telephone number, including area code)

      Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:
          COMMON STOCK ($.0005 Par Value) COMMON SHARE PURCHASE RIGHTS

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.

[X] Yes [ ] No

Indicate by the check mark if there is no disclosure  of  delinquent  filers in
response  to  Item  405 of  Regulation  S-X  contained  in  this  form,  and no
disclosure  will be  contained,  to the  best  of  registrant's  knowledge,  in
definitive  proxy or information  statements  incorporated by reference in Part
III of this Form 10-K or any amendments to this Form 10-K.

[X]

As of March 15, 2000,  the  aggregate  market value of the voting stock (all of
one  class  $.0005  par  value  Common  Stock)  held by  non-affiliates  of the
Registrant was $21,009,954  based upon the closing price of the Common Stock on
that date as reported on the NASDAQ National Market.

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

Number of shares of each of the Registrant's  classes of securities (all of one
class of  $.0005  par  value  Common  Stock)  outstanding  on March  15,  2000:
10,349,731.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  following  documents  are  incorporated  by  reference in this
Report on Form 10-K:

1.  Information  set  forth  in Part  III of this  report  is  incorporated  by
reference to the  Registrant's  Proxy  Statement for the 2000 Annual Meeting of
Stockholders.

                  THE EXHIBIT INDEX IS LOCATED ON PAGES 16-17.

                                  Page 1 of 20


<PAGE>

                               TABLE OF CONTENTS

Part I                                                          Page
                                                                ----

Item 1. Description of Business                                 3 - 6

2. Description of Properties                                    6

3. Legal Proceedings                                            6 - 7

4. Submission of Matters to a Vote by Security Holders          7

Part II

5. Market for the Company's Common Equity and Related
   Stockholder Matters                                          7 - 8

6. Selected Financial Data                                      9

7. Management's Discussion and Analysis of Results of
   Operations and Financial Condition                           10 - 13

8. Financial Statements                                         14

9. Change in and  Disagreements  with  Accountants  on
   Accounting and Financial Disclosure                          15

Part III

10. Directors and Executive Officers of the Registrant          15

11. Executive Compensation                                      15

12. Security Ownership of Certain Beneficial
     Owners and Management                                      15

13. Certain Relationships and Related Transactions              15


Part IV

14. Exhibits, Financial Statement Schedules and
    Reports on Form 8-K                                         16 - 20




                                      -2-

<PAGE>


Forward-Looking Statements
--------------------------

In  addition  to   historical   information,   this  Annual   Report   contains
forward-looking  statements.  These  forward-looking  statements are subject to
certain  risks and  uncertainties  that could  cause  actual  results to differ
materially from those reflected in these  forward-looking  statements.  Factors
that might cause such a difference include,  but are not limited to, management
of growth,  competition,  pricing pressures on the Company's product,  industry
growth and general  economic  conditions.  Readers are  cautioned  not to place
undue reliance on these forward-looking statements,  which reflect management's
opinions  only as of the date hereof.  The Company  undertakes no obligation to
revise or publicly release the results of any revision to these forward-looking
statements. Readers should carefully review the risk factors described in other
documents the Company files from time to time with the  Securities and Exchange
Commission  including Quarterly Reports on Form 10-Q to be filed by the Company
in fiscal year 2000.

                                     PART 1
                                     ------

ITEM 1. DESCRIPTION OF BUSINESS
        -----------------------

Business Development
--------------------

The Quigley Corporation  (hereinafter referred to as the "Company") is a Nevada
corporation  which was  organized  on August 24,  1989 and  commenced  business
operations in October 1989.

The Company's  current primary  business is the manufacture and distribution of
the  Cold-Eeze(R)  and  Bodymate(TM)  products  to  the  consumer  through  the
over-the-counter market place. Cold-Eeze(R) is a zinc gluconate glycine lozenge
proven in two double-blind clinical studies to reduce the duration and severity
of the common cold symptoms by nearly half.  Cold-Eeze(R) is now an established
product in the health care and cold remedy  market.  Bodymate(TM)  is a dietary
supplement and weight management  program competing in the nutrition and weight
management marketplace.

Description of Business Operations
----------------------------------

Since its inception,  the Company has conducted  research and development  into
various types of health-related food supplements and homeopathic cold remedies.
Prior to the three  months ended  December  31,  1996,  the Company had minimal
revenues  from  operations  and as a result  suffered  continued  losses due to
research and  development  and  operations  expenses.  However,  the  Company's
product line has been  developed,  and during the year ended December 31, 1997,
significant  revenues  materialized  from its  national  marketing  program and
increased public awareness of the Cold-Eeze(R) lozenge product.

The Company's  initial business was the marketing and distribution of a line of
nutritious health supplements  (hereinafter  "Nutri-Bars").  Beginning in 1995,
the Company  minimized its marketing of the  Nutri-Bars and focused its efforts
on the development and marketing of the Company's  patented  Cold-Eeze(R)  zinc
gluconate glycine cold relief lozenge product.

Since June 1996, the Company has  concentrated  its business  operations on the
manufacturing,  marketing and development of its proprietary  Cold-Eeze(R)  and
Cold-Eezer  Plus  cold-remedy  lozenge  products and on  development of various
product extensions. The Company's lozenge products are based upon a proprietary
zinc gluconate glycine formula,  which in two double-blind clinical studies has
shown to reduce the  duration  and  severity of the common cold  symptoms.  The
Quigley Corporation acquired worldwide manufacturing and distribution rights to
this formulation in 1992 and commenced  national  marketing in 1996. By the end
of 1998, Bodymate(TM),  a new product line, was launched to enter the nutrition
and weight management program industry.

                                      -3-

<PAGE>

Products
--------

Cold-Eeze(R),  a zinc  gluconate  glycine  formulation  (ZIGG(TM)),  is sold in
lozenge,  bubble gum and  sugar-free  tablet  forms.  In May 1992,  the Company
entered   into   an   exclusive   agreement   for   worldwide   representation,
manufacturing,  marketing and distribution  rights to a zinc gluconate  glycine
lozenge  formulation  which was patented in the United States,  United Kingdom,
Sweden,  France, Italy, Canada,  Germany, and pending in Japan. This product is
presently  being marketed by the Company and also through  independent  brokers
and  marketers  in the  United  States  under  the  trade  names  Cold-Eeze(R),
Cold-Eeze(R)  Sugar Free, and  Cold-Eeze(R)  Bubble Gum and in Canada under the
trade name Zigg-Eeze(TM).

In 1996, the Company also acquired an exclusive license to a zinc gluconate use
patent,  thereby  assuring the Company  exclusivity  in the  manufacturing  and
marketing of zinc gluconate glycine lozenge formulated cold relief products.

Under a Food and Drug Administration ("FDA") approved  Investigational New Drug
Application,   filed  by   Dartmouth   College,   a   randomized   double-blind
placebo-controlled  study,  conducted  at  Dartmouth  College  Health  Science,
Hanover,  New  Hampshire,  concluded  that the lozenge  formulation  treatment,
initiated within 48 hours of symptom onset, resulted in a significant reduction
in the total duration of the common cold.

On May 22, 1992,  ZINC AND THE COMMON COLD, A CONTROLLED  CLINICAL  STUDY,  was
published  in England,  in the  "Journal of  International  Medical  Research",
Volume  20,  Number  3,  Pages  234-246.  According  to this  publication,  (a)
flavorings used in other Zinc lozenge products  (citrate,  tartrate,  separate,
orotate,  picolinate,  mannitol  or  sorbitol)  render  the Zinc  inactive  and
unavailable  to the  patient's  nasal  passages,  mouth and throat,  where cold
symptoms  have to be treated,  (b) this patented  pleasant-tasting  formulation
delivers  approximately  93% of the active Zinc to the mucosal surfaces and (c)
the patient has the same  sequence of symptoms as in the absence of  treatment,
but goes through the phases at an  accelerated  rate and with  reduced  symptom
severity.

On July 15, 1996, results of a new randomized  double-blind  placebo-controlled
study on the common  cold were  published,  which  commenced  at the  Cleveland
Clinic Foundation on October 3, 1994. The study called "Zinc Gluconate Lozenges
for  Treating  the Common Cold" was  completed  and  published in the Annals of
Internal  Medicine - Vol.  125 No. 2. Using a 13.3mg  lozenge  (almost half the
strength of the lozenge used in the Dartmouth Study), the result still showed a
42% reduction in the duration of the common cold symptoms.

At the  very  end of 1998,  the  first  product  of the  Bodymate(TM)  line was
launched  in a test  market  to  enter  the  nutrition  and  weight  management
industry.  The  unique  proprietary  delivery  system and  naturalness  of this
product,  with the main ingredients of Garcinia  Cambogia and chromium,  offers
instant  satisfaction and  gratification to those attempting to lose weight. It
is believed that the ingredients in this product may block an enzyme  necessary
for the formation of fats from carbohydrates, and affects the appetite to bring
about a feeling of fullness.

Patents, Trademarks, Royalty and Commission Agreements
------------------------------------------------------

The Company currently owns no patents. However, the Company has been granted an
exclusive agreement for worldwide representation,  manufacturing, marketing and
distribution rights to a zinc gluconate glycine lozenge formulation,  which are
patented as follows:

 United States:  No. 4 684 528 (August 4, 1987)
                 No. 4 758 439 (July 19, 1988)

       Germany:  No. 3,587,766 (March 2, 1994)

France & Italy:  No. EP 0 183 840 B1 (March 2, 1994)

        Sweden:  No. 0 183 840 (March 2, 1994)

        Canada:  No. 1 243 952 (November 1, 1988)

 Great Britain:  No. 2 179 536 (December 21, 1988)

         Japan:  Pending


In 1996,  the Company also  acquired an exclusive  license for a United  States
zinc  gluconate  use patent number RI 33,465 from the patent  holder.  This use
patent  gives the  Company  exclusive  rights  to both the use and  formulation
patents on zinc  gluconate for reducing the duration and severity of the common
cold symptoms.

                                      -4-

<PAGE>

The  Cold-Eeze(R)  product  is  manufactured  for  the  Company  by a  contract
manufacturer  and  marketed  by the Company in  accordance  with the terms of a
licensing  agreement  (between the Company and the developer).  The contract is
assignable by the Company with the developer's consent. Throughout the duration
of the  agreement  the  developer is to receive a three percent (3%) royalty on
sales  collected,  less certain  deductions.  A separate  consulting  agreement
between the parties  referred to directly  above was similarly  entered into on
May 4,  1992,  whereby  the  developer  is to receive a  consulting  fee of two
percent  (2%) on sales  collected,  less  certain  deductions,  for  consulting
services to the Company with respect to such product.

Pursuant  to the License  Agreement  entered  into  between the Company and the
patent  holder,  the Company  pays a royalty fee to the patent  holder of three
percent (3%) on sales collected, less certain deductions.

During 1997, the Company instituted a trademark for the major components of its
lozenge,  ZIGG(TM) (denoting zinc gluconate glycine), to set Cold-Eeze(R) apart
from the imitations proliferating the marketplace.

An  agreement  between the Company and the founders was entered into on June 1,
1995. The founders,  in  consideration  of the acquisition of the  Cold-Eeze(R)
cold therapy  product,  are to receive a total commission of five percent (5%),
on sales  collected,  less certain  deductions  until the  termination  of said
agreement on May 31, 2005.

Product Distribution and Customers
----------------------------------

The Company has several Broker, Distributor and Representative Agreements, both
Nationally   and   Internationally,    which   are   sales   performance-based.
Additionally, prior to 1998, the Company issued incentive common stock purchase
options to its Brokers, Distributors and Representatives.

The Cold-Eeze(R)  lozenge products are distributed through numerous independent
and chain drug and discount stores throughout the United States,  including the
Walgreen  Company,   Bindley-Western  Drug  Company,  Revco,  Albertsons,  CVS,
Rite-Aid,  Eckerd Drug Company,  Phar-Mor Inc.,  Wal-Mart,  Target,  The Kroger
Company, Safeway Inc., SAM'S Club, BJ's Wholesale Club, Costco Wholesale,  Drug
Emporium,  K-Mart Corporation,  and wholesale  distributors  including McKesson
Drug  Company,  Bergen  Brunswig  Drug  Company,  US Health  Distributors,  and
AmeriSource.

The  Company is not  dependent  on any single  customer  as the broad  range of
customers includes many large wholesalers, mass merchandisers, and multi-outlet
pharmacy  chains,  five of which account for a significant  percentage of sales
volume.  The top five represent 39%, 38% and 68% of sales revenue for the years
ended December 31, 1999, 1998 and 1997, respectively.

Research and Development
------------------------

The Company's  research and development  costs for the years ended December 31,
1999, 1998 and 1997, were $297,650 $256,492, and $79,784, respectively.  Future
research  and  development  expenditures  are  anticipated  in order to develop
extensions  of the  Cold-Eeze(R)  product,  including  potential  unrelated new
products in the consumer health care industry,  that are primarily supported by
clinical studies,  for efficacious  long-term products that can be coupled with
possible line extensions derivatives for a family of products.

Regulatory Matters
------------------

The  business  of the  Company  is  subject  to  federal  and  state  laws  and
regulations  adopted  for the  health  and  safety  of users  of the  Company's
products.  The Company's Cold-Eeze(R) product is a homeopathic remedy, which is
subject to regulation by various federal,  state and local agencies,  including
the  FDA  and  the  Homeopathic  Pharmacopoeia  of  the  United  States.  These
regulatory  authorities  have  broad  powers,  and the  Company  is  subject to
regulatory  and  legislative  changes  that can  affect  the  economics  of the
industry by requiring  changes in operating  practices  or by  influencing  the
demand for, and the costs of, providing its products.  Management believes that
the Company is in  compliance  with all such laws,  regulations  and  standards
currently in effect  including the Food, Drug and Cosmetics Act of 1938 and the
Homeopathic  Pharmacopoeia Regulatory Service. Although it is possible that our
future results of operations  could be materially  affected by the future costs
of  compliance,  we  believe  that the  future  costs  will not have a material
adverse effect on our financial position or on our competitive position.

                                      -5-
<PAGE>

Competition
-----------

The Company competes with other suppliers of cold remedy,  nutrition and weight
management  products.  These  suppliers  range  widely  in  size.  Some  of the
Company's  competitors  have  significantly  greater  financial,  technical  or
marketing resources than the Company. Management believes that its Cold-Eeze(R)
product, which has been clinically proven in two double-blind studies to reduce
the  severity and duration of the common cold  symptoms,  offers a  significant
advantage  over many of its  competitors  in the  over-the-counter  cold remedy
market.  Bodymate(TM) at this time, has the same competition challenges to gain
acceptance  by the consumer.  The Company  believes that its ability to compete
depends on a number of factors, including price, product quality,  availability
and reliability,  credit terms, name  recognition,  delivery time and post-sale
service and support.

Employees
---------

At December 31, 1999 the Company had 15 full-time  employees,  all of whom were
involved in an executive,  marketing or  administrative  capacity.  None of the
Company's  employees are covered by a collective  bargaining  agreement or is a
member of a union.

Suppliers
---------

The Company currently uses three separate suppliers to produce  Cold-Eeze(R) in
lozenge,  bubble gum, and sugar-free tablet form. The Cold-Eeze(R)  lozenge and
Bodymate(TM)  products  are  manufactured  by a third party  manufacturer  that
produces exclusively for the Company.  Should these relationships  terminate or
discontinue  for any reason,  the Company has  formulated  a  contingency  plan
necessary in order to prevent such discontinuance from materially affecting the
Company's  operations  with the  exception  of  bubble  gum,  which  cannot  be
duplicated.  Any such termination may, however,  result in a temporary delay in
production  until  the  replacement  facility  is able to  meet  the  Company's
production requirements.

Raw  materials  used in the  production  of the  products  are  available  from
numerous sources. Currently, it is being procured from a single vendor in order
to secure  purchasing  economies.  In a situation  where this one vendor is not
able to supply the contract  manufacturer  with the ingredients,  other sources
have been identified.

ITEM 2. DESCRIPTION OF PROPERTY
        -----------------------

During November 1999 the Company moved to its new executive  office building at
621  Shady  Retreat  Road,   Doylestown.   This  property,   with  an  area  of
approximately   13,000  square  feet,   was  purchased  in  November  1998  and
refurbished  during 1999. The total cost of acquisition  and  refurbishment  to
date has been approximately $1.6 million.  The Company occupies warehouse space
in Las Vegas,  Nevada. This Nevada location has a three-year lease that expires
in July  2000.  The  Company  also  stores  its  product  in  three  additional
warehouses in  Pennsylvania  with storage  charges based upon the quantities of
product being stored.  The monthly  aggregate  lease  payments are $2,129,  the
charge  being  reduced  over prior years due to the  discontinuance  of the New
Britain warehouse lease and the relocation from the leased Landmark Building to
the Company-owned executive offices at Shady Retreat Road. The Company believes
that its existing warehousing facilities are adequate.

ITEM 3. LEGAL PROCEEDINGS
        -----------------

                               Goldblum and Wayne

In March,  1997, the Company was sued by two individuals  (Thomas  Goldblum and
Alan Wayne) in the Court of Common Pleas of  Montgomery  County,  Pennsylvania.
The complaint  alleges that the Plaintiffs  became the owners of 500,000 shares
each of the Company's  Common Stock in or about 1990,  and requests  damages in
excess of $100,000  for breach of contract  and  conversion.  During the second
quarter  of 1999,  the  Company  was made aware  that the  Plaintiffs  took the
position that the Company's 1990 pre-public 1 for 2.74 reverse split and 1995 1
for 10 reverse split did not apply to the shares  claimed by them.  The Company
is  vigorously  defending  this  lawsuit  and has denied any  liability  to the
Plaintiffs  because they did not perform agreed upon services as a condition to
the receipt of the shares from the Company.  The Company also believes that the
Plaintiffs'  claims are barred by the applicable  statutes of limitations,  and
that  the  Plaintiffs'  claims  are,  in  any  event,  limited  to  claims  for
approximately  36,000 shares each. Although the Company believes the Plaintiffs
claim to be without  merit,  the case is still in the  discovery  stages and no
prediction can be made as to its outcome.


                                      -6-
<PAGE>


                             Marjorie Durst

In October 1999, the Company reached a settlement in a lawsuit by an individual
named  Marjorie  Durst that resolved all matters  between the Plaintiff and the
Company.  This  legal  proceeding  was  previously  reported  in the  Company's
Quarterly  Report  on Form  10-Q  for the  quarter  ended  June 30,  1999.  The
resolution of this dispute is not material to the Company's financial position,
results of operations or liquidity.

In  addition  to the  foregoing  litigation,  the  Company  is subject to legal
proceedings  and  claims  which  have  arisen  in the  ordinary  course  of its
business.  Although there can be no assurance as to the ultimate disposition of
these  matters,  it is the opinion of the Company's  management  based upon the
information available at this time, that the expected outcome of these matters,
individually  or in the aggregate,  will not have a material  adverse effect on
the financial position, results of operations or cash flows of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        ---------------------------------------------------

A Special  Meeting of  Stockholders of the Company was held on October 15, 1999
with  10,337,820  shares eligible to vote. The presence of a quorum was reached
and the following proposal was approved by the stockholders:

To (a) ratify all actions previously taken by officers, directors and agents of
the  Company  relating  to: (i) the 1 for 2.74  reverse  split of shares of its
Common  Stock  effected by the Company  between  June 1990 and August 1991 (the
"1990 Reverse Split"),  (ii) the 1 for 10 reverse split of shares of its Common
Stock  effected by the Company on January 11, 1996 (the "1996 Reverse  Split"),
and (iii) the 2 for 1 forward  split of shares of its Common Stock  effected by
the Company on January 23, 1997 (the "1997 Forward Split");  and (b) approve an
amendment to Article IV of the Company's Articles of Incorporation required to,
among other things,  complete and memorialize the 1990 Reverse Split,  the 1996
Reverse Split and the 1997 Forward Split.

The  votes were cast as follows:         For           5,572,850
                                         Against         106,529
                                         Abstentions      54,207


                                    PART II
                                   --------

ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
        ------------------------------------------------------------------

Market Information
------------------

The Company's Common Stock, $.0005 par value, is currently traded on the NASDAQ
National  Market under the trading  symbol  "QGLY".  The price set forth in the
following  table  represents  the high and low sale  prices  for the  Company's
common stock.

                                        Common Stock
                                        ------------

                             1999                         1998
                    ----------- -----------     ------------ --------------
 Quarter Ended         High        Low             High           Low

 March 31             $6.875      $4.906          $16.438       $9.500
 June 30              $5.250      $4.688          $13.250       $6.250
 September 30         $5.938      $2.906          $9.750        $6.625
 December 31          $3.969      $1.563          $7.750        $4.938


                                      -7-

<PAGE>


From July 1997 to May 1998, the Company's  securities were traded on the NASDAQ
SmallCap  Market.  Since May 1998,  the Company's  securities are traded on the
NASDAQ  National  Market and  consequently  stock prices are available daily as
generated by the National Market established quotation system.

Holders
-------

As of December 31, 1999, there were  approximately 368 holders of record of the
Company's  Common Stock,  including  brokerage firms,  clearing houses,  and/or
depository firms holding the Company's securities for their respective clients.
The exact number of beneficial owners of the Company's  securities is not known
but would necessarily exceed the number of record owners indicated above.

Dividends
---------

The Company has never  declared,  nor has it paid,  any cash  dividends  on its
Common  Stock.  At this time the  Company  intends  to retain its  earnings  to
finance  future  growth,  and as a result does not  anticipate  paying any cash
dividends on its Common Stock in the immediate future.

Warrants and Options
--------------------

In addition to the Company's aforesaid  outstanding Common Stock, there are, as
of December 31, 1999, issued and outstanding Common Stock Purchase Warrants and
Options which are exercisable at the  price-per-share  stated and expire on the
date indicated, as follows:

Description          Number       Exercise Price         Expiration Date
                 -----------      --------------        -----------------
CLASS "D"            590,000           $0.500           December 14, 2000
CLASS "E"          1,150,000           $1.750               June 30, 2001
CLASS "F"            225,000           $2.500            November 4, 2001
CLASS "G"            945,000          $10.000                 May 5, 2002
Warrants             409,900           $1.750          September 30, 2001
Option Plan          550,500           $9.680            December 1, 2007
Option Plan          409,000           $5.125               April 6, 2009







                                      -8-

<PAGE>



ITEM 6. SELECTED FINANCIAL DATA
        -----------------------

The Company  changed its fiscal  year-end  from  September 30 to December 31 on
January 2, 1997. The following table sets forth the selected  financial data of
the Company for, and at the end of (i) the years ended  September  30, 1995 and
1996,  (ii) the three months ended  December 31, 1996 and (iii) the years ended
December 31, 1997, 1998 and 1999.

The data  presented  below  should be read in  conjunction  with  "Management's
Discussion and Analysis of Financial  Condition and Results of Operations"  and
the  Company's  financial  statements  and notes  thereto  appearing  elsewhere
herein.


<TABLE>
<CAPTION>



(Amounts in thousands, except                                                             Three Months
    per share data)                              Year Ended   Year Ended    Year Ended    Year Ended     Year Ended     Year Ended
                                                December 31,  December 31,  December 31,  December 31, September 30,  September 30,
                                                   1999         1998          1997           1996           1996           1995
                                                ------------  ------------  ------------  -----------  -------------  --------------
<S>                                             <C>           <C>           <C>           <C>          <C>             <C>
Statement of Income Data:

Net Sales ...................................   $ 24,820      $ 36,354      $ 70,173      $  4,092     $  1,050        $    502
Gross Profit ................................     16,941        25,477        48,745         2,717          766             390
Net Income (Loss) ...........................     (4,204)        6,809        20,967         1,676         (694)           (153)

Basic earnings/(loss) per
    common share ............................   ($  0.37)     $   0.51      $   1.72      $   0.15    ($   0.08)      ($   0.02)
Diluted earnings/(loss) per
    common share.............................   ($  0.37)     $   0.46      $   1.43      $   0.12    ($   0.08)      ($   0.02)
Weighted average common
    shares outstanding:
Basic .......................................     11,352        13,335        12,181        11,087       8,131            6,723
Diluted .....................................     11,352        14,944        14,634        13,611       8,131            6,723


                                                   As of         As of         As of         As of          As of          As of
                                                December 31,  December 31,  December 31,  December 31,  September 30,  September 30,
                                                   1999         1998          1997           1996           1996           1995
                                                ------------  ------------  ------------  -----------  -------------  --------------
Balance Sheet Data:

Working capital .............................   $ 23,621      $ 43,024      $ 41,141      $  5,206     $    911        $    287
Total assets ................................     33,271        48,611        49,847         6,950        1,368             437
Stockholders' equity ........................     26,216        44,607        41,748         5,544        1,243             299


</TABLE>



                                      -9-

<PAGE>

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

Overview
--------

During  1999,  the Company  continued  to  manufacture,  market and promote its
Cold-Eeze(R) and Bodymate(TM)  products through numerous  independent and chain
drug and discount  stores  throughout  the United  States.  In 1998 the Company
commenced selling  internationally  and is continuously  looking for additional
opportunities. Toward the end of 1998 the Company launched Cold-Eeze(R) in both
the sugar-free and bubble gum form along with Bodymate(TM), a weight management
program. The Cold-Eeze(R) sugar-free form is especially beneficial to diabetics
and other consumers concerned with their sugar intake. Currently,  Cold-Eeze(R)
is the only zinc  gluconate  glycine  product  clinically  proven to reduce the
severity and duration of the common cold symptoms,  the efficacy of the product
having been  established  following the  publication  of a second  double-blind
study in July 1996. The Company continued  supplying  international  markets in
1999,  with sales to the Peoples  Republic of China and Israel.  The demand for
the product is seasonal,  with the third and fourth  quarters of 1999 providing
the largest sales volume,  with the first quarter  having  experienced a longer
than usual selling season.

The 1999 sales revenue was $24,819,942  compared to $36,354,155 and $70,172,563
for 1998 and 1997, respectively.  The decrease in sales in 1999 is attributable
to increased  competition  with the addition of herbal and zinc  remedies  that
have not been clinically  proven to counteract the symptoms of the common cold.
Some unproven zinc products were  discontinued  in 1999  resulting in clearance
selling at severely  discounted  prices.  This increased activity and incessant
marketing  resulted in consumer  confusion  with the  distinction  between what
products  claim  they can  achieve  and what they have been  proven to  achieve
becoming unclear.  Additionally,  during 1999, Cold-Eeze(R) has been subject to
various inaccurate media reports appearing to discredit its proven efficacy. In
common with other markets,  1999 experienced  increased  consolidation  between
retail chains resulting in reduced pipeline inventories and subsequent reorders
of  Cold-Eeze(R).  The Company  increased  its  advertising  effort in order to
clarify and establish  Cold-Eeze(R) as a branded cold remedy  clinically proven
to significantly reduce the duration and severity of the common cold symptoms.

The  Company  continues  to use  the  resources  of  independent  national  and
international brokers to represent the Company's  Cold-Eeze(R) and Bodymate(TM)
products,  thereby  saving  capital and other ongoing  expenditures  that would
otherwise be incurred.

Manufacturing  of the products is currently being carried out at three separate
independent  locations,   with  different  manufacturers  being  used  for  the
Cold-Eeze(R)  bubble  gum and  sugarfree  products  and the  same  manufacturer
producing the Cold-Eeze(R)  lozenge and the  Bodymate(TM)  Nutrition and Weight
Management  Program.  The  lozenge  and  Bodymate(TM)   manufacturer  commenced
manufacturing  exclusively for the Company in 1997,  thereby  increasing  their
output and the  availability  of the product and, as a result,  eliminating the
occurrence of backorders.  All three  manufacturing  sites have the capacity to
respond quickly to market requirements.

The change in  manufacturing  availability  allowed  the  Company  to  commence
selling  internationally  in 1998.  In February  1998,  the Company  reached an
agreement  with  GenPharm,  Inc., a  wholly-owned  subsidiary  of Merck KGaA of
Germany for exclusive  distribution of Cold-Eeze(R) in the Canadian market.  In
December 1998, the Company reached an agreement with a Hong Kong-based  Chinese
distribution  company for the exclusive  distribution  of  Cold-Eeze(R)  in the
Peoples  Republic of China.  This  exclusivity  is  predicated on minimum sales
levels being met each year,  that in total must reach at least $52 million over
the 7-year life of the agreement.  Future revenues,  costs, margins and profits
will  continue  to be  influenced  by the  Company's  ability to  maintain  its
manufacturing  availability  and  capacity  together  with  its  marketing  and
distribution  capabilities  in order to continue  to compete on a national  and
international level.

                                     -10-
<PAGE>


Results of Operations
---------------------

Twelve months ended December 1999 compared with same period 1998
----------------------------------------------------------------

For the year ended  December 31, 1999,  the Company had revenues of $24,819,942
and a net loss of  ($4,203,785),  compared to revenues of  $36,354,155  and net
income of $6,809,526 for the comparable period in 1998. 1999 experienced a slow
down in sales for various reasons. During the course of the year a large number
of zinc  products  left the market  leading to the  lowering of prices by these
competitors,  resulting in these zinc  products  catching the  attention of the
consumer.  Additionally,  the  marketplace  experienced  the  influx  of herbal
remedies and nutritional supplements resulting in consumer confusion.  The high
inventory  levels that were being held by our customers  from  previous  years,
along with the consolidation of customers,  all reduced sales for the year. The
1999 results were  adversely  affected by the change in the  effective tax rate
from 39% to 31% due to the  provision  of a valuation  allowance  equaling  the
total deferred tax asset.

Cost of Goods Sold, as a percentage of sales in 1999,  was 31.7%,  up 1.8% from
the  1998  level  of  29.9%.  The  increase  in  1999  is  attributable  to the
contribution  to  sales  made  by  Bodymate(TM)  and  the  bubble  gum  form of
Cold-Eeze(R),  both of which carry a higher unit cost of goods percentage.  The
Cold-Eeze(R)  lozenge product  continues to be manufactured in an efficient and
cost effective manner, with this making up the majority of the sales activity.

Total  operating  costs for 1999 were  $23,928,313  compared to $15,762,598 for
1998. The main reason for the increase was the necessity to promote the unique,
proven  properties  of the  Cold-Eeze(R)  products  in light of the  influx  of
competing  new  products  into  the  marketplace.  This was  addressed  through
increased  radio and television  advertising  at  appropriate  times during the
year.  During  1999,  the  Company's  major  operating  expenses  of  delivery,
salaries,  brokerage  commissions,  promotion,  advertising,  and  legal  costs
accounted for approximately $21,368,130 (90%) of the total of $23,928,313.

Total assets of the Company at December 31, 1999 and 1998 were  $33,271,056 and
$48,610,644   respectively.   Working  capital   decreased  by  $19,403,816  to
$23,620,669  at  December  31,  1999.  The  main  factors  contributing  to the
reduction in these two  categories  were the cash expended in the repurchase of
Company stock to treasury totaling $14,788,193,  during the course of the year,
as reflected  in total  shareholders'  equity,  together  with losses  incurred
during the year, offset by the increase in current liabilities.

Twelve months ended December 31, 1998 compared with same period 1997
--------------------------------------------------------------------

The year ended December 31,1998 produced revenues of $36,354,155 and net income
of $6,809,526 compared to revenues of $70,172,563 and net income of $20,966,862
for the  comparable  period in 1997.  The reasons for the slow down in sales in
1998 included mild weather conditions which are reflected in lower incidence of
consumers'  colds  combined  with the  effect  of new  herbal  cold  treatments
promulgated  through national news media  announcements.  Additionally,  due to
greater output  availability at the manufacturing  site,  product lead-time was
reduced  from six or more weeks in 1997 to two weeks in 1998  resulting  in the
customer being able to order product closer to their needs.

Cost of Goods Sold,  as a percentage of net sales,  decreased by 0.6%,  down to
29.9%  in 1998  from  30.5%  in  1997.  The  reduction  in 1998  resulted  from
efficiencies  implemented  by the  manufacturer  in 1997 that  continued  to be
beneficial  in  1998  and  combined  with  effect  of a  change  in  accounting
estimates.  These gains were offset by a  repackaging  charge of  approximately
0.5% of net sales, higher cost margins for different product configurations and
international sales.

The year 1998 operating  expenses were  $15,762,598  compared to $13,798,827 in
the comparable  period of 1997. The increase over 1997 is primarily as a result
of  advertising  and  marketing  spending  to  further  establish  and grow the
product.  During 1998,  the  Company's  major  operating  expenses of delivery,
salaries,  brokerage  commissions,  promotion,  advertising,  and  legal  costs
accounted for approximately $13,805,588 (88%) of the total of $15,762,598.

                                      -11-


<PAGE>

The total assets of the Company at December 31, 1998 and 1997 were  $48,610,644
and  $49,847,090  respectively.  Working  capital  increased by  $1,883,938  to
$43,024,485 at December 31, 1998. The significant movements in these categories
represent a slowdown  in sales in 1998,  the  reduction  in the  components  of
current  liabilities and changes in funds or paid-in-capital as a result of the
sale  or  exercise  of  the  Company's  Common  Stock,  options  and  warrants.
Additionally,  during the course of 1998, the Company repurchased a quantity of
the Company's Common Stock.

Twelve months ended December 31, 1997 compared with same period 1996
--------------------------------------------------------------------

For 1997,  the  Company  reported  revenues  of  $70,172,563  and net income of
$20,966,862, as compared with revenues of $4,993,496 and net income of $986,392
for the comparable period ended December 31, 1996. This substantial increase in
revenue is primarily  attributable to the market acceptance of the Cold-Eeze(R)
lozenge product.  The year 1997 saw  Cold-Eeze(R)  become a formidable force in
the  marketplace  as a unique remedy to reduce the severity and duration of the
common  cold  symptoms.  This  resulted  from the release of the results of The
Cleveland  Clinic  Study  in July  1996,  a  national  marketing  program  that
commenced in the fourth quarter of 1996 together with national  exposure in the
media, such as NBC's PrimeTime network national news program and "20/20" on ABC
in January 1997.  Sales in the transition  quarter ended December 31, 1996 were
$4,091,653.

Cost of Goods Sold, as a percentage of net sales,  decreased by 2.35%,  down to
30.5%  for  1997  from  32.85%  for  1996.  This  decrease  in cost of goods is
primarily  due  to  efficiencies  resulting  from  the  manufacturer  utilizing
improved equipment such as fully automated  production lines. In addition,  the
higher volume of production  brought  economies of scale resulting in the lower
purchase cost of raw materials and packaging, thereby, reducing the cost of the
finished product. During 1997, operating expenses increased to $13,798,827 from
$2,155,646 in the comparable  period 1996. This was a result of increased costs
associated with a national marketing and advertising program and other variable
costs associated with bringing the sales volume to the level achieved.

During 1997,  the Company's  major  operating  expenses of delivery,  salaries,
brokerage  commissions,  promotion,  advertising  and legal costs accounted for
approximately  $12,562,060  (93%)  of the  $13,798,827  total  operating  costs
incurred by the Company. Other operating costs for this period maintained their
fixed  attributes,  in that they did not follow sales  volume but  maintained a
relative  constant dollar value for 1997.  During 1996, these expenses amounted
to $1,826,651 (85%) of the total of $2,155,646.

Material Commitments and Significant Agreements
-----------------------------------------------

As a result of all of the  Company's  products  being  manufactured  by outside
sources,  any capital  expenditure  expected to be incurred  during 2000 is not
anticipated  to be  material.  The Company has  agreements  in place with these
manufacturers,  which insure a reliable  source of product for the future.  The
facility   producing  the   Cold-Eeze(R)   lozenge  and  the  Bodymate  product
manufactures exclusively for the Company.

The Company has agreements in place with independent  brokers whose function it
is to  represent  the  Company,  in a  product  sales and  promotion  capacity,
throughout the United States and  internationally.  The brokers are remunerated
through a commission structure,  based on a percentage of sales collected, less
certain deductions.

There are significant  royalty and commission  agreements  between the Company,
patent  holders and the developer of the Company's  cold-relief  products.  The
Company  has entered  into  royalty  agreements  with the patent  holders  that
require payments of 6% on sales collected,  less certain  deductions,  and with
the  founders  who share a commission  of 5% on sales  collected,  less certain
deductions. Additionally, the developer of the Cold-Eeze(R) product formulation
receives a consulting fee of 2% on sales collected, less certain deductions.

The agreements with the patent holder and the developer expire on March 5, 2002
and May 4, 2007, respectively and with the founders on May 31, 2005.

The  Company  has  committed  to  advertising  costs  approximating  $5,100,000
relating to 2000. Additional  advertising costs are expected to be incurred for
the remainder of 2000.

                                      -12-

<PAGE>

Liquidity and Capital Resources
-------------------------------

The Company had working  capital of $23,620,669 and $43,024,485 at December 31,
1999 and 1998, respectively. The decrease in working capital is due, primarily,
to the increase in the components of current liabilities together with the cash
used in the repurchase of Company Common stock during 1999. Total cash balances
at December 31, 1999 were  $13,990,475  as compared to  $28,331,765 at December
31, 1998.

The  Company  believes  that its  increased  marketing  efforts  and  increased
national  publicity  concerning  the  Cold-Eeze(R)   products,   the  Company's
increased manufacturing availability,  newly available products, further growth
in international sales together with its current working capital should provide
an internal  source of capital to fund the Company's  business  operations.  In
addition to anticipated funding from operations,  the Company may raise capital
through the issuance of equity securities to finance anticipated growth.

Throughout 1999 the Company  repurchased a total of 2,816,631  shares at a cost
of $14,788,193.

Management is not aware of any trends, events or uncertainties that have or are
reasonably  likely to have a material  negative  impact upon the  Company's (a)
short-term or long-term  liquidity,  or (b) net sales,  revenues or income from
continuing operations.  Any challenge to the Company's patent rights could have
a material  adverse  effect on future  liquidity of the Company;  however,  the
Company is not aware of any condition that would make such an event probable.

The  Company  has a revolving  line of credit  with a  commercial  bank for $10
million  to  be  used  for  general  corporate   purposes.   This  facility  is
collateralized  by accounts  receivable and inventory,  and renews in May 2000,
with  interest  accruing  at the  Prime  Rate,  or 225 basis  points  above the
Eurodollar  Rate,  each to move with the  respective  base rate.  There were no
borrowings under available lines during the twelve-month periods ended December
31, 1999 or 1998.


Impact of Inflation
-------------------

The Company is subject to normal  inflationary  trends and anticipates that any
increased costs should be passed on to its customers.


Year 2000 Compliance
--------------------

At this time no year 2000 issues have become  apparent  and  management  is not
currently aware of any items that would have a material impact on the Company's
results of operations and financial position.


                                      -13-

<PAGE>


ITEM 8  FINANCIAL STATEMENTS
        --------------------

INDEX TO FINANCIAL STATEMENTS                                   Page
                                                                ----

Balance Sheets as of December 31, 1999 and 1998                 F-1

Statements of Income for the years ended
   December 31, 1999, 1998 and 1997                             F-2

Statements of Stockholders' Equity for the years
   ended December 31, 1999, 1998, and 1997                      F-3

Statements of Cash Flows for the years ended
   December 31, 1999,  1998, and 1997                           F-4 to F-5

Notes to Financial Statements                                   F-6 to F-15

Responsibility for Financial Statements                         F-16

Report of Independent Accountants                               F-17





                                      -14-

<PAGE>


<TABLE>
<CAPTION>

                            THE QUIGLEY CORPORATION
                                 BALANCE SHEETS

                                    ASSETS          December 31,    December 31,
                                                        1999            1998
                                                    ------------   -------------
<S>                                                   <C>           <C>

CURRENT ASSETS:

Cash and cash equivalents .........................   $13,990,475   $28,331,765
Accounts  receivable (less doubtful
  accounts of $239,065 and $182,079) ..............     6,639,687     7,575,366
Inventory .........................................     6,170,005     6,522,612
Prepaid income taxes ..............................     2,485,247     2,565,321
Prepaid expenses and
   other current assets ...........................     1,390,702     1,635,099
Deferred income  taxes ............................          --         397,489
                                                      -----------   -----------
           TOTAL CURRENT ASSETS ...................    30,676,116    47,027,652
                                                      -----------   -----------

PROPERTY, PLANT AND EQUIPMENT - net ...............     1,943,313     1,041,386
                                                      -----------   -----------

OTHER ASSETS:

Patent rights - Less accumulated amortization......       197,463       285,224
Other assets ......................................       454,164       256,382
                                                      -----------   -----------
           TOTAL OTHER ASSETS .....................       651,627       541,606
                                                      -----------   -----------

TOTAL ASSETS ......................................   $33,271,056   $48,610,644
                                                      ===========   ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable ...............................     $    395,778  $    758,033
Accrued royalties and sales commissions ........        1,722,715     2,085,446
Accrued advertising ............................        4,523,901       561,266
Accrued freight ................................          104,263        37,082
Other current liabilities ......................          308,790       561,340
                                                     ------------   ------------
           TOTAL CURRENT LIABILITIES ...........        7,055,447     4,003,167
                                                     ------------   ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Common stock, $.0005 par value; authorized 50,000,000;
   Issued 14,831,384 and 14,409,058 shares......            7,415         7,205
Additional paid-in-capital .....................       28,807,108    28,207,208
Retained earnings ..............................       22,445,670    26,649,455
Less: Treasury stock, 4,481,653 and
   1,665,022 shares, at cost....................      (25,044,584)  (10,256,391)
                                                     ------------   ------------
           TOTAL STOCKHOLDERS' EQUITY ..........       26,215,609    44,607,477
                                                     ------------   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .....     $ 33,271,056  $ 48,610,644
                                                     ============   ============

</TABLE>

                 See accompanying notes to financial statements
                                      F-1


<PAGE>


<TABLE>
<CAPTION>

                            THE QUIGLEY CORPORATION
                              STATEMENTS OF INCOME

                                               Year Ended      Year Ended    Year Ended
                                              December 31,    December 31,  December 31,
                                                  1999            1998          1997
                                              ------------    -----------   ------------
<S>                                           <C>             <C>           <C>
NET SALES .................................   $ 24,819,942    $36,354,155   $ 70,172,563
                                              ------------    -----------   ------------

COST OF SALES .............................      7,879,303     10,877,594     21,427,888
                                              ------------    -----------   ------------


GROSS PROFIT ..............................     16,940,639     25,476,561     48,744,675
                                              ------------    -----------   ------------

OPERATING EXPENSES:

      Sales and marketing .................     17,938,002     10,476,030      7,741,428
      Administration ......................      5,990,311      5,286,568      6,057,399
                                              ------------    -----------   ------------
TOTAL OPERATING EXPENSES ..................     23,928,313     15,762,598     13,798,827
                                              ------------    -----------   ------------

INCOME (LOSS) FROM OPERATIONS .............     (6,987,674)     9,713,963     34,945,848

INTEREST INCOME ...........................        881,274      1,449,194        292,575
                                              ------------    -----------   ------------

INCOME (LOSS) BEFORE TAXES ................     (6,106,400)    11,163,157     35,238,423
                                              ------------    -----------   ------------

INCOME TAXES EXPENSE (BENEFIT) ............     (1,902,615)     4,353,631     14,271,561
                                              ------------    -----------   ------------

NET INCOME (LOSS) .........................   ($ 4,203,785)   $ 6,809,526   $ 20,966,862
                                              ============    ===========   ============

Earnings/(Loss) per common share:

      Basic ...............................   ($      0.37)   $      0.51   $       1.72
                                              ============    ===========   ============

      Diluted .............................   ($      0.37)   $      0.46   $       1.43
                                              ============    ===========   ============


Weighted average common shares outstanding:

      Basic ...............................     11,351,960     13,334,684     12,181,020
                                              ============    ===========   ============

      Diluted .............................     11,351,960     14,944,172     14,633,999
                                              ============    ===========   ============


</TABLE>

                 See accompanying notes to financial statements
                                      F-2


<PAGE>


<TABLE>
<CAPTION>

                            THE QUIGLEY CORPORATION

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                                 Common                       Additional                   Retained      Stockholders'
                                  Stock          Issued        Paid-in-     Treasury       Earnings      Subscription
                                 Shares          Amount        Capital       Stock        (Deficit)       Receivable        Total
                                ----------   ------------   ------------  ------------  -------------  ------------    ------------
<S>                             <C>          <C>            <C>           <C>            <C>            <C>            <C>

Balance January 1, 1997 ....    12,099,192   $      6,049   $  7,010,244                ($ 1,126,933)  ($   345,856)   $  5,543,504

Shares issued for services .        21,054             11        212,894                                                    212,905

Subscription sales .........        17,884              8         75,998                                                     76,006

Shares for subscription
    receivable .............                                                                                345,856         345,856

Warrants issued for contract
    termination costs                                            609,000                                                    609,000

Treasury stock .............      (486,862)                    1,145,358  ($ 1,145,358)                                        --

Tax benefits from options,
    warrants & common stock                                   11,148,083                                                 11,148,083

Exercise of options and
    warrants issued for
    services................                                     438,501                                                    438,501

Proceeds from options and
    warrants exercised .....     1,653,228            828      2,406,473                                                  2,407,301

Net income year ended
    December 31, 1997 ......                                                               20,966,862                    20,966,862
                               -----------   ------------   ------------  ------------   ------------   ------------    -----------
Balance December 31, 1997 ..    13,304,496          6,896     23,046,551    (1,145,358)    19,839,929           --       41,748,018
                               -----------   ------------   ------------  ------------   ------------   ------------    -----------

Treasury stock .............    (1,178,160)                                 (9,111,033)                                  (9,111,033)

Tax benefits from options,
    warrants & common  stock                                   3,512,205                                                  3,512,205

Exercise of options and
    warrants issued for
    services................                                     981,785                                                    981,785

Proceeds from options and
    warrants exercised .....       617,700            309        666,667                                                    666,976

Net income year ended
    December 31, 1998 ......                                                                6,809,526                     6,809,526
                               -----------   ------------   ------------  ------------   ------------   ------------    -----------
Balance December 31, 1998 ..    12,744,036          7,205     28,207,208   (10,256,391)    26,649,455           --       44,607,477
                               -----------   ------------   ------------  ------------   ------------   ------------    -----------

Treasury stock .............    (2,816,631)                                (14,788,193)                                 (14,788,193)

Tax benefits from options,
    warrants & common  stock                                    697,208                                                     697,208

Tax valuation allowance                                        (697,208)                                                   (697,208)

Warrants issued for services                                    202,975                                                     202,975

Proceeds from options and
    warrants exercised .....       422,326            210       427,289                                                     427,499

Other ......................                                    (30,364)                                                    (30,364)

Net loss year ended
    December 31, 1999 ......                                                               (4,203,785)                   (4,203,785)
                               -----------   ------------   ------------  ------------   ------------   ------------    -----------
Balance December 31, 1999 ..    10,349,731   $      7,415   $ 28,807,108  ($25,044,584)  $ 22,445,670           --     $ 26,215,609
                               -----------   ------------   ------------  ------------   ------------   ------------    -----------

</TABLE>



                 See accompanying notes to financial statements
                                      F-3

<PAGE>

<TABLE>
<CAPTION>


                            THE QUIGLEY CORPORATION
                            STATEMENTS OF CASH FLOWS

                                                             Year Ended     Year Ended       Year Ended
                                                             December 31,   December 31,    December 31,
                                                                1999            1998            1997
                                                            ------------    ------------    ------------
<S>                                                         <C>             <C>             <C>
OPERATING ACTIVITIES:

Net income (loss) .......................................   ($ 4,203,785)   $  6,809,526    $ 20,966,862
                                                            ------------    ------------    ------------
Adjustments to reconcile net income (loss) to
    net cash provided  by operations:

      Depreciation and amortization .....................        229,812         206,640         133,323
      Expenditures paid with common stock ...............        202,975         981,785       1,131,025
      Deferred income taxes .............................        397,489         193,756        (171,617)
      (Increase) decrease in assets:
           Accounts receivable ..........................        935,679       3,276,207      (8,650,749)
           Inventory ....................................        352,607       1,204,145      (7,426,025)
           Prepaid expenses and other current assets ....         41,422        (621,471)     (1,001,045)
           Prepaid income taxes .........................         80,074         982,736      (3,117,499)

      Increase (decrease) in liabilities:
           Accounts payable .............................       (362,255)       (357,587)        983,823
           Accrued royalties and sales commissions ......       (362,731)     (2,645,410)      4,100,211
           Accrued advertising ..........................      3,962,635         358,510         202,756
           Accrued freight ..............................         67,181        (431,495)        464,107
           Other current liabilities ....................        (79,939)     (1,009,923)      1,379,883
                                                            ------------    ------------    ------------
                Total adjustments .......................      5,464,949       2,137,893     (11,971,807)
                                                            ------------    ------------    ------------

     NET CASH PROVIDED BY OPERATING
       ACTIVITIES .......................................      1,261,164       8,947,419       8,995,055
                                                            ------------    ------------    ------------

     CASH FLOWS USED IN INVESTING
       ACTIVITIES:

        Capital expenditures ............................     (1,043,978)       (998,075)       (121,008)
        Other assets ....................................       (197,782)       (184,086)        (68,907)
                                                            ------------    ------------    ------------

     NET CASH FLOWS USED IN INVESTING
       ACTIVITIES .......................................     (1,241,760)     (1,182,161)       (189,915)
                                                             ------------    ------------    ------------

     CASH FLOWS FROM FINANCING
       ACTIVITIES:

        Tax benefits from stock options, warrants & stock           --         3,512,205      11,148,083
        Proceeds from exercises of options and warrants .        427,499         666,976       2,407,301
        Proceeds from common stock issued ...............           --              --            76,006
        Due from attorney's escrow account ..............           --              --           260,000
        Change in stockholders' subscription receivable .           --              --           345,856
        Repurchase of common stock ......................    (14,788,193)     (9,111,033)           --
                                                            ------------    ------------    ------------
        NET CASH FLOWS FROM FINANCING
        ACTIVITIES:                                          (14,360,694)    (4,931,852)      14,237,246
                                                            ------------    ------------    ------------

        NET INCREASE/(DECREASE) IN CASH .................    (14,341,290)      2,833,406      23,042,386

     CASH & CASH EQUIVALENTS,

        BEGINNING OF PERIOD .............................     28,331,765      25,498,359       2,455,973
                                                            ------------    ------------    ------------
     CASH & CASH EQUIVALENTS,
        END OF PERIOD ...................................   $ 13,990,475    $ 28,331,765    $ 25,498,359
                                                            ============    ============    ============

</TABLE>

                 See accompanying notes to financial statements
                                      F-4

<PAGE>



                            THE QUIGLEY CORPORATION
                      STATEMENTS OF CASH FLOWS (continued)


Supplemental disclosure of cash flow information
------------------------------------------------



                                           Year Ended   Year Ended   Year Ended
                                          December 31, December 31, December 31,
                                              1999         1998         1997
                                               $            $            $
                                          --------------------------------------

Income taxes paid                        .      --        283,669     6,650,000
-------------------------------------------------------------------------------

Non-cash investing and financing:
Capital expenditures                            --          --           (7,905)
Patent rights                                   --          --         (205,000)
Common stock issued for services performed      --          --        1,358,263
Treasury stock cost                             --          --       (1,145,358)








                 See accompanying notes to financial statements
                                      F-5


<PAGE>


                            THE QUIGLEY CORPORATION
                         NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Quigley  Corporation  (the  "Company") was organized  under the laws of the
State of Nevada on August 24, 1989.  The Company  started  business  October 1,
1989 and has been  engaged in the business of marketing  health  products.  The
products are fully developed and are being offered to the general  public.  For
the most recent fiscal periods, the Company has concentrated its efforts on the
promotion  of a product  known as  "Cold-Eeze(R)"  in the United  States.  This
product serves the cold remedy market.  The demand for the product is seasonal,
with, in general, the third and fourth quarters  representing the largest sales
volume. In December 1998 the Company launched a nutrition and weight management
program called Bodymate(TM).

Principles of Accounting

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

Cash Equivalents

The Company considers all highly liquid investments with an initial maturity of
three  months  or less at the time of  purchase  to be cash  equivalents.  Cash
equivalents include cash on hand and monies invested in money market funds. The
carrying  amount  approximates  the fair  market  value  due to the  short-term
maturity of these investments.

Inventories

Inventories  are stated at the lower of cost or market.  The  Company  uses the
first-in,  first-out  ("FIFO") method of determining  cost for all inventories.
Inventories are primarily comprised of finished goods.

Property, Plant and Equipment

Property,  plant  and  equipment  is  recorded  at  cost.  The  Company  uses a
combination of straight-line and accelerated methods in computing  depreciation
for financial  reporting  purposes.  The annual  provision for depreciation has
been computed  principally in accordance with the following ranges of estimated
asset lives: building and improvements - twenty years;  machinery and equipment
- five to seven years;  computer software - three years; vehicles - five years;
and furniture and fixtures - seven years.

Patent Rights

Patent  rights are  amortized on a  straight-line  basis over the period of the
related licensing agreements,  which approximate 67 months.  Amortization costs
incurred for the years ended December 31, 1999, December 31, 1998, and December
31,  1997  were  $87,761,  $87,762  and  $100,000,  respectively.   Accumulated
amortization at December 31, 1999,  December 31, 1998 and December 31, 1997, is
$292,538, $204,777, and $117,015, respectively.

Concentration of Risks

Financial  instruments  that  potentially  subject the  Company to  significant
concentrations of credit risk consist principally of cash investments and trade
accounts receivable.

The Company  maintains  cash and cash  equivalents  with three major  financial
institutions.  Since the  Company  maintains  amounts  in excess of  guarantees
provided by the Federal Depository Insurance Corporation,  the Company performs
periodic  evaluations  of the  relative  credit  standing  of  these  financial
institutions and limits the amount of credit exposure with any one institution.

                                      F-6
<PAGE>



Trade accounts receivable  potentially subjects the Company to credit risk. The
Company  extends  credit  to its  customers  based  upon an  evaluation  of the
customer's  financial  condition  and credit  history  and  generally  does not
require  collateral.  The  Company has  historically  incurred  minimal  credit
losses. The Company's broad range of customers includes many large wholesalers,
mass merchandisers and multi-outlet  pharmacy chains, five of which account for
a significant  percentage of sales volume,  representing 39% for the year ended
December 31, 1999,  38% for the year ended  December 31, 1998,  and 68% for the
year ended December 31, 1997.  During 1999,  approximately 94% of the Company's
revenues  originated in the United States with the remainder being attributable
to international trade.

The Company currently uses three separate suppliers to produce  Cold-Eeze(R) in
lozenge,  bubble gum,  and  sugar-free  tablet form.  Substantially  all of the
Company's  revenues are currently  generated from the sale of the  Cold-Eeze(R)
product.  The lozenge form is manufactured by a third party  manufacturer  that
produces exclusively for the Company. The other forms are manufactured by third
parties that produce a variety of other  products for other  customers.  Should
these  relationships  terminate or discontinue for any reason,  the Company has
formulated  a  contingency  plan in order to prevent such  discontinuance  from
materially  affecting  the  Company's  operations.  Any such  termination  may,
however,  result in a  temporary  delay in  production  until  the  replacement
facility is able to meet the Company's production requirements.

Raw material used in the  production of the product is available  from numerous
sources.  Currently,  it is being  procured  from a single  vendor  in order to
secure purchasing  economies.  In a situation where this one vendor is not able
to supply the contract  manufacturer  with the ingredients,  other sources have
been identified.

Long-lived assets

The Company reviews its long-lived  assets for impairment on an exception basis
whenever events or changes in  circumstances  indicate that the carrying amount
of the  assets may not be  recoverable  through  future  cash  flows.  If it is
determined  that an  impairment  loss has occurred  based on the expected  cash
flows, a loss is recognized in the income statement.

Revenue Recognition

Sales are recognized at the time a shipment is received by the customer.

Royalties

The Company  includes  royalties and founders  commissions  incurred as cost of
products sold based on agreement terms.

Advertising

Advertising  costs are  generally  expensed  within  the  period to which  they
relate.  Advertising  cost  incurred  for the year  ended  December  31,  1999,
December  31, 1998 and  December 31, 1997,  was  $16,132,888,  $9,221,225,  and
$3,050,210, respectively. Included in prepaid expenses and other current assets
was $448,908 and $998,370 at December 31, 1999 and 1998, respectively, relating
to prepaid advertising and promotion expenses.

Research and Development

Research and development  costs are charged to operations in the year incurred.
Expenditures  for the years ended  December  31,  1999,  December  31, 1998 and
December 31, 1997 were $297,650, $256,492 and $79,784, respectively.

Income Taxes

The  Company  utilizes  an asset and  liability  approach  which  requires  the
recognition  of  deferred  tax  assets  and  liabilities  for  the  future  tax
consequences  of events that have been  recognized in the  Company's  financial
statements or tax returns.  In estimating future tax consequences,  the Company
generally considers all expected future events other than enactments of changes
in the tax law or rates. See Note 6 for further discussion.

                                      F-7
<PAGE>


NOTE 2 - CHANGES IN ACCOUNTING ESTIMATES

During 1998, the Company made certain changes in accounting  estimates totaling
$1,243,677,  after  tax,  as a result of new  information  becoming  available.
Included in this amount was a provision for contingencies,  which was no longer
necessary, and reductions in operating expenses which did not materialize.

NOTE 3 - PROPERTY, PLANT AND EQUIPMENT

Consisted of the following as of:   December 31, 1999         December 31, 1998
                                    -----------------         -----------------

Land                                        $152,203                $152,203
Buildings and improvements                 1,415,771                 558,077
Machinery and equipment                      321,157                 238,129
Computer software                             48,638                  42,442
Vehicles                                     207,165                 207,165
Furniture and fixtures                       113,746                  16,686
                                     -----------------     -------------------
                                           2,258,680               1,214,702
Less: Accumulated  depreciation              315,367                 173,316
                                     -----------------     -------------------
Property, Plant and Equipment, net        $1,943,313              $1,041,386
                                     =================     ===================


Depreciation  expense for the years ended December 31, 1999,  December 31, 1998
and December 31, 1997 was $142,051, $118,878 and $33,323, respectively.

NOTE 4 - PATENT RIGHTS AND RELATED ROYALTY COMMITMENTS

During 1996, the Company  entered into a licensing  agreement  resulting in the
utilization of the zinc gluconate patent. In return for the acquisition of this
license,  the Company  issued a total of 240,000  shares of common stock to the
patent holder and attorneys during 1996 and 1997. The related intangible asset,
approximating  $490,000,  has been valued at the fair value of these  shares at
the date of the grant.  This asset value is being  amortized over the remaining
life of the patent which expires in March 2002.  The Company is required to pay
a 3% royalty on sales collected,  less certain deductions, to the patent holder
throughout the term of this agreement, which also expires in 2002.

The Company also maintains a separate representation and distribution agreement
relating to the development of the zinc gluconate glycine product  formulation.
In return for exclusive distribution rights, the Company must pay the developer
a 3% royalty and a 2%  consulting  fee based on sales  collected,  less certain
deductions,   throughout  the  term  of  this  agreement,   expiring  in  2007.
Additionally,  a founder's  commission  totaling 5%, on sales  collected,  less
certain  deductions,  is paid to two of the officers whose agreements expire in
2005.

All of the aforementioned  individuals  receiving royalties and commissions are
also  stockholders  of the Company.  The expenses  for the  respective  periods
relating to such agreements amounted to $2,638,727, $3,784,340, $8,870,828, for
the years ended  December  31,  1999,  December 31, 1998 and December 31, 1997,
respectively.  Amounts  accrued for these  expenses  at  December  31, 1999 and
December 31, 1998 were $1,337,193 and $1,592,917, respectively.

NOTE 5- LINE OF CREDIT

The  Company  has a revolving  line of credit  with a  commercial  bank for $10
million  to  be  used  for  general  corporate   purposes.   This  facility  is
collateralized  by accounts  receivable and inventory,  and renews in May 2000,
with  interest  accruing  at the  Prime  Rate,  or 225 basis  points  above the
Eurodollar  Rate,  each to move with the  respective  base rate.  There were no
borrowings under available lines during the twelve-month  period ended December
31, 1999 or 1998.

                                      F-8

<PAGE>


NOTE 6 - INCOME TAXES

The provision (benefit) for income taxes, consists of the following:


                                     Year Ended      Year Ended      Year Ended
                                     December 31,   December 31,    December 31,
                                          1999          1998            1997
                                     ------------    ----------     ------------
Current:
Federal                              ($1,181,327)   $3,537,579      $12,161,445
  State                                     -          622,296        2,281,733
                                     ------------    ----------     ------------
                                     ($1,181,327)    4,159,875       14,443,178
                                     ------------    ----------     ------------
Deferred:
Federal                               (1,285,077)      163,147         (180,601)
State                                   (605,998)       30,609            8,984
                                     ------------    ----------     ------------
                                      (1,891,075)      193,756         (171,617)
                                     ------------    ----------     ------------
Valuation allowance                    1,169,787           -               -
                                     ------------    ----------     ------------
Total                                ($1,902,615)   $4,353,631      $14,271,561
                                     ============    ==========     ============

A reconciliation  of the statutory  federal income tax expense (benefit) to the
effective tax is as follows:

                                     Year Ended      Year Ended      Year Ended
                                     December 31,   December 31,    December 31,
                                          1999          1998            1997
                                     ------------    ----------     ------------

Statutory rate                       ($2,076,176)    $3,907,105     $12,333,448
State taxes net of federal benefit      (403,022)       446,526       1,937,029
Permanent differences                   (593,204)          -               -
Other                                       -              -              1,084
                                     ------------    -----------     -----------
                                      (3,072,402)     4,353,631      14,271,561
                                     ------------    -----------     -----------
Less valuation allowance               1,169,787           -               -
                                     ------------    -----------     -----------
Total                                ($1,902,615)    $4,353,631     $14,271,561
                                     ============    ===========     ===========

The tax effects of the primary "temporary  differences" between values recorded
for assets and liabilities for financial reporting purposes and values utilized
for  measurement  in  accordance  with tax laws  giving  rise to the  Company's
deferred tax assets are as follows:

                                     Year Ended      Year Ended      Year Ended
                                     December 31,   December 31,    December 31,
                                          1999          1998            1997
                                     ------------    ----------     ------------
Net operating loss carry-forward      $1,751,199         -                   -
Contract termination costs               378,555       $378,554        $234,000
Bad debt expense                          54,164           -               -
Other                                    104,648         18,935         357,245
Valuation allowance                   (2,288,566)          -               -
                                     ------------    -----------     -----------
Total                                       -          $397,489        $591,245
                                     ============    ===========     ===========

Certain  exercises of options and  warrants,  and  restricted  stock issued for
services that became unrestricted during the period,  resulted in reductions to
taxes    currently     payable    and    a     corresponding     increase    to
additional-paid-in-capital  totaling zero, $3,512,205,  and $11,148,083 for the
years ended  December 31, 1999,  1998, and 1997  respectively.  The tax benefit
effect of option and warrant exercises during 1999 was $697,208,  however, this
benefit is being deferred because of a net operating loss carry-forward for tax
purposes  ("NOLs")  that  occurred  during  the  fourth  quarter of 1999 from a
cumulative effect of deducting a total value of $42,800,364 attributed to these
options,  warrants and unrestricted stock deductions from taxable income during
the tax years 1997 and 1998. The net operating loss carry-forwards arising from
the option,  warrant and stock activities  approximate $3.5 million for federal
puposes,  which will expire in 2019 and $9.7 million for state purposes,  which
will expire in 2009.  Until  sufficient  taxable income to offset the temporary
timing   differences   attributable   to  operations  and  the  tax  deductions
attributable to option,  warrant and stock activities are assured,  a valuation
allowance equaling the total deferred tax asset is being provided.

                                      F-9

<PAGE>


NOTE 7 - EARNINGS PER SHARE

Basic earnings per share ("EPS") excludes  dilution and is computed by dividing
income  available to common  stockholders  by the weighted - average  number of
common shares  outstanding  for the period.  Diluted EPS reflects the potential
dilution  that could occur if  securities  or other  contracts  to issue common
stock were exercised or converted into common stock or resulted in the issuance
of common  stock that then shared in the  earnings  of the entity.  Diluted EPS
also utilizes the treasury stock method which prescribes a theoretical buy back
of shares from the theoretical proceeds of all options and warrants outstanding
during  the  period.  Since  there is a large  number of options  and  warrants
outstanding,  fluctuations  in the  actual  market  price can have a variety of
results for each period presented.

A  reconciliation  of the applicable  numerators and denominators of the income
statement periods presented is as follows (millions,  except earnings per share
amounts):


                       Year Ended          Year Ended          Year Ended
                   December 31, 1999   December 31, 1998   December 31, 1997
                  --------------------------------------------------------------

                  Loss  Shares   EPS   Income Shares  EPS  Income Shares  EPS
                  --------------------------------------------------------------

Basic EPS       ($ 4.2)   11.4  ($0.37)  $6.8   13.3  $0.51  $21.0  12.2  $1.72

Dilutives:
Options and
  Warrants         --      --      --      --     1.6    --     --    2.4    --
                 -----   -----  ------   -----  ----- -----  -----  ----- -----
Diluted EPS     ($ 4.2)   11.4  ($0.37)  $6.8   14.9  $0.46  $21.0  14.6  $1.43
                 =====   =====  =======  =====  ===== =====  =====  ===== =====

At December 31, 1999,  there are  4,279,400  options and warrants  outstanding.
Their  impact on future  diluted  earnings per share is dependent on the market
price of the Company's common stock.

NOTE 8 - STOCK COMPENSATION

Stock options for purchase of the  Company's  common stock have been granted to
both  employees  and  non-employees  since  the  date of the  Company's  public
inception.  Options are exercisable  during a period determined by the Company,
but in no event later than ten years from the date granted.

On December 2, 1997,  the  Company's  Board of  Directors  approved a new Stock
Option Plan ("Plan")  which provides for the granting of up to one million five
hundred  thousand  shares to employees.  Under this Plan, the Company may grant
options  to  employees,  officers  or  directors  of the  Company  at  variable
percentages of the market value of stock at the date of grant.  No option shall
be exercisable  more than ten years after the date of grant or five years where
the individual owns more than ten percent of the total combined voting power of
all classes of stock of the Company.  Stockholders approved the Plan in 1998. A
total of 409,000 and 550,500  options were  granted  under this Plan during the
years ended December 31, 1999 and December 31, 1998, respectively.

The Company applies  Accounting  Principles  Board Opinion No. 25 ("APB 25") in
accounting  for its grants of options to employees.  Under the intrinsic  value
method  prescribed  by APB 25, no  compensation  expense  relating to grants to
employees has been recorded by the Company in periods reported. If compensation
expense for awards made during the years ended December 31, 1999,  December 31,
1998 and December 31, 1997, had been determined  under the fair value method of
Statement  of  Financial   Accounting   Standards  No.  123,   "Accounting  for
Stock-Based  Compensation,"  the  Company's  net income and  earnings per share
would have been reduced to the pro forma amounts indicated below:

                               Year Ended         Year Ended         Year Ended
                               December 31,      December 31,       December 31,
                                  1999               1998               1997
                               ------------      ------------       ------------
Pro forma net income (loss)    ($5,246,735)        $5,339,691        $20,194,062

Pro forma earnings (loss)
    per share:

Basic                             ($0.46)             $0.40             $1.66
Diluted                           ($0.46)             $0.36             $1.38







                                      F-10

<PAGE>


Expense  relating to options granted to  non-employees  has been  appropriately
recorded in the periods  presented based on either fair values agreed upon with
the grantees or fair values as  determined by the  Black-Scholes  pricing model
dependent upon the circumstances relating to the specific grants.

The Company used the Black-Scholes pricing model to determine the fair value of
stock  options  granted  during  the  periods  presented  using  the  following
assumptions:  expected  life of the option of 5 years and  expected  forfeiture
rate of 0%;  expected  stock  price  volatility  of 59.5%  for the  year  ended
December  31,  1999 and 29.0% for the years ended  December  31, 1998 and 1997;
expected  dividend yield of 1.5%;  and risk-free  interest rate of 5.1% for the
year ended  December 31, 1999;  expected  dividend  yield of 2.5% and risk-free
interest  rate of 5.71% for the year ended  December  31,  1998,  and  expected
dividend yield of 2.5% and risk-free  interest rate of 6.56% for the year ended
December 31,  1997,  based on the  expected  life of the option.  The impact of
applying  SFAS No. 123 in this pro forma  disclosure  is not  indicative of the
impact on future  years'  reported net income as SFAS No. 123 does not apply to
stock options granted prior to the beginning of fiscal year 1996 and additional
stock  options  awards  are  anticipated  in future  years.  All  options  were
immediately vested upon grant.

A summary of the status of the Company's stock options and warrants  granted to
both employees and  non-employees  as of December 31, 1999,  1998, and 1997 and
changes during the years then ended is presented below:

Year Ended December 31, 1999:
<TABLE>
<CAPTION>

                                                 Employees               Non-Employees                 Total
                                        ----------------------- --------------------------- ---------------------------

                                                        Weighted                 Weighted                      Weighted
                                                         Average                  Average                       Average
                                          Shares        Exercise     Shares      Exercise        Shares        Exercise
                                          (,000)          Price      (,000)        Price         (,000)         Price
                                      ---------------------------------------------------------------------------------
<S>                                   <C>             <C>         <C>           <C>          <C>              <C>

Options/warrants outstanding
   at  beginning of period                 2,560          $4.27       1,790         $4.55         4,350          $4.39
Additions (deductions):
  Granted                                    389          5.125          20         5.125           409          5.125
  Exercised                                  150             -          330            -            480           -
                                      ---------------------------------------------------------------------------------
Options/warrants outstanding
   at end of period                        2,799          $4.59       1,480         $5.14         4,279          $4.78
                                      ---------------------------------------------------------------------------------

Options/warrants exercisable
   at end of period                        2,799                      1,480                       4,279
                                      ==================================================================================

Weighted average fair value
of grants                                  $1.41                      $1.41                       $1.41

Price range of options/warrants
   exercised                               $0.50                 $0.75-$2.50                 $0.50-$2.50
Price range of options/warrants
   outstanding                        $0.50-$10.00               $0.50-$10.00                $0.50-$10.00
Price range of options/warrants
   exercisable                        $0.50-$10.00               $0.50-$10.00                $0.50-$10.00


</TABLE>




                                      F-11
<PAGE>



Year Ended December 31, 1998:
<TABLE>
<CAPTION>


                                                 Employees               Non-Employees                 Total
                                        ----------------------- --------------------------- ---------------------------

                                                        Weighted                 Weighted                      Weighted
                                                         Average                  Average                       Average
                                          Shares        Exercise     Shares      Exercise        Shares        Exercise
                                          (,000)          Price      (,000)        Price         (,000)         Price
                                      ---------------------------------------------------------------------------------
<S>                                   <C>             <C>         <C>           <C>          <C>              <C>

Options/warrants outstanding
   at beginning of period                  2,030          $2.86       2,388         $3.61         4,418          $3.27

Additions (deductions):
  Granted                                    530           9.68          20          9.68           550           9.68
  Exercised                                   -             -           618          1.08           618           1.08
                                      ---------------------------------------------------------------------------------
Options/warrants outstanding
   at end of period                        2,560         $4.27        1,790         $4.55         4,350          $4.39
                                      ---------------------------------------------------------------------------------
Options/warrants exercisable
   at end of period                        2,560                      1,790                       4,350
                                      ==================================================================================

Weighted average fair value
of grants                                  $2.67                      $2.67                       $2.67

Price range of  options/warrants
   exercised                                 -                    $0.50-$1.75                 $0.50-$1.75
Price range of options/warrants
   outstanding                        $0.50-$10.00                $0.50-$10.00                $0.50-$10.00
Price range of options/warrants
   exercisable                        $0.50-$10.00                $0.50-$10.00                $0.50-$10.00


 Year Ended December 31, 1997:


                                                 Employees               Non-Employees                 Total
                                        ----------------------- --------------------------- ---------------------------

                                                     Weighted                   Weighted                     Weighted
                                                      Average                    Average                     Average
                                          Shares     Exercise       Shares      Exercise         Shares     Exercise
                                          (,000)       Price        (,000)        Price          (,000)       Price
                                      ---------------------------------------------------------------------------------
Options/warrants outstanding
   at  beginning of period                1,820          $1.39        3,240        $1.36         5,060          $1.37
Additions (deductions):
  Granted                                   345          10.00          675         9.82         1,020          10.00
  Exercised                                 135           1.33        1,527         1.55         1,662           1.53
                                      ---------------------------------------------------------------------------------

Options/warrants outstanding
   at end of period                        2,030         $2.86        2,388        $3.61         4,418          $3.27
                                      ---------------------------------------------------------------------------------
Options/warrants exercisable
   at end of period                        2,030                      2,388                      4,418
                                      ==================================================================================


Weighted average fair value
of grants                                  $2.24                      $2.24                      $2.24

Price range of  options/warrants
   exercised                          $0.50 - $2.50              $0.50-$10.00               $0.50-$10.00
Price range of options/warrants
   outstanding                        $0.50-$10.00               $0.50-$10.00               $0.50-$10.00
Price range of options/warrants
   exercisable                        $0.50-$10.00               $0.50-$10.00               $0.50-$10.00

</TABLE>

                                      F-12

<PAGE>


The following table summarizes  information about stock options outstanding and
stock options exercisable,  as granted to both employees and non-employees,  at
December 31, 1999:


<TABLE>
<CAPTION>

                                              Employees                                          Non-Employees
                           ------------------------------------------------- ------------------------------------------------------
                                              Weighted                                              Weighted
                                              Average                                               Average
                                             Remaining         Weighted                            Remaining          Weighted
             Range of              Number   Contractual        Average                 Number     Contractual          Average
         Exercise Prices       Outstanding       Life        Exercise Price        Outstanding        Life          Exercise Price
         ----------------- --------------- --------------- ----------------- ----------------- ------------------ -----------------
         <S>              <C>                   <C>             <C>          <C>                     <C>              <C>
         $0.500-$5.125          1,924,000       3.0             $2.22                 859,900         1.7              $1.64
         $9.680-$10.000           875,500       5.8             $9.81                 620,000         2.6              $9.99
                           ---------------                                   -----------------
                                2,799,500                                           1,479,900
                           ===============                                   =================

</TABLE>

Options outstanding as of December 31, 1999, December 31, 1998 and December 31,
1997,  expire from December 14, 2000 through April 6, 2009,  depending upon the
date of grant.

In early  1999 the  Company  implemented  a defined  contribution  plan for its
employees. The Company's contribution to the plan is based on the amount of the
employee plan  contributions.  The Company's  contribution  cost to the plan in
1999 was approximately $94,000.

NOTE 9 - STOCKHOLDERS' EQUITY

On  September 8, 1998,  the  Company's  Board of Directors  declared a dividend
distribution of Common Stock Purchase Rights ("the Rights"), thereby creating a
Stockholder  Rights  Plan  (the  "Plan").  The  dividend  was  payable  to  the
stockholders  of  record  on  September  25,  1998.  Each  Right  entitles  the
stockholder of record to purchase from the Company that number of common shares
having a combined  market value equal to two times the Rights exercise price of
$45. The Rights are not exercisable until the distribution  date, which will be
the earlier of a public  announcement  that a person or group of  affiliated or
associated  persons has acquired 15% or more of the outstanding  common shares,
or the  announcement  of an  intention  to  make a  tender  or  exchange  offer
resulting in the ownership of 15% or more of the outstanding common shares by a
similarly  constituted  party.  The  dividend  has the  effect  of  giving  the
stockholder a 50% discount on the share's  current  market value for exercising
such right. In the event of a cashless  exercise of the Right, and the acquirer
has acquired less than a 50% beneficial ownership of the Company, a stockholder
may  exchange  one  Right  for one  common  share  of the  Company.  The  Final
Expiration of the Plan is September 25, 2008.

Since the inception of the stock  buy-back  program in January 1998,  the Board
has subsequently  increased the  authorization  on four occasions,  for a total
authorized  buy-back of 4,000,000 shares or  approximately  30% of the previous
shares  outstanding.  Such shares are  reflected as treasury  stock and will be
available  for general  corporate  purposes.  From the  initiation of the plan,
3,994,791  shares have been  repurchased at a cost of $23,899,226 or an average
cost of $5.98 per share.

NOTE 10 - SERVICE CONTRACTS AND RELATED TERMINATION COSTS

In October 1996,  the Company  entered into a three-year  agreement  with Sands
Brothers  &  Co.,  Ltd.  for  investment  banking  services  including  private
placements.  Upon commencement of the contract, Sands received 800,000 warrants
with an  exercise  price of $1.75  per share  contingent  upon  services  to be
provided. During the first quarter of 1997, the Company decided not to pursue a
private placement offering. In order to terminate the agreement with Sands, the
Company issued to Sands 350,000  additional  warrants to purchase the Company's
stock at $10 per  share.  As a result,  the  Company  recorded  an  expense  of
approximately $700,000 in 1997 and $462,000 in 1998.

                                      F-13

<PAGE>


NOTE 11 - SETTLED LITIGATION

During  1992,  the Company  authorized  litigation  against  Nutritional  Foods
Corporation  ("NFC")  in  which  the  Company  sought  to  cancel  the  729,928
restricted  shares issued to NFC for  international  marketing  services,  as a
result  of  certain  false  and  misleading  representations  made by it to the
Company  including,  but not limited to, NFC's  failure to act as the Company's
international sales agent under an agreement between NFC and the Company.

Pursuant to a final decree issued in the Court of Common Pleas of Bucks County,
Pennsylvania dated January 23, 1997, the Company received an order to return to
treasury  these  outstanding  shares.  In November of 1997,  NFC challenged the
validity of the decree.  In March of 1998, a  subsequent  order of the Court of
Common Pleas of Bucks County modified the decree of January 23, 1997 to provide
for a return to treasury of 604,928 shares to the Company. As payment for legal
services,  118,066  of  these  shares  were  reissued  with a  market  value of
approximately  $1,145,358.  This value,  the cost of reacquiring  these shares,
then became the value of the net treasury  stock ($2.35 per share)  represented
by 486,862 shares returned to treasury.

In October 1999, the Company reached a settlement in a lawsuit by an individual
named  Marjorie  Durst that resolved all matters  between the Plaintiff and the
Company.  This  legal  proceeding  was  previously  reported  in the  Company's
Quarterly  Report  on Form  10-Q  for the  quarter  ended  June 30,  1999.  The
resolution of this dispute is not material to the Company's financial position,
results of operations or liquidity.

NOTE 12 - COMMITMENTS AND CONTINGENCIES

Certain  operating  leases for office and  warehouse  space  maintained  by the
Company  resulted  in rent  expense  for the years  ended  December  31,  1999,
December 31, 1998 and December  31,  1997,  of $137,015,  $153,594 and $92,464,
respectively. The future minimum lease obligations under these operating leases
are $14,901 for 2000.

The  Company  has  committed  to  advertising  costs  approximating  $5,100,000
relating to 2000. Additional  advertising costs are expected to be incurred for
the remainder of 2000.

In March,  1997, the Company was sued by two individuals  (Thomas  Goldblum and
Alan Wayne) in the court of Common Pleas of  Montgomery  County,  Pennsylvania.
The complaint  alleges that the Plaintiffs  became the owners of 500,000 shares
each of the  Company's  Common Stock in or about 1990,  and request  damages in
excess of $100,000  for breach of contract  and  conversion.  During the second
quarter  of 1999,  the  Company  was made aware  that the  Plaintiffs  took the
position that the Company's 1990 pre-public 1 for 2.74 reverse split and 1995 1
for 10 reverse split did not apply to the shares  claimed by them.  The Company
is  vigorously  defending  this  lawsuit  and has denied any  liability  to the
Plaintiffs  because they did not perform agreed upon services as a condition to
the receipt of the shares from the Company.  The Company also believes that the
Plaintiffs'  claims are barred by the applicable  statues of  limitations,  and
that  the  Plaintiffs'  claims  are,  in  any  event,  limited  to  claims  for
approximately  36,000 each. Although the Company believes the Plaintiffs' claim
to be  without  merit,  the  case  is  still  in the  discovery  stages  and no
prediction can be made as to its outcome.

In  addition  to the  foregoing  litigation,  the  Company  is subject to legal
proceedings  and  claims  which  have  arisen  in the  ordinary  course  of its
business.  Although there can be no assurance as to the ultimate disposition of
these  matters,  it is the opinion of the Company's  management  based upon the
information available at this time, that the expected outcome of these matters,
individually  or in the aggregate,  will not have a material  adverse effect on
the financial position, results of operations or cash flows of the Company.

NOTE 13 - RELATED PARTY TRANSACTIONS

In the ordinary  course of business,  the Company has sales brokerage and other
arrangements  with entities whose major  stockholders are also  stockholders of
The Quigley  Corporation,  or are related to major stockholders of the Company.
Commissions  and other items  expensed  under such  arrangements  for the years
ended  December  31,  1999,  December  31, 1998 and  December  31,  1997,  were
$370,466,  $270,113 and  $274,154,  respectively.  Amounts  payable  under such
agreements  at  December  31,  1999 and 1998  were  approximately  $89,605  and
$70,634, respectively.

The  Company  is in the  process of  acquiring  licenses  in certain  countries
through  related party  entities.  During 1999, fees amounting to $110,000 have
been paid to a related entity to obtain such licenses.

                                      F-14

<PAGE>


NOTE 14 - QUARTERLY INFORMATION (UNAUDITED)

                                              Quarter Ended
                           -----------------------------------------------------
                            March 31,     June 30,  September 30,  December 31,
                           -----------------------------------------------------
1999

Net Sales                  $6,136,902   $2,063,319   $4,103,965   $12,515,756
Gross Profit                4,084,252    1,400,337    2,743,230     8,712,820
Net Income (loss)          (1,855,214)  (1,103,629)      18,333    (1,263,275)

Basic (loss) per
   common share                ($0.15)      ($0.10)       $0.00        ($0.12)
Diluted (loss) per
   common share                ($0.15)      ($0.10)       $0.00        ($0.12)

1998

Net Sales                  $7,271,819   $1,317,872   $10,747,978  $17,016,486
Gross Profit                5,060,523      919,530     7,572,872   11,923,636
Net Income                  1,266,933        1,235     3,014,056    2,527,302

Basic earnings per
    common share                $0.10        $0.00         $0.22        $0.19
Diluted earnings per
    common share                $0.08        $0.00         $0.20        $0.18









                                      F-15


<PAGE>










                    RESPONSIBILITY FOR FINANCIAL STATEMENTS
                    ---------------------------------------

The management of The Quigley  Corporation is responsible  for the  information
and  representations  contained in this report.  Management  believes  that the
financial  statements have been prepared in conformity with generally  accepted
accounting  principles and that the other  information in this annual report is
consistent  with those  statements.  In  preparing  the  financial  statements,
management is required to include  amounts  based on estimates  and  judgements
which it believes are reasonable under the circumstances.

In fulfilling its  responsibilities for the integrity of the data presented and
to safeguard  the  Company's  assets,  management  employs a system of internal
accounting  controls designed to provide reasonable  assurance,  at appropriate
cost,  that the  Company's  assets  are  protected  and that  transactions  are
appropriately  authorized,  recorded and summarized.  This system of control is
supported  by  the  selection  of  qualified   personnel,   by   organizational
assignments  that provide  appropriate  delegation of authority and division of
responsibilities, and by the dissemination of policies and procedures.

PricewaterhouseCoopers LLP, the Company's independent accountants, performed an
audit for the years ended December 31, 1999,  1998 and 1997, in accordance with
generally accepted auditing standards.  The independent accountants conducted a
review of  internal  accounting  controls to the extent  required by  generally
accepted  auditing  standards and performed such tests and procedures,  as they
deem  necessary  to arrive  at an  opinion  on the  fairness  of the  financial
statements presented herein.


/s/ Guy J. Quigley                              February 18, 2000
------------------                              -----------------
Guy J. Quigley,                                         Date
Chairman of the Board
President, Chief Executive Office



/s/ George J. Longo                             February 18, 2000
-------------------                             -----------------
George J. Longo,                                        Date
Vice President,
Chief Financial Officer
(Principal Financial and Accounting Officer)






                                      F-16

<PAGE>



                       REPORT OF INDEPENDENT ACCOUNTANTS
                       ---------------------------------

To the Board of Directors and Stockholders of The Quigley Corporation

In our opinion,  the accompanying  balance sheets and the related statements of
income,  stockholders'  equity,  and cash flows present fairly, in all material
respects,  the financial  position of The Quigley  Corporation  at December 31,
1999 and 1998, and the results of its operations and its cash flows for each of
the three years in the period  ended  December  31, 1999,  in  conformity  with
accounting  principles generally accepted in the United States. These financial
statements   are  the   responsibility   of  the  Company's   management;   our
responsibility is to express an opinion on these financial  statements based on
our audits.  We conducted our audits of these  statements  in  accordance  with
auditing standards generally accepted in the United States,  which require that
we plan and perform the audit to obtain reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An audit  includes
examining,  on a test basis, evidence supporting the amounts and disclosures in
the  financial  statements,   assessing  the  accounting  principles  used  and
significant estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable basis
for the opinion expressed above.



/s/PricewaterhouseCoopers LLP
-----------------------------
PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
February 18, 2000



                                      F-17

<PAGE>


ITEM  9 CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
        ----------------------------------------------------------------------
        FINANCIAL DISCLOSURE
        --------------------

On January 29, 1997, the Company  engaged the  independent  accounting  firm of
PricewaterhouseCoopers  LLP to audit the Company's financial statements for the
calendar year 1997.  The  replacement  of the previous  certifying  accountant,
Nachum Blumenfrucht, CPA, was made by approval of the Board of Directors of the
Company and with the agreement of Mr. Blumenfrucht.  This change was due to the
dramatic expansion of business  operations  undertaken by the Company since the
close of the prior fiscal  year.  There were no  disagreements  with the former
accountant  on any matter of  accounting  principles  or  practices,  financial
statement disclosure,  or auditing scope of procedure, nor any reportable event
required to be disclosed.

                                    PART III
                                    --------


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
         -----------------------------------------------
The  information  required under this item is  incorporated by reference to the
Company's Proxy Statement for the 2000 Annual Meeting of Stockholders.


ITEM 11. EXECUTIVE COMPENSATION
         ----------------------
The  information  required under this item is  incorporated by reference to the
Company's Proxy Statement for the 2000 Annual Meeting of Stockholders.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
         --------------------------------------------------------------
The  information  required under this item is  incorporated by reference to the
Company's Proxy Statement for the 2000 Annual Meeting of Stockholders.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
         ----------------------------------------------
The  information  required under this item is  incorporated by reference to the
Company's Proxy Statement for the 2000 Annual Meeting of Stockholders.



                                      -15-

<PAGE>



                                    PART IV
                                    -------

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

(a)   Exhibits:

3.1   Articles of  Incorporation  of the Company (as amended),  (incorporated by
      reference to Exhibit 3.1 of Form 10-KSB/A dated April 4, 1997)

3.2   By-laws of the Company as currently in effect  (incorporated  by reference
      to Exhibit 3.2 of the  Company's  Registration  Statement on Form 10-KSB/A
      filed  with  the  Commission  on April 4,  1997  and  Exhibit  99.3 of the
      Company's  Current  Report  on Form  8-K  filed  with  the  Commission  on
      September 21, 1998)

4.1   Specimen Common Stock  Certificate  (incorporated  by reference to Exhibit
      4.1 of Form 10-KSB/A dated April 4, 1997)

10.1  1997 Stock Option Plan  (incorporated  by reference to Exhibit 10.1 of the
      Company's  Registration  Statement on Form S-8 (File No.  333-61313) filed
      with the Commission on August 13, 1998)

10.2  Exclusive  Representation  and  Distribution  Agreement  dated May 4, 1992
      between  the  Company  and  Godfrey   Science  and  Design,   Inc.  et  al
      (incorporated  by reference to Exhibit 10.2 Form  10-KSB/A  dated April 4,
      1997)

10.3  Employment  Agreement  dated June 1, 1995  between  the Company and Guy J.
      Quigley  (incorporated by reference to Exhibit 10.3 of Form 10-KSB/A dated
      April 4, 1997)

10.4  Employment Agreement dated June 1, 1995 between the Company and Charles A.
      Phillips (incorporated by reference to Exhibit 10.4 of Form 10-KSB/A dated
      April 4, 1997)

10.5  Exclusive Master Broker Wholesale  Distributor and Non-Exclusive  National
      Chain Broker Agreement dated July 22, 1994 between the Company and Russell
      Mitchell (incorporated by reference to Exhibit 10.7 of Form 10-KSB/A dated
      April 4, 1997)

10.6  Licensing  Agreement dated August 24, 1996 between the Company,  George A.
      Eby III and George Eby Research (incorporated by reference to Exhibit 10.6
      of Form 10-KSB/A dated April 4, 1997)

10.8  United States Exclusive Supply Agreement dated March 17, 1997 (Portions of
      this  exhibit are omitted and were filed  separately  with the  Securities
      Exchange  Commission  pursuant  to the  Company's  application  requesting
      confidential  treatment  in  accordance  with Rule 406 of  Regulation C as
      promulgated under the Securities Act of 1933, incorporated by reference to
      Exhibit 10.5 of Form SB-2 dated September 29, 1997)

10.9  Consulting  Agreement  dated May 4, 1992  between  the Company and Godfrey
      Science and Design, Inc. et al. (incorporated by reference to Exhibit 10.5
      of Form 10-KSB/A dated April 4, 1997)

10.10 Employment  Agreement  dated  November  5, 1996  between  the  Company and
      George J. Longo (incorporated by reference to Exhibit 10.10 of Form 10-KSB
      dated March 30, 1998)

10.11 Employment  Agreement  dated  January 1, 1997 between the Company and Eric
      H. Kaytes (incorporated by reference to Exhibit 10.11 of Form 10-KSB dated
      March 30, 1998)



                                      -16-

<PAGE>



10.12 Rights  Agreement  dated  September  15,  1998  between  the  Company  and
      American  Stock Transfer and Trust Company  (incorporated  by reference to
      Exhibit 1 to the Company's  Registration  Statement on Form 8-A filed with
      the Commission on September 18, 1998)

23.1  Consent of  PricewaterhouseCoopers  LLP,  Auditors,  dated  March 15, 2000
      (filed herewith)

27.1  Financial Data Schedule

--------------------------------------------------------------------------------


(b)  Reports on Form 8-K

     No reports were filed on Form 8-K in the quarter ended December 31, 1999.



                                      -17-

<PAGE>



Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                                        THE QUIGLEY CORPORATION

 /s/ Guy J. Quigley                                            March 20, 2000
 ------------------                                            --------------
Guy J. Quigley, Chairman of the Board,                             Date
President, Chief Executive Officer and Director




Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934,  this
report has been signed by the following persons on behalf of the Company in the
capacities and on the dates indicated:

  Signature                             Title                       Date
  ---------                             -----                       ----

/s/ Guy J. Quigley          Chairman of the Board,              March 20, 2000
------------------          President, Chief Executive          --------------
Guy J. Quigley              Officer and Director




/s/ Charles A. Phillips     Executive Vice President,           March 20, 2000
-----------------------     Chief Operating Officer             --------------
Charles A. Phillips         and Director


/s/ George J. Longo         Vice President, Chief Financial     March 20, 2000
-------------------         Officer and Director (Principal     --------------
George J. Longo             Financial and Accounting Officer)


/s/ Eric H. Kaytes          Vice President,                     March 20, 2000
------------------          Chief Information Officer,          --------------
Eric H. Kaytes              Secretary, Treasurer
                            and Director


/s/ Jacqueline F. Lewis     Director                            March 20, 2000
-----------------------                                         --------------
Jacqueline F. Lewis


/s/ Rounsevelle W. Schaum   Director                            March 20, 2000
-------------------------                                       --------------
Rounsevelle W. Schaum



                                      -18-

<PAGE>

                                                                 EXHIBIT 23.1



                       CONSENT OF INDEPENDENT ACCOUNTANTS


We  hereby  consent  to the  incorporation  by  reference  in the  Registration
Statement on Form S-8 (File Nos. 333-61313, 333-10059, 333-14687 and 333-26589)
and S-3 (File No.  333-31241)  of The Quigley  Corporation  of our report dated
February 18, 2000, relating to the financial statements,  which appears in this
Form 10-K.



/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
March 15, 2000





                                      -19-


<PAGE>