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, 2000

                         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 2, 2001,  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 $11,347,688 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 2,  2001:
10,675,153

                      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 2001 Annual Meeting
    of Stockholders.

                 THE EXHIBIT INDEX IS LOCATED ON PAGES 19-20.


                                  Page 1 of 23

<PAGE>





                               TABLE OF CONTENTS


Part I                                                                   Page
                                                                         ----

   Item   1.   Description of Business                                   3 - 8

          2.   Description of Properties                                     8

          3.   Legal Proceedings                                         8 - 9

          4.   Submission of Matters to a Vote by Security Holders           9

Part II

          5.   Market for the Company's Common Equity and Related
                Stockholder Matters                                     9 - 10

          6.   Selected Financial Data                                 10 - 11

          7.   Management's Discussion and Analysis of Results of
                Operations and Financial Condition                     11 - 16

          8.   Financial Statements                                         17

          9.   Change in and Disagreements with Accountants on
                Accounting and Financial Disclosure                         18

Part III

          10.  Directors and Executive Officers of the Registrant           18

          11.  Executive Compensation                                       18

          12.  Security Ownership of Certain Beneficial
               Owners and Management                                        18

          13.  Certain Relationships and Related Transactions               18


Part IV

          14.  Exhibits, Financial Statement Schedules and Reports
                on Form 8-K                                            19 - 23







                                      -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 2001.


                                    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
cold remedy  products to the  consumer  through  the  over-the-counter  market
place. Its key product 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.

In January 2000 Darius  International,  Inc., a wholly owned subsidiary of The
Quigley Corporation,  was formed as a means of introducing new products to the
marketplace.  Additionally, effective July 1, 2000, the Company acquired a 60%
ownership  position in Caribbean  Pacific  Natural  Products based in Orlando,
Florida.

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

Since its  inception,  the  Company  has  continued  to conduct  research  and
development  into  various  types  of  health-related   food  supplements  and
homeopathic cold remedies. Initially, the Company's business was the marketing
and  distribution  of a line of  nutritious  health  supplements  (hereinafter
"Nutri-Bars").  During 1995, the Company reduced the emphasis in the marketing
of the  Nutri-Bars  and  commenced  focusing  its  marketing  and research and
development   resources  towards  the  Company's  patented  Cold-Eeze(R)  zinc
gluconate glycine cold relief products.

Prior to the fourth  quarter 1996,  the Company had minimal  revenues and as a
result suffered  continued  losses due to ongoing research and development and
operating expenses. However, 1997 resulted in significant revenue increases as
a result of the  Company's  nationwide  marketing  campaign and the  increased
public   awareness   through  media  public  service   announcements   of  the
Cold-Eeze(R) 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. These 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.The  demand for the Company's products
is  seasonal,  where the first and fourth  quarters  generally  represent  the
largest sales volume.

                                      -3-


<PAGE>


As referred to earlier,  the Company  formed  Darius  International,  Inc.,  a
wholly owned  subsidiary,  in January 2000 for the purpose of introducing  new
products to the  marketplace  through a network of  independent  distributors.
Darius is a direct selling organization specializing in proprietary health and
wellness products.  The Company commenced shipping product to customers in the
third quarter of 2000.

Effective  July 1, 2000,  The  Quigley  Corporation  acquired a 60%  ownership
position of Caribbean Pacific Natural Products,  Inc., a leading developer and
marketer of all-natural sun and skin products for luxury resorts,  theme parks
and spas.  Caribbean  Pacific  Natural  Products,  Inc., is  headquartered  in
Orlando, Florida.

The  formation  of  Darius  International  Inc.,  and the  majority  ownership
position in Caribbean Pacific Natural Products,  Inc., provide diversification
to the  Company  in both the method of product  distribution  and the  broader
range of products available to the marketplace.

In January 2001, the Company formed an Ethical  Pharmaceutical  Division under
the direction of the Company's  executive medical director and chairman of its
medical advisory committee. The launch of the Company's Ethical Pharmaceutical
Division  follows the Patent Office of The United States  Commerce  Department
confirming the Company's filing and assignment of a Patent Application for the
"Method and  Composition  for the Topical  Treatment of Diabetic  Neuropathy".
Establishing  a dedicated  pharmaceutical  division will enable the Company to
diversify into the  prescription  drug market and to ensure safe and effective
distribution of this important new product for the relief of  diabetes-related
pain.

Products
--------

Cold Remedy 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 of 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.

                                      -4-


<PAGE>



Health And Wellness Products
----------------------------

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
polynicotinate,   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.

Darius International,  Inc., a wholly owned subsidiary,  was formed in January
2000 for the purpose of introducing new products to the marketplace  through a
network of independent  distributors.  Darius is a direct selling organization
specializing  in  proprietary  health  and  wellness  products.  The  products
marketed  and sold by Darius  International  are designed to improve the human
condition, be it in the area of joint health,  immunity,  energy, pain, weight
loss or the common cold.  The products  currently  available  from Darius are:
Bodymate(TM)  Metabolizer,  Bodymate(TM)  Gluco-Eeze,  Ultra-Eeze,  Vita-Eeze,
Beta-Eeze,  Cold-Eezer(R) Plus, Cold-Eezer(R) Cinnamon Gum, Dermaloe first aid
antiseptic, Pain Goes pain spray, and Ardor dietary supplement.

Sun-care and Skin-care Products
-------------------------------

Caribbean Pacific Natural Products,  Inc., is a leading developer and marketer
of all-natural sun and skin care products for luxury resorts,  theme parks and
spas.

These products are all-natural,  eco-safe, and organic,  meaning that the need
for petro-chemical, synthetic, and chemical additives used by most competitors
has been eliminated. All-natural ingredients such as aloe, vera, rose hip oil,
squalane, Vitamin E, tea tree oil and other natural oils and extracts are used
instead of many synthetic preservatives,  fillers and softeners which may have
side-effects.

The Company currently has three distinct product lines:  Virgin Sol, Coral Sol
and Sport Sol and is  currently  developing  a spa line  called  Sabate  and a
dry-grip golf product.

The Company markets a line of natural protectors, or "Sol Cremes" that provide
dual  protection  against the  damaging  effects of the sun.  This  product is
available in differing Sun Protection  Factors (SPF). The Company also markets
a sunscreen  product called  "Karibbean Kidz"  especially for children,  again
containing all natural ingredients found in nature.

Additionally, the Company markets various products rich in essential nutrients
and vitamins necessary for the skin.  Products available in this category are:
Black Pearl Ultra Oil, Diamond Rose Dry Tanning Oil, Emerald Rose Tanning Oil.

Caribbean   Pacific  has  developed  an  effective   combination   of  natural
ingredients for moisture that include the Aloe Rose Body Creme, a moisturizing
lotion,  and the Tea Tree  Burn  Relief,  which  cools  the skin to sooth  the
discomfort associated with burns, insect bites and itching.

Caribbean  Pacific  also  has  the  capability  to make  available  customized
merchandise, such as beach bags, beach towels etc., which complement the range
of sun-care and skin-care products marketed and sold by Caribbean Pacific.

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
                                      -5-


<PAGE>

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. This patent and exclusive license will expire in March 2002.

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.

The  trademarks  and  formulations  for the natural skin care products sold by
Caribbean  Pacific  Natural  Products,  Inc.  are owned by  Caribbean  Pacific
International,  Inc., which has a 40% ownership  position in Caribbean Pacific
Natural  Products.  The trademarks and  formulations are assigned to Caribbean
Pacific  Natural  Products,  Inc. for a  twenty-five  year  period.  Caribbean
Pacific  Natural  Products pays Caribbean  Pacific  International a royalty of
five percent (5%) on sales collected less certain deductions,  for a four year
term, which terminates in May 2004.

In December 2000,  the Company  announced that the Patent Office of The United
States Commerce  Department had confirmed the Company's  filing and assignment
of a Patent  Application  for the  "Method  and  Composition  for the  Topical
Treatment of Diabetic Neuropathy".

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)  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 44%, 39%, and 38% of sales
consolidated  revenue for the years ended  December 31,  2000,  1999 and 1998,
respectively.

Darius International,  Inc., is a direct selling organization  specializing in
proprietary  health and wellness products and the introduction of new products
to the marketplace through a network of independent distributors.  This method
of  distribution  is in contrast to  traditional  distribution  channels using
independent  and chain drug and  discount  stores as  utilized  by The Quigley
Corporation in the promotion of the cold remedy products.

Caribbean  Pacific Natural Products are sold exclusively  through  partnership
marketing agreements at over 100 premier

                                      -6-

<PAGE>
resorts,  theme parks, and spas throughout the U.S., Mexico and the Caribbean.
They  include  Anheuser-Busch-Entertainment,  Biltmore,  Resort  Hyatt,  Loews
Portofino  (Universal  Studios),  Marriott,  Ritz Carlton,  Westin and Wyndham
resorts. In Mexico, Caribbean Pacific Natural Products has exclusive marketing
rights at such  Eco-archeological  Parks as Xcaret  and Xelha - which  attract
millions  of  visitors  each  year - as well as the  famed  Allegro  and Melia
resorts.

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

The Company's  research and development costs for the years ended December 31,
2000, 1999 and 1998,  were  $1,185,750,  $297,650 and $256,492,  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.
Clinical  studies and testing will be done in the  formulation of products for
diabetic use,  including  "diabetic-safe"  vitamins and  minerals,  as well as
products that are part of the Ethical  Pharmaceutical  Division established in
2001. Principally, the increase in research and development in 2000 was due to
expenses  incurred  as part of the  costs  related  to the  application  for a
pharmacy drug license in the United Kingdom.

With regard to the sun-care and skin-care products, the short-term emphasis is
on the Sport Dry Grip product to be introduced  by the second  quarter of 2001
to  the  resort  golf/tennis  market.  A  spa  line  is  being  developed  for
distribution within existing resort channels.

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
future results of operations could be materially  affected by the future costs
of  compliance,  management  believes  that the  future  costs will not have a
material  adverse  effect  on our  financial  position  or on our  competitive
position.

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.

The main  competition in the sun-care and skin-care  industry comes  primarily
from names such as Australian  Gold(R),  California  Tan(R),  Panama Jack(TM),
Hawaiian  Tropic(R),  Banana Boat(R) and Coppertone(R).  Each takes a somewhat
different  position in how they  promote  their  products.  Caribbean  Pacific
Natural Products' range of products are  distinguishable  from the competition
due to their all-natural and eco-friendly characteristic.

Employees
---------

At December 31, 2000 the Company employed 22 full-time persons,  primarily 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.  Additionally,  the  Orlando  location
includes  14  persons  that are  engaged  by the  Company  through  an outside
employer organization.






                                      -7-

<PAGE>


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,  they are 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.

Darius  International's  product for resale is sourced from several suppliers.
In the event that such sources  were no longer in a position to supply  Darius
International  with product  other  vendors have been  identified  as reliable
alternatives with minimal adverse loss of business.

Currently,  the  principal  finished  products  relating to Caribbean  Pacific
Natural Products are being manufactured and blended by a single vendor. In the
event of there being  difficulties with the current sources of raw material or
finished  product,  other  suppliers have been identified that may result in a
temporary delay in production.


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

During November 1999 the Company moved to its new executive office building at
621  Shady  Retreat  Road,  Doylestown,  PA.  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 at a monthly cost of $2,193.  This Nevada location has a
three-year  lease that  expires  in July 2003.  The  Company  also  stores its
product in four  additional  warehouses in  Pennsylvania  with storage charges
based upon the quantities of product being stored.  The Company  believes that
its existing warehousing facilities are adequate.

Caribbean  Pacific  Natural  Products is located at 5244 Carrier Drive,  Suite
309,  Orlando,  Florida,  covering a total area of approximately  5,100 square
feet.  The lease on the  premises  is for a period of five  years,  commencing
January  2001,  at a monthly  lease  cost of $6,193.  Additionally,  Caribbean
Pacific  Natural  Products is leasing  office  space in Hawaii and Mexico at a
monthly cost of $990 and $650 per month,  respectively,  both these leases are
for a one year period.


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

                               TESAURO AND ELEY

In September, 2000, the Company was sued by two individuals (Jason Tesauro and
Elizabeth Eley, both residents of Georgia),  on behalf of a "nationwide class"
of  "similarly  situated  individuals,"  in  the  Court  of  Common  Pleas  of
Philadelphia County,  Pennsylvania.  The Complaint alleges that the Plaintiffs
purchased certain Cold-Eeze products between August, 1996, and November, 1999,
based upon cable television, radio and internet advertisements which allegedly
misrepresented  the  qualities  and benefits of the  Company's  products.  The
Complaint  requests  an  unspecified  amount  of  damages  for  violations  of
Pennsylvania's   consumer  protection  law,  breach  of  warranty  and  unjust
enrichment,  as well as a judicial determination that the action be maintained
as a class action. In October,  2000, the Company filed Preliminary Objections
to the Complaint  seeking  dismissal of the action.  The Company believes that
the action lacks merit, is not suitable for class action certification and the
Company is vigorously  defending this lawsuit.  The Company  believes that the
plaintiffs'  claims  are  without  merit but  certain  pre-trial  motions  and
discovery  remains  incomplete and no prediction can be made as to the outcome
of this case.

                                      -8-

<PAGE>


                              GOLDBLUM AND WAYNE

A Special Meeting of the Quigley stockholders was held on October 15, 1999, at
which a majority of the shares  entitled to vote adopted a  Corrective  Action
Proposal (initially reported in the Company's Form 10-Q for the quarter ending
June 30, 1999) to ratify actions  previously  taken by the Company relating to
the 1990 1 for  2.74  reverse  split,  the 1995 1 for 10  reverse  split  (the
"Reverse  Splits") and the 1997 1 for 2 forward split (the  "Forward  Split").
Pursuant to the October 15, 1999 Special Meeting,  the Company  authorized the
filing  of  a  declaratory   judgment   action  in  Nevada  to  determine  the
effectiveness of the Corrective Action.

In August 2000, the District Court of Clark County,  Nevada,  held that it had
jurisdiction  to decide the  Company's  declaratory  judgment  action filed in
April,  2000,  against two  putative  shareholders  (Thomas  Goldblum and Alan
Wayne),  in which the  Company  seeks a judicial  declaration  that,  based on
stockholder approval of the Corrective Action Proposal, the Reverse Splits and
Forward   Split   satisfy   and/or   comply  with  Nevada  law  and  that  the
capitalization  of Quigley  evidenced by the issued and outstanding  shares of
common  stock and common stock  warrants is as  reflected  on Quigley's  stock
transfer ledger on September 10, 1999, the record date of the Special Meeting.
This action is in the early stages of  litigation,  and no  prediction  can be
made as to the outcome of this case.

An  underlying  claim filed by Goldblum and Wayne in the Court of Common Pleas
of  Montgomery  County,  Pennsylvania,  on March 17,  1996  alleging  that the
plaintiffs  became owners of 500,000 shares each of the Company's common stock
in or about 1990 and  requested  damages in excess of  $100,000  for breach of
contract and conversion.  The Company is vigorously defending this lawsuit and
has denied any liability to the plaintiffs. The Company also believes that the
plaintiffs' claims are barred by the applicable  statutes of limitations,  and
that the  plaintiffs  are, in any event,  limited to claims for  approximately
36,000 shares.  The Company  continues to believe that the plaintiffs'  claims
are without merit but certain pre-trial  discovery  remains  incomplete and no
prediction can be made as to the outcome of this case.


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

None
                                    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
                                              ------------

                                        2000              1999
                                    -------------     -------------
         Quarter Ended              High     Low      High      Low
         -------------              ----     ---      ----      ---

           March 31                $3.250   $1.500   $6.875    $4.906
           June 30                 $2.031   $1.125   $5.250    $4.688
           September 30            $1.969   $1.156   $5.938    $2.906
           December 31             $1.750   $0.656   $3.969    $1.563

Such quotations reflect  inter-dealer  prices,  without mark-up,  mark-down or
commission and may not represent actual transactions.


                                      -9-

<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, 2000, 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 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, 2000,  issued and outstanding  Common Stock Purchase  Warrants
and Options that are exercisable at the  price-per-share  stated and expire on
the date indicated, as follows:

  Description             Number           Exercise Price      Expiration Date
  -----------             ------           --------------      ---------------
  CLASS "E"             1,150,000            $1.7500            June 30, 2001
  CLASS "F"               225,000            $2.5000         November 4, 2001
  CLASS "G"               945,000           $10.0000              May 5, 2002
  Warrants                409,900            $1.7500       September 30, 2001
  Option Plan             521,500            $9.6800         December 1, 2007
  Option Plan             386,000            $5.1250            April 6, 2009
  Option Plan             100,000            $2.0625         January 13, 2010
  Option Plan             380,000            $0.8125        December 20, 2010

At December 31, 2000, there were 4,042,400  unexercised and vested options and
warrants of the  Company's  stock  available  for exercise  with an additional
75,000 options awarded which are subject to vesting requirements.


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, 1996,
(ii) the three  months  ended  December  31,  1996 and  (iii) the years  ended
December 31, 1997, 1998, 1999 and 2000.

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.








                                     -10-

<PAGE>

<TABLE>
<S>                     <C>             <C>         <C>           <C>           <C>             <C>

                                                                            Three Months
(Amounts in         Year  Ended   Year  Ended    Year  Ended   Year  Ended     Ended       Year Ended
 thousands, except  December 31,  December 31,   December 31,  December 31, December 31,  September 30,
 per share data)       2000          1999           1998          1997         1996           1996
                   ------------- -------------- ------------- ------------- ------------- --------------

Statement of Income
 Data:
Net Sales              $19,364      $24,820         $36,354       $70,173       $4,092       $1,050
Gross Profit            13,480       16,941          25,477        48,745        2,717          766
Net Income (Loss)       (5,196)      (4,204)          6,809        20,967        1,676         (694)

Basic earnings (loss)
 per common share       ($0.49)      ($0.37)          $0.51         $1.72        $0.15       ($0.08)
Diluted earnings (loss)
 per common share       ($0.49)      ($0.37)          $0.46         $1.43        $0.12       ($0.08)
Weighted average common
 shares outstanding:
     Basic              10,551       11,352          13,335        12,181       11,087        8,131
     Diluted            10,551       11,352          14,944        14,634       13,611        8,131


                       As of        As of           As of         As of        As of          As of
                    December 31,  December 31,   December 31,  December 31, December 31,  September 30,
                       2000          1999           1998          1997         1996           1996
                   ------------- -------------- ------------- ------------- ------------- --------------

Balance Sheet Data:
Working capital        $18,622      $23,621         $43,024       $41,141       $5,206         $911
Total assets            26,056       33,271          48,611        49,847        6,950        1,368
Stockholders' equity   $20,971      $26,216         $44,607       $41,748       $5,544       $1,243

</TABLE>


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

Overview
--------

The  Quigley   Corporation,   (the  Company),   headquartered  in  Doylestown,
Pennsylvania,  is a leading marketer and distributor of a diversified range of
health and homeopathic products.

The Company has  developed and markets the  Cold-Eeze(R)  range of products in
lozenge,  bubblegum and sugar-free tablet form.  Cold-Eeze(R) is the only zinc
gluconate  glycine  product  clinically  proven in two double blind studies to
reduce the severity and duration of common cold symptoms.  The efficacy of the
product was  established  following the publication of the second double blind
study in July  1996.  The  sugar-free  product  is  especially  beneficial  to
diabetics and other consumers concerned about their sugar intake.

Cold-Eeze(R)  is  distributed  through  numerous  independent,  chain drug and
discount stores throughout the United States.  These distribution methods have
seen  considerable  corporate  consolidation  in the recent  past,  which have
reduced the pipeline fill opportunities and many stores have also adopted just
in  time  inventory  systems,  thereby  reducing  the  lead-time  required  in
purchasing  product.  Many stores have now adopted  their store  private label
brand of zinc as an alternative to  Cold-Eeze(R).  However,  as these products
have no proven clinical efficacy consumers have become  disenchanted with zinc
products in general and this unfortunately lessens the credibility of a proven
product such as Cold-Eeze(R).


During  2000  advertising  costs were  approximately  $9,300,000  compared  to
$16,100,000 in 1999. While these expenses contributed substantially to the net
losses in both years,  2000 is reflective of the cost savings  attained during
the year.  The loss for 2000 is not tax  affected for the  potential  benefit,
which  cannot  be  reflected  until  the  Company  returns  to  profitability.
Therefore,  consistent  comparisons  for the  periods  reflect a loss,  before
income tax benefit, of ($5,196,473) for 2000 compared to a loss, before income
tax benefit, of ($6,106,400) for 1999.

                                     -11-

<PAGE>


During the second half of 2000, the Company has altered its advertising  focus
to  concentrate  its promotion of  Cold-Eeze(R)  at store level through shared
advertising  initiatives with our customers.  Prior  advertising and promotion
efforts  were largely  through the medium of  television  and radio.  Also the
Company has begun a program to inform and educate  the medical  profession  of
the benefits of using all natural Cold-Eeze(R) as an effective cold remedy.

The  Company  continues  to use the  resources  of  independent  national  and
international brokers to represent the Company's Cold-Eeze(R) products,  which
selling structure provides cost efficiencies that benefit the Company.

In January  2000,  the Company  formed  Darius  International,  Inc., a direct
selling organization specializing in proprietary health and wellness products.
Darius  International  was formed to implement  Company strategy as a means of
introducing new products to the marketplace through  alternative  distribution
channels by utilizing a network of independent distributors.

In July 2000,  the Company  acquired a 60%  ownership  position  in  Caribbean
Pacific Natural  Products Inc., an Orlando,  Florida based company.  Caribbean
Pacific  Natural  Products is a leading  developer and marketer of all-natural
sun and skin care products for luxury resorts, theme parks and spas. Caribbean
Pacific  Natural  Products  has  developed   markets  for  its  products  both
domestically and abroad.

Manufacturing for all the Company's  products is done by outside sources.  The
manufacturer of the Cold-Eeze(R) lozenge product manufactures  exclusively for
the Company,  with the bubblegum and the sugar-free products being produced by
different manufacturers.

The revenue for 2000 was  $19,364,186  compared to $24,819,942 and $36,354,186
for 1999 and 1998 respectively.  The decline in sales is largely accounted for
by the reduced Cold-Eeze(R) sales due to industry consolidation, store private
labeling of zinc  products,  the  reduction  in the  incidence of colds in the
fourth quarter of 2000.  However,  2000 has seen  contributions  to revenue of
$850,166 from Caribbean  Pacific  Natural  Products and Darius  International,
Inc., both of which are in their developmental phase.

During 2000, the Company  continued to make progress with the  registration of
the  Cold-Eeze(R)  products in the United  Kingdom and incurred  approximately
$900,000 in expense.

During 2000, the Company announced the selection of The Mentholatum Company as
the exclusive  Canadian  distributor  for the Company's  Cold-Eeze(R)  product
under the  Zigg-Eeze(TM)  brand name.  The  Mentholatum  Company  replaces the
previous  distributor  of the past two years.  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 People's Republic of China.

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.

Effect of Recent Accounting Pronouncements
------------------------------------------

In June 1998, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting  for Derivative
Instruments and Hedging Activities." SFAS No. 133, as amended by SFAS No. 138,
is effective  for fiscal  years  beginning  after June 15, 2000.  The standard
requires that all  derivative  instruments be recorded on the balance sheet at
fair value.  Changes in the fair value of derivatives are recorded in earnings
or other comprehensive  income,  based on whether the instrument is designated
as part of a hedge transaction and, if so, the type of hedge transaction.  The
adoptions  of this  pronouncement  will  not  have a  material  impact  on the
Company's financial statements

In December 1999, the Securities and Exchange  Commission ("SEC") issued Staff
Accounting  Bulletin No. 101 ("SAB 101"),  "Revenue  Recognition  in Financial
Statements".  The SAB  summarizes  certain of the  Staff's  views in  applying
generally  accepted  accounting  principles  to  revenue  recognition  in  the
financial  statements.  As the Company's  current revenue  recognition  policy
meets the  standards  set forth in SAB 101,  the Company  was not  required to
change its revenue recognition policy based on the interpretation of SAB 101.

                                     -12-

<PAGE>



In May 2000,  the  Emerging  Issues Task Force (EITF)  issued EITF No.  00-14,
"Accounting for Coupons,  Rebates and Discounts" that addressed accounting for
sales  incentives.  The Task Force concluded that in accounting for cash sales
incentives a  manufacturer  should  recognize  the incentive as a reduction of
revenue on the later date of the manufacturer's  sale or the date the offer is
made to the public.  The reduction of revenues should be measured based on the
estimated amount of incentives to be claimed by the ultimate  customers.  This
pronoumcement will be adopted in the first quarter of fiscal 2001.

In September 2000, the EITF reached a final consensus on issue EITF No. 00-10,
"Accounting  for  Shipping  and  Handling  Revenues and Costs." The Task Force
concluded  that amounts  billed to customers  related to shipping and handling
should be classified as revenue.  Further, the Task Force stated that shipping
and handling  cost related to this revenue  should either be recorded in costs
of goods sold or the Company  should  disclose  where these costs are recorded
and the amount of these  costs.  We adopted this  principle  during the fourth
quarter of fiscal year 2000. The adoption of this pronouncement did not have a
material impact on the Company's financial statements.

In March 2000, FASB  Interpretation,  or FIN, No. 44,  "Accounting for Certain
Transactions  Involving Stock  Compensation - An Interpretation of APB Opinion
No.  25," was  issued.  FIN 44  clarifies  the  application  of APB No. 25 for
certain  issues.  FIN 44 clarifies the  definition of employee for purposes of
applying APB No. 25, the criteria for determining  whether a plan qualifies as
a non-compensatory plan, the accounting  consequences of various modifications
to the terms of a previously  fixed option or award, and the accounting for an
exchange of share compensation awards in a business combination, among others.
FIN  44  was  effective   July  1,  2000  but  certain   conclusions  in  this
interpretation  cover specific  events that occurred after either December 15,
1998 or January  12,  2000.  FIN 44 did not have a  significant  effect on our
financial position or results of operations.

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

Twelve months ended December 31, 2000 compared with same period 1999
--------------------------------------------------------------------

Revenues for the year ended  December 31, 2000 were  $19,364,186,  which was a
decrease of 22% over 1999 revenues of  $24,819,186.  The net loss for 2000 was
($5,196,473) compared to a net loss in 1999 of ($4,203,785). The 1999 net loss
was reduced by a tax benefit of $1,902,615.  A tax benefit is not available in
2000 because of a net operating loss carry-forward for tax purposes.

2000 revenues  were  adversely  affected by changes in the industry.  Customer
consolidations  continued throughout the year which has the effect of reducing
the opportunities for pipeline fill. The industry consolidation has also meant
the adoption of  just-in-time  inventory  systems and as a result product lead
time has been lessened and inventories have been reduced.  Also the occurrence
of store private  labeling of zinc products  increased  during 2000, which has
not only the  effect of  greater  competition,  but  without  proven  clinical
efficacy these products  impact on the credibility of a proven product such as
Cold-Eeze(R).

Independent  data indicates that,  overall,  the 2000 cough/sore  throat drops
consumption  rate was  decreased by 9% over 1999,  due to less  incidences  of
colds and flues.

Revenues  from  Darius  International  Inc.,  and  Caribbean  Pacific  Natural
Products  contributed  $850,166,  both these  companies  are  largely in their
developmental stage.

The  Company's  cost of goods  sold  decreased  from 31.7% in 1999 to 30.4% in
2000.  The decrease in 2000 is  primarily  the result of shifts in the product
mix of sales. Bubblegum sales in 2000 represented a lesser percentage of sales
compared to 1999.  Additionally,  the margin associated with Caribbean Pacific
Natural Products,  which commenced  activity in July 2000, is higher than that
of the Cold-Eeze(R) products.

Selling,  general  and  administrative  expenses  for  2000  were  $18,228,880
compared to $23,630,663  in 1999. The decrease in 2000 is primarily  accounted
for by the  reduction in  television  and radio  advertising.  This reflects a
change to focus on shared  advertising  initiatives  with the  independent and
chain drug stores and wholesalers.  During 2000, the Company's major operating
expenses of delivery, salaries, brokerage commissions, promotion, advertising,
and legal

                                     -13-

<PAGE>


costs  accounted  for   approximately   $14,937,810  (82%)  of  the  total  of
$18,228,880 showing a decrease of 30% over the 1999 amount of $21,261,731. The
selling,  general and administrative expenses related to Darius International,
Inc., and Caribbean  Pacific  Natural  Products for 2000 were  $1,495,351 with
nothing comparable in 1999.

Research and Development  costs in 2000 and 1999 were $1,185,750 and $297,650,
respectively.  The increase in 2000 is primarily due to the expense associated
with  the  Cold-Eeze(R)  regulatory  process  being  conducted  in the  United
Kingdom.

Total assets of the Company at December 31, 2000 and 1999 were $26,055,601 and
$33,271,056,   respectively.   Working  capital  decreased  by  $4,998,542  to
$18,622,127  at  December  31,  2000.  The main  factors  contributing  to the
reduction was the loss incurred for the year of ($5,196,473)  with the related
reduction in accounts receivable and cash.

Twelve months ended December 31, 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 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, including  research  and  development,  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
$21,261,731 (89%) 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  stockholders'  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  having been 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

                                     -14-

<PAGE>

1998 and combined with the 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 was  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.

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,   changes  in  funds,  and  changes  in
paid-in-capital,  which  were  the  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.


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

The Company's  products are manufactured by outside  sources.  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
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 holders and the developer expire on
March 5, 2002 and May 4, 2007,  respectively  and with the founders on May 31,
2005.

The  trademarks  and  formulations  for the natural skin care products sold by
Caribbean  Pacific  Natural  Products,  Inc.  are owned by  Caribbean  Pacific
International,  Inc., which has a 40% ownership  position in Caribbean Pacific
Natural  Products.  The  trademarks  and  formulations  rights are assigned to
Caribbean  Pacific  Natural  Products,  Inc.  for a  twenty-five  year period.
Caribbean  Pacific  Natural  Products pays Caribbean  Pacific  International a
royalty of five percent (5%) on sales collected less certain deductions, which
terminates in May 2004.

The  Company has  committed  to  advertising  costs  approximating  $2,200,000
relating to 2001.  Additional  advertising cost is expected to be incurred for
the remainder of 2001.







                                     -15-

<PAGE>


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

The Company had working capital of $18,622,127 and $23,620,669 at December 31,
2000  and  1999,  respectively.  The  decrease  in  working  capital  is  due,
primarily, to the net loss for the year and the resultant decrease in accounts
receivable and cash. Total cash balances at December 31, 2000 were $11,365,843
as compared to $13,990,475 at December 31, 1999.

Management believes that its new revised strategy to establish Cold-Eeze(R) as
a  recognized  brand  name,  its  broader  range of  products,  newly  adopted
diversified  distribution methods,  adequate manufacturing  capacity,  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.

During 2000 the  Company  repurchased  a total of 134,400  shares at a cost of
$113,444.

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.

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

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





                                     -16-

<PAGE>


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


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                                Page
                                                                          ----

Balance Sheets as of December 31, 2000 and 1999                            F-1

Statements of Operations for the years ended
 December 31, 2000, 1999, and 1998                                         F-2

Statements of Stockholders' Equity for the years ended
 December 31, 2000, 1999, and 1998                                         F-3

Statements of Cash Flows for the years ended
 December 31, 2000, 1999, and 1998                                  F-4 to F-5

Notes to Financial Statements                                      F-6 to F-18

Responsibility for Financial Statements                                   F-19

Report of Independent Accountants                                         F-20





                                     -17-

<PAGE>


<TABLE>
<S>                                                               <C>                 <C>

                                            THE QUIGLEY CORPORATION
                                          CONSOLIDATED BALANCE SHEETS

                            ASSETS                             December 31, 2000    December 31, 1999
                                                               -----------------    -----------------
CURRENT ASSETS:

  Cash and cash equivalents                                        $11,365,843         $13,990,475
  Accounts receivable (less doubtful accounts
   of $536,297 and $239,065)                                         4,062,703           6,639,687
  Inventory                                                          6,917,889           6,170,005
  Prepaid income taxes                                                    -              2,485,247
  Prepaid expenses and other current assets                          1,123,275           1,390,702
                                                             -------------------   -----------------
      TOTAL CURRENT ASSETS                                          23,469,710          30,676,116
                                                             -------------------   -----------------

PROPERTY, PLANT AND EQUIPMENT - net                                  2,139,727           1,943,313
                                                             -------------------   -----------------

OTHER ASSETS:

  Patent rights - Less accumulated amortization                        109,702             197,463
  Excess cost over net assets acquired                                 329,166                -
  Other assets                                                           7,296             454,164
                                                             -------------------   -----------------
      TOTAL OTHER ASSETS                                               446,164             651,627
                                                             -------------------   -----------------

TOTAL ASSETS                                                       $26,055,601         $33,271,056
                                                             ===================   =================

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

  Accounts payable                                                    $763,527            $395,778
  Accrued royalties and sales commissions                            1,449,642           1,722,715
  Accrued advertising                                                1,737,873           4,523,901
  Other current liabilities                                            896,541             413,053
                                                            --------------------  -----------------
      TOTAL CURRENT LIABILITIES                                      4,847,583           7,055,447
                                                            --------------------  -----------------

COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST IN CONSOLIDATED AFFILIATES                           237,326                -
                                                            --------------------  -----------------

STOCKHOLDERS' EQUITY:

  Common stock, $.0005 par value;authorized 50,000,000;
   Issued: 15,271,206 and 14,831,384 shares                              7,636               7,415
  Additional paid-in-capital                                        28,871,887          28,807,108
  Retained earnings                                                 17,249,197          22,445,670
  Less: Treasury stock, 4,616,053 and 4,481,653 shares,
   at cost                                                         (25,158,028)        (25,044,584)
                                                            --------------------  -----------------
      TOTAL STOCKHOLDERS' EQUITY                                    20,970,692          26,215,609
                                                            --------------------  -----------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $26,055,601         $33,271,056
                                                            ====================  =================

</TABLE>

                          See accompanying notes to financial statements
                                               F-1


<PAGE>


<TABLE>
<S>                                          <C>                    <C>              <C>


                                     THE QUIGLEY CORPORATION
                              CONSOLIDATED STATEMENTS OF OPERATIONS


                                              Year Ended          Year Ended         Year Ended
                                           December 31, 2000   December 31, 1999  December 31, 1998
                                           -----------------   -----------------  -----------------

NET SALES                                    $19,364,186          $24,819,942        $36,354,155
                                           ------------------   -----------------  -----------------

COST OF SALES                                  5,884,592            7,879,303         10,877,594
                                           ------------------   -----------------  -----------------

GROSS PROFIT                                  13,479,594           16,940,639         25,476,561
                                           ------------------   -----------------  -----------------



OPERATING EXPENSES:
  Sales and marketing                         12,012,370           17,938,002         10,476,030
  Administration                               6,216,510            5,692,661          5,030,076
  Research and Development                     1,185,750              297,650            256,492
                                           ------------------   -----------------  -----------------
TOTAL OPERATING EXPENSES                      19,414,630           23,928,313         15,762,598
                                           ------------------   -----------------  -----------------

INCOME (LOSS)FROM OPERATIONS                  (5,935,036)          (6,987,674)         9,713,963

INTEREST INCOME                                  646,723              881,274          1,449,194
                                           ------------------   -----------------  -----------------

INCOME (LOSS) BEFORE TAXES                    (5,288,313)          (6,106,400)        11,163,157
                                           ------------------   -----------------  -----------------

INCOME TAXES EXPENSE (BENEFIT)                       -             (1,902,615)         4,353,631

MINORITY INTEREST IN LOSS OF
 CONSOLIDATED AFFILIATE                          (91,840)             -                  -
                                           ------------------   -----------------  -----------------

NET INCOME (LOSS)                            ($5,196,473)         ($4,203,785)        $6,809,526
                                           ==================   =================  =================


Earnings (Loss) per common share:

      Basic                                       ($0.49)              ($0.37)             $0.51
                                           ==================   =================  =================

      Diluted                                     ($0.49)              ($0.37)             $0.46
                                           ==================   =================  =================



Weighted average common shares outstanding:

      Basic                                   10,551,027           11,351,960         13,334,684
                                           ==================   =================  =================

      Diluted                                 10,551,027           11,351,960         14,944,172
                                           ==================   =================  =================



</TABLE>




                          See accompanying notes to financial statements
                                               F-2

<PAGE>

<TABLE>
<S>                            <C>        <C>          <C>         <C>           <C>         <C>

                                                     THE QUIGLEY CORPORATION
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


                              Common               Additional
                              Stock      Issued     Paid-in-     Treasury      Retained
                              Shares     Amount      Capital       Stock       Earnings      Total
                             ---------------------------------------------------------------------------

Balance January 1, 1998      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
                             ---------------------------------------------------------------------------

Treasury stock                 (134,400)                          (113,444)                   (113,444)

Tax benefits from options,
  warrants & common stock                             230,998                                  230,998

Tax valuation allowance                              (230,998)                                (230,998)

Proceeds from options and
  warrants exercised            439,822     221        64,779                                   65,000

Net loss year ended
  December 31, 2000                                                            (5,196,473)  (5,196,473)
                             ---------------------------------------------------------------------------

Balance December 31, 2000    10,655,153  $7,636   $28,871,887 ($25,158,028)   $17,249,197  $20,970,692
                             ===========================================================================

</TABLE>


                          See accompanying notes to financial statements
                                               F-3

<PAGE>

<TABLE>
<S>                                                <C>                 <C>                <C>



                                    THE QUIGLEY CORPORATION
                               CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                    Year Ended         Year Ended         Year Ended
                                                   December 31,       December 31,       December 31,
                                                      2000               1999               1998
                                                 ---------------    --------------     --------------

OPERATING ACTIVITIES:
Net income (loss)                                  ($5,196,473)      ($4,203,785)        $6,809,526
                                                 ---------------    --------------     --------------
Adjustment to reconcile net income (loss) to
 net cash provided by operations:
 Depreciation and amortization                         364,924           229,812            206,640
 Expenditure paid with common stock                         -            202,975            981,785
 Minority interest share of loss in consolidated
  subsidiary                                           (91,840)             -                   -
 Deferred income taxes                                      -            397,489            193,756
 Other                                                 446,868              -                   -
 (Increase) decrease in assets:
   Accounts receivable                               2,576,984           935,679          3,276,207
   Inventory                                          (515,069)          352,607          1,204,145
   Prepaid expenses and other current assets           267,427            41,422           (621,471)
   Prepaid income taxes                              2,485,247            80,074            982,736
 Increase (decrease) in liabilities:
   Accounts payable                                    367,749          (362,255)          (357,587)
   Accrued royalties and sales commissions            (273,073)         (362,731)        (2,645,410)
   Accrued advertising                              (2,786,028)        3,962,635            358,510
   Accrued freight                                        -               67,181           (431,495)
   Other current liabilities                           483,488           (79,939)        (1,009,923)
                                                 ---------------    --------------     --------------

       Total adjustments                             3,326,677         5,464,949          2,137,893
                                                 ---------------    --------------     --------------


NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES                                (1,869,796)        1,261,164          8,947,419
                                                 ----------------   --------------     --------------

CASH FLOWS USED IN INVESTING ACTIVITIES:
 Capital expenditures                                 (393,477)       (1,043,978)          (998,075)
 Net cost of assets acquired                          (312,915)             -                   -
 Other assets                                             -             (197,782)          (184,086)
                                                 ----------------   --------------     --------------

NET CASH FLOWS USED IN INVESTING ACTIVITIES           (706,392)       (1,241,760)        (1,182,161)
                                                 ----------------   --------------     --------------

CASH FLOWS FROM
FINANCING ACTIVITIES:
 Tax benefits from stock options, warrants & stock       -                  -             3,512,205
 Proceeds from exercises of options and warrants        65,000           427,499            666,976
 Repurchase of common stock                           (113,444)      (14,788,193)        (9,111,033)
                                                 ----------------   --------------     --------------

NET CASH FLOWS FROM FINANCING ACTIVITIES               (48,444)      (14,360,694)        (4,931,852)
                                                 ----------------   --------------     --------------

NET INCREASE (DECREASE) IN CASH                     (2,624,632)      (14,341,290)         2,833,406

CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD        13,990,475        28,331,765         25,498,359
                                                 ----------------   --------------     --------------

CASH & CASH EQUIVALENTS, END OF PERIOD             $11,365,843       $13,990,475        $28,331,765
                                                 ================   ==============     ==============
</TABLE>

                          See accompanying notes to financial statements
                                               F-4

<PAGE>

<TABLE>
<S>                                              <C>                 <C>                 <C>


                                    THE QUIGLEY CORPORATION
                         CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)


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



                                                    Year Ended        Year Ended        Year Ended
                                                   December 31,      December 31,      December 31,
                                                      2000              1999               1998
                                                        $                 $                  $
                                                   ------------------------------------------------

Income taxes paid                                         -                 -               283,669
---------------------------------------------------------------------------------------------------



</TABLE>













                          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 Company's  products
is  seasonal,  where the first and fourth  quarters  generally  represent  the
largest sales volume.

Darius  International,   Inc.,  a  wholly  owned  subsidiary  specializing  in
proprietary  health and wellness  products was formed in 2000 to introduce new
products to the  marketplace  through a network of direct selling  independent
distributors.

During  2000,  The Company  acquired a 60%  ownership  position  in  Caribbean
Pacific Natural  Products Inc.,  which is a leading  developer and marketer of
all-natural  sun and skin care  products for luxury  resorts,  theme parks and
spas.


Basis of Presentation

The  consolidated  financial  Statements  include the  accounts of The Quigley
Corporation and its wholly and majority owned subsidiaries.  All inter-company
transactions and balances have been eliminated.

Effective July 1, 2000, the Company acquired a 60 percent  ownership  position
of Caribbean  Pacific Natural  Products,  Inc.,  which is accounted for by the
purchase method of accounting and accordingly, the operating results have been
included in the Company's  consolidated  financial Statements from the date of
acquisition.  This majority ownership position required a cash investment that
approximated  $812,000  and the provision  for a  $1 million  line of  credit,
secured by inventory,  accounts  receivable  and all other assets of Caribbean
Pacific Natural Products. The net assets of Caribbean Pacific Natural Products
at the  acquisition  date  principally  consisted  of a  product  license  and
distribution  rights with no recorded  value,  inventory  and fixed  assets of
$312,915  and  $510,000 of working  capital  with a  contribution  to minority
interest of $329,166.

The 40 percent  ownership  position  representing  the  minority  interest  is
reflected in the  consolidated  Statements of Operations  for their portion of
(losses),  and the consolidated  Balance Sheet for their ownership  portion of
accumulated  (losses),  share of net assets and capital  stock at  acquisition
date.


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.

                                      F-6

<PAGE>


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;  and  furniture  and
fixtures - seven years.

Patent Rights and Intangibles

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,  2000,  December  31,  1999,  and
December  31,  1998,  were  $87,761,   $87,761,   and  $87,762   respectively.
Accumulated amortization at December 31, 2000, December 31, 1999, and December
31, 1998, is $380,299, $292,538, and $204,777, respectively.

The  excess  of  cost  over  net  assets  acquired  is  being  amortized  on a
straight-line basis over a period of 15 years.

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.

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 44%
for the year ended  December  31,  2000,  39% for the year ended  December 31,
1999, and 38% for the year ended December 31, 1998. During 2000, approximately
95% 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.

Darius  International's  product for resale is sourced from several suppliers.
In the event that such sources  were no longer in a position to supply  Darius
International  with product  other  vendors have been  identified  as reliable
alternatives with minimal adverse loss of business.

Currently,  the  principal  finished  products  relating to Caribbean  Pacific
Natural Products are being manufactured and blended by a single vendor. In the
event of there being  difficulties with the current sources of raw material or
finished  product,  other  suppliers have been identified that may result in a
temporary delay in production.

                                      F-7

<PAGE>


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 Statement of Operations.

Revenue Recognition

Sales are  primarily  recognized  at the time a shipment  is  received  by the
customer.  Provisions for estimated  product returns are accrued in the period
of sale recognition.  In December 1999, the Securities and Exchange Commission
("SEC")  issued  Staff  Accounting  Bulletin  No.  101 ("SAB  101"),  "Revenue
Recognition  in  Financial  Statements".  The SAB  summarizes  certain  of the
Staff's views in applying generally accepted accounting  principles to revenue
recognition  in the financial  statements.  As the Company's  current  revenue
recognition  policy meets the  standards set forth in SAB 101, the Company was
not  required  to  change  its  revenue   recognition   policy  based  on  the
interpretation of SAB 101.

Derivative Instruments and Hedging Activities

In June 1998, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting  for Derivative
Instruments and Hedging Activities." SFAS No. 133, as amended by SFAS No. 138,
is effective  for fiscal  years  beginning  after June 15, 2000.  The standard
requires that all  derivative  instruments be recorded on the balance sheet at
fair value.  Changes in the fair value of derivatives are recorded in earnings
or other comprehensive  income,  based on whether the instrument is designated
as part of a hedge transaction and, if so, the type of hedge transaction.  The
adoption  of  this  pronouncement  will  not  have a  material  impact  on the
Company's financial statements.

Coupons, Rebates and Discounts

In May 2000, the Emerging  Issues Task Force  ("EITF")  issued EITF No. 00-14,
"Accounting for Coupons,  Rebates and Discounts" that addressed accounting for
sales  incentives.  The Task Force concluded that in accounting for cash sales
incentives a  manufacturer  should  recognize  the incentive as a reduction of
revenue on the later date of the manufacturer's  sale or the date the offer is
made to the public.  The reduction of revenues should be measured based on the
estimated amount of incentives to be claimed by the ultimate  customers.  This
pronouncement will be adopted in the first quarter of fiscal 2001.

Shipping and Handling

In September  2000, the Emerging  Issues Task Force  ("EITF")  reached a final
consensus  on issue EITF No.  00-10,  "Accounting  for  Shipping  and Handling
Revenues and Costs." The Task Force concluded that amounts billed to customers
related to shipping and handling should be classified as revenue. Further, the
Task Force  stated that  shipping  and  handling  cost related to this revenue
should  either  be  recorded  in  costs of goods  sold or the  Company  should
disclose  where these costs are  recorded  and the amount of these  costs.  We
adopted  this  principle  during the fourth  quarter of fiscal year 2000.  The
adoption of this pronouncement did not have a material impact on the Company's
financial statements.

Stock Compensation

In March 2000, FASB  Interpretation,  or FIN, No. 44,  "Accounting for Certain
Transactions  Involving Stock  Compensation - An Interpretation of APB Opinion
No.  25," was  issued.  FIN 44  clarifies  the  application  of APB No. 25 for
certain  issues.  FIN 44 clarifies the  definition of employee for purposes of
applying APB No. 25, the criteria for determining  whether a plan qualifies as
a non-compensatory plan, the accounting  consequences of various modifications
to the terms of a previously  fixed option or award, and the accounting for an
exchange of share compensation awards in a business combination, among others.
FIN  44  was  effective   July  1,  2000  but  certain   conclusions  in  this
interpretaion  cover  specific  events that occured after either  December 15,
1998 or January  12,  2000.  FIN 44 did not have a  significant  effect on the
Company's financial position or results of operations.

                                     F-8
<PAGE>


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  costs  incurred  for the year ended  December  31, 2000,
December 31, 1999 and December 31, 1998,  were  $9,296,483,  $16,132,888,  and
$9,221,225,  respectively.  Included  in prepaid  expenses  and other  current
assets were $419,000 and $448,908 at December 31, 2000 and 1999, 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,  2000,  December 31, 1999 and
December  31, 1998 were  $1,185,750,  $297,650,  and  $256,492,  respectively.
Principally  the  increase  of  Research  and  Development  in 2000 was due to
expenses  incurred  as part  of the  cost  related  to the  application  for a
pharmacy drug license in the United Kingdom.

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.


NOTE 2 - SEGMENT INFORMATION

The basis for presenting  segment results generally is consistent with overall
Company   reporting.   The  primary  difference  relates  to  presentation  of
partially-owned  operations,  which  are  presented  as if  owned  100% in the
operating segments. The adjustment to ownership basis is included in Corporate
& Other. In the third quarter of 2000, the Company qualified for the Financial
Accounting Standard Board Statement No. 131,  "Disclosure About Segments of an
Enterprise and Related Information" which establishes  standards for reporting
information about a company's operating segments.

The Company has divided its operations  into three  reportable  segments:  The
Quigley  Corporation,  whose main product is Cold-Eeze(R),  a proprietary zinc
gluconate  glycine lozenge for the common cold;  Darius  International,  Inc.,
whose  business  is the sale and  direct  marketing  of a range of health  and
wellness  products and Caribbean  Pacific  Natural  Products,  Inc., a leading
developer  and marketer of  all-natural  sun and skin care products for luxury
resorts, theme parks and spas.

Financial information by business segment follows:
<TABLE>
<S>                       <C>             <C>            <C>         <C>        <C>

-------------------------------------------------------------------------------------------
                                                      Caribbean
                                                       Pacific
As of and for the                       Darius         Natural
three months ended    The Quigley    International    Products,     Corporate
December 31, 2000     Corporation        Inc.            Inc.       and Other        Total
--------------------------------------------------------------------------------------------

Revenues
 Customers            $7,216,901       $11,811        $455,348          -         $7,684,060
 Inter-segment             3,486          -               -          ($3,486)           -
Segment operating
 profit (loss)           360,515      (173,335)       (152,065)          648          35,763
Total Assets         $27,005,069      $428,210        $769,202   ($2,146,880)    $26,055,601


                                     F-9
<PAGE>

--------------------------------------------------------------------------------------------
                                                      Caribbean
                                                       Pacific
As of and for the                       Darius         Natural
twelve months ended   The Quigley    International    Products,     Corporate
December 31, 2000     Corporation       Inc.             Inc.       and Other        Total
--------------------------------------------------------------------------------------------

Revenues
 Customers           $18,514,020       $51,300        $798,866          -        $19,364,186
 Inter-segment           320,623          -               -        ($320,623)           -
Segment operating
 profit (loss)        (4,645,828)     (936,534)       (229,600)     (123,075)     (5,935,037)
Total Assets         $27,005,069      $428,210        $769,202   ($2,146,880)    $26,055,601

</TABLE>

NOTE 3 - 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 4 - PROPERTY, PLANT AND EQUIPMENT

Consisted of the following as of:    December 31, 2000       December 31, 1999
                                     -----------------       -----------------

   Land                                    $152,203              $152,203
   Buildings and improvements             1,515,090             1,415,771
   Machinery and equipment                  669,401               528,322
   Computer software                        122,715                48,638
   Furniture and fixtures                   200,648               113,746
                                      -----------------     ------------------
                                          2,660,057             2,258,680
   Less: Accumulated  depreciation          520,330               315,367
                                      -----------------     ------------------
   Property, Plant and Equipment, net    $2,139,727            $1,943,313
                                      =================     ==================




Depreciation  expense for the years ended December 31, 2000, December 31, 1999
and December 31, 1998 was $277,163, $142,051, and $118,878, respectively.

NOTE 5 - PATENT RIGHTS AND RELATED ROYALTY COMMITMENTS

During 1996, the parent 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 that 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  trademarks  and  formulations  for the natural skin care products sold by
Caribbean  Pacific  Natural  Products,  Inc.  are

                                     F-10
<PAGE>

owned by Caribbean  Pacific  International,  Inc.,  which has a 40%  ownership
position in Caribbean Pacific Natural Products. The trademark and formulations
are assigned to Caribbean  Pacific  Natural  Products,  Inc. for a twenty-five
year  period.  Caribbean  Pacific  Natural  Products  pays  Caribbean  Pacific
International  a royalty of five percent (5%) on sales  collected less certain
deductions for a four-year term, which terminates in May 2004.

The expenses for the respective  periods relating to such agreements  amounted
to $1,992,497,  $2,638,727,  and $3,784,340,  for the years ended December 31,
2000,  December 31, 1999, and December 31, 1998 respectively.  Amounts accrued
for these expenses at December 31, 2000 and December 31, 1999 were  $1,037,610
and $1,337,193, respectively.


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,
                             2000                 1999                1998
                        --------------      ---------------     --------------
    Current:
      Federal                 -               ($1,181,327)          $3,537,579
      State                   -                      -                 622,296
                        --------------      ---------------     --------------
                              -                (1,181,327)           4,159,875
                        --------------      ---------------     --------------
    Deferred:
      Federal             ($1,701,186)         (1,285,077)             163,147
      State                  (223,095)           (605,998)              30,609
                        --------------      ---------------     --------------
                           (1,924,281)         (1,891,075)             193,756
                        --------------      ---------------     --------------

    Valuation allowance     1,924,281           1,169,787                 -
                        --------------      ---------------     --------------

    Total                     -               ($1,902,615)          $4,353,631
                        ==============      ===============     ==============

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,
                            2000                 1999                1998
                         --------------      ---------------     -------------

  Statutory rate          ($1,798,027)        ($2,076,176)         $3,907,105
  State taxes net
   of federal benefit        (148,804)           (403,022)            446,526
  Permanent differences
   and Other                   22,550            (593,204)               -
                         --------------      ---------------     -------------
                           (1,924,281)         (3,072,402)          4,353,631
                         --------------      ---------------     -------------

  Less valuation
   allowance                1,924,281           1,169,787                -
                         --------------      ---------------     -------------

  Total                           -           ($1,902,615)         $4,353,631
                         ==============      ===============     =============

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,
                            2000                 1999                1998
                         --------------      ---------------     -------------
  Net operating loss
   carry-forward           $3,730,923          $1,751,199                -
  Contract termination
   costs                      378,555             378,555            $378,554
  Bad debt expense            196,879              54,164                -
  Other                       137,488             104,648              18,935
  Valuation allowance      (4,443,845)         (2,288,566)               -
                         ---------------     ---------------     -------------
        Total                    -                   -               $397,489
                         ===============     ===============     =============
                                      F-11


<PAGE>

Certain  exercises of options and warrants,  and  restricted  stock issued for
services that became  unrestricted  resulted in reductions to taxes  currently
payable and a corresponding  increase to  additional-paid-in-capital  totaling
zero,  zero, and  $3,512,205 for the years ended December 31, 2000,  1999, and
1998,  respectively.  The tax benefit  effect of option and warrant  exercises
during 2000 and 1999 were $230,998 and $697,208, respectively.  However, these
benefits were 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 $8.8 million
for federal purposes,  of which $3.5 million will expire in 2019, $5.3 million
in 2020 and $13.0  million  for state  purposes,  of which $9.7  million  will
expire in 2009,  $3.3  million in 2010.  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.


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):
<TABLE>
<S>                <C>    <C>    <C>            <C>     <C>     <C>           <C>      <C>     <C>

                        Year Ended                   Year Ended                   Year Ended
                    December 31, 2000            December 31, 1999            December 31, 1998
                -----------------------------------------------------------------------------------

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

 Basic EPS      ($5.2)   10.5   ($0.49)      ($4.2)   11.4   ($0.37)         $6.8     13.3    $0.51

 Dilutives:
 Options and
 Warrants          -       -                    -       -                      -       1.6
                -----------------------------------------------------------------------------------

 Diluted EPS    ($5.2)   10.5   ($0.49)      ($4.2)   11.4   ($0.37)         $6.8     14.9    $0.46
               ====================================================================================
</TABLE>

At December 31, 2000, there were 4,117,400  options and warrants  outstanding.
Their impact on future  diluted  earnings per share is dependent on the market
price of the Company's common stock.


                                     F-12
<PAGE>

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 480,000,  409,000 and 550,500 options were granted under this
Plan during the years ended December 31, 2000,  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, 2000,
December 31, 1999 and December 31, 1998,  had been  determined  under the fair
value method of Statement of Financial  Accounting  Standards  (SFAS) 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,
                               2000               1999               1998
                           -------------      -------------      -------------
    Pro forma net income
    (loss)                  ($5,434,223)       ($5,246,735)       $5,339,691

    Pro forma earnings
    (loss) per share:
    Basic                        ($0.52)            ($0.46)           $0.40
    Diluted                      ($0.52)            ($0.46)           $0.36



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 ranging between 92.8% and 110% for
the year  ended  December  31,  2000 and 59.5%  and 29.0% for the years  ended
December 31, 1999 and 1998, respectively; expected dividend yield of 1.5%; and
risk-free interest rate of between 4.94% and 6.59% for the year ended December
31, 2000;  expected  dividend  yield of 1.5%;  and risk-free  interest rate of
5.10% 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,
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,  with the exception of an amount totaling 100,000 options awarded which
are subject to vesting  requirements,  75,000 of which  remain to be vested at
December 31, 2000.

A summary of the status of the Company's stock options and warrants granted to
both employees and  non-employees  as of December 31, 2000, 1999, and 1998 and
changes during the years then ended is presented below:

                                     F-13

<PAGE>

Year Ended December 31, 2000:
<TABLE>
<S>                                    <C>      <C>        <C>       <C>        <C>        <C>

                                          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              2,799      $4.590      1,480      $5.140      4,279      $4.780
Additions/deductions:
 Granted                                440       1.100         40       0.812        480       1.070
 Exercised                              460       0.500        130       0.500        590       0.500
 Cancelled                               32       7.829         20       7.402         52       7.665
                                    -----------------------------------------------------------------
Options/warrants outstanding          2,747      $4.680      1,370      $5.418      4,117      $4.926
 at end of period                   -----------------------------------------------------------------
Options/warrants exercisable
 at end of period                     2,747                  1,370                  4,117
                                    =================================================================

Weighted average fair value
 of Grants                            $0.69                     $0.55                     $0.68
Price range of  options/
 warrants exercised                   $0.50                     $0.50                     $0.50
Price range of options/
 warrants outstanding               $0.812-$10.00             $0.812-$10.00            $0.812-$10.00
Price range of options/
 warrants exercisable               $0.812-$10.00             $0.812-$10.00            $0.812-$10.00

</TABLE>

Year Ended December 31,1999:

<TABLE>
<S>                                    <C>       <C>        <C>        <C>          <C>        <C>

                                          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              2,560       $4.27      1,790       $4.55      4,350       $4.39
Additions/deductions:
 Granted                                389        5.13         20        5.13        409        5.13
 Exercised                              150        0.50        330        1.93        480        1.48
                                    -----------------------------------------------------------------
Options/warrants outstanding          2,799       $4.59      1,480       $5.14      4,279       $4.78
 at end of period                   -----------------------------------------------------------------
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-14


<PAGE>


Year Ended December 31, 1998:

<TABLE>
<S>                                    <C>       <C>         <C>       <C>         <C>        <C>

                                          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              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          2,560       $4.27      1,790       $4.55      4,350       $4.39
 at end of period                   -----------------------------------------------------------------
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

</TABLE>

The following table summarizes information about stock options outstanding and
stock options exercisable, as granted to both employees and non-employees,  at
December 31, 2000:

<TABLE>

<S>     <C>      <C>            <C>            <C>              <C>           <C>         <C>

                             Employees                                  Non-Employees
                             ---------                                  -------------

                             Weighted                                     Weighted
                              Average                                      Average
    Range of                Remaining      Weighted                      Remaining      Weighted
    Exercise      Number   Contractual     Average          Number      Contractual      Average
     Prices    Outstanding     Life      Exercise Price   Outstanding      Life       Exercise Price
-----------------------------------------------------------------------------------------------------

 $0.81 - $2.06    1,290,000      3.7         $1.53            749,900          1.1         $1.70
 $2.50 - $5.12      601,000      5.5         $4.14             10,000          8.3         $5.12
 $9.68 - $10.00     856,500      4.7         $9.81            610,000          1.4         $9.99

                --------------                           -----------------
                  2,747,500                                  1,369,900
                ==============                           =================
</TABLE>

Options  outstanding as of December 31, 2000,  December 31, 1999, and December
31, 1998, expire from June 30, 2000, through December 20, 2010, 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 2000 was approximately $119,000.

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


                                     F-15

<PAGE>

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 five occasions,  for a total
authorized  buy-back of 5,000,000 shares or approximately  38% 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
until December 31, 2000,  4,129,191  shares have been repurchased at a cost of
$24,012,670 or an average cost of $5.82 per share.

As a result of the litigation  relating to the case against  Nutritional Foods
Corporation  , 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.

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.

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.

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,  2000,
December 31, 1999, and December 31, 1998, of $148,041,  $137,015, and $153,594
respectively.  The future  minimum  lease  obligations  under these  operating
leases are $459,230.

The  Company has  committed  to  advertising  costs  approximating  $2,200,000
relating to 2001.  Additional  advertising cost is expected to be incurred for
the remainder of 2001.

                                     F-16

<PAGE>


In September, 2000, the Company was sued by two individuals (Jason Tesauro and
Elizabeth Eley, both residents of Georgia),  on behalf of a "nationwide class"
of  "similarly  situated  individuals,"  in  the  Court  of  Common  Pleas  of
Philadelphia County,  Pennsylvania.  The Complaint alleges that the Plaintiffs
purchased certain Cold-Eeze products between August, 1996, and November, 1999,
based upon cable television, radio and internet advertisements which allegedly
misrepresented  the  qualities  and benefits of the  Company's  products.  The
Complaint  requests  an  unspecified  amount  of  damages  for  violations  of
Pennsylvania's   consumer  protection  law,  breach  of  warranty  and  unjust
enrichment,  as well as a judicial determination that the action be maintained
as a class action. In October,  2000, the Company filed Preliminary Objections
to the Complaint  seeking  dismissal of the action.  The Company believes that
the action lacks merit, is not suitable for class action certification and the
Company is vigorously  defending this lawsuit.  The Company  believes that the
plaintiffs'  claims  are  without  merit but  certain  pre-trial  motions  and
discovery  remains  incomplete and no prediction can be made as to the outcome
of this case.

A Special Meeting of the Quigley stockholders was held on October 15, 1999, at
which a majority of the shares  entitled to vote adopted a  Corrective  Action
Proposal (initially reported in the Company's Form 10-Q for the quarter ending
June 30, 1999) to ratify actions  previously  taken by the Company relating to
the 1990 1 for  2.74  reverse  split,  the 1995 1 for 10  reverse  split  (the
"Reverse  Splits") and the 1997 1 for 2 forward split (the  "Forward  Split").
Pursuant to the October 15, 1999 Special Meeting,  the Company  authorized the
filing  of  a  declaratory   judgment   action  in  Nevada  to  determine  the
effectiveness of the Corrective Action.

In August 2000, the District Court of Clark County,  Nevada,  held that it had
jurisdiction  to decide the  Company's  declaratory  judgment  action filed in
April,  2000,  against two  putative  shareholders  (Thomas  Goldblum and Alan
Wayne),  in which the  Company  seeks a judicial  declaration  that,  based on
stockholder approval of the Corrective Action Proposal, the Reverse Splits and
Forward   Split   satisfy   and/or   comply  with  Nevada  law  and  that  the
capitalization  of Quigley  evidenced by the issued and outstanding  shares of
common  stock and common stock  warrants is as  reflected  on Quigley's  stock
transfer ledger on September 10, 1999, the record date of the Special Meeting.
This action is in the early stages of  litigation,  and no  prediction  can be
made as to the outcome of this case.

An  underlying  claim filed by Goldblum and Wayne in the Court of Common Pleas
of  Montgomery  County,  Pennsylvania,  on March 17,  1996  alleging  that the
plaintiffs  became owners of 500,000 shares each of the Company's common stock
in or about 1990 and  requested  damages in excess of  $100,000  for breach of
contract and conversion.  The Company is vigorously defending this lawsuit and
has denied any liability to the plaintiffs. The Company also believes that the
plaintiffs' claims are barred by the applicable  statutes of limitations,  and
that the  plaintiffs  are, in any event,  limited to claims for  approximately
36,000 shares.  The Company  continues to believe that the plaintiffs'  claims
are without merit but certain pre-trial  discovery  remains  incomplete and no
prediction can be made as to the outcome of this case.

NOTE 13 - SUBSEQUENT  EVENTS

On January 2, 2001,  the Company  agreed to acquire  certain assets and assume
certain  liabilities  of a  privately  held  company  involved  in the  direct
marketing and distribution of health and wellness  products.  This acquisition
requires cash payments that will approximate $242,000 and 50,000 shares of the
Company's stock issued to the former owners of the assets acquired. These cash
payments  require an initial payment of $100,000,  with the balance to be paid
as  percent  of  sales   attained   until  the  total  price  of  $242,000  is
accomplished.  The net assets acquired at acquisition principally consisted of
intangibles with no recorded value, inventory and fixed assets of $421,000 and
liabilities  assumed  approximating  $299,000.  Also  required are  continuous
payments for the use of product formulations;  consulting; confidentiality and
non-compete fees that total up to 12% on net sales collected until $540,000 is
paid,  which such fees  become 5% on net sales  collected  for the  continuous
applications of these arrangements.

NOTE 14 - 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 paid or payable under such  arrangements  for the
years ended  December  31, 2000,  December  31,  1999,  and December 31, 1998,
amounted to $466,033,  $370,466, and $270,113 , respectively.  Amounts payable
under  such  agreements  at  December  31,  2000 and 1999  were  approximately
$195,075 and $89,605, respectively.

                                     F-17

<PAGE>

The  Company is in the  process of  acquiring  licenses  in certain  countries
through related party  entities.  During 2000, fees amounting to $251,607 have
been  paid to a  related  entity  to assist  with the  regulatory  aspects  of
obtaining such licenses.

NOTE 15 - QUARTERLY INFORMATION (UNAUDITED)
<TABLE>
<S>                                            <C>         <C>           <C>          <C>

                                                              Quarter Ended
                                        --------------- ---------- ------------- --------------
                                            March 31,   June 30,   September 30,   December 31,
                                        --------------- ---------- ------------- --------------
2000
Net Sales                                  $6,614,786   $1,300,111    $3,765,229     $7,684,060
Gross Profit                                4,339,858      890,884     2,571,319      5,677,533
Net Income (loss)                          (3,923,438)  (1,652,290)      114,401        264,854

Basic (loss) per common share                  ($0.38)      ($0.16)        $0.01          $0.03
Diluted (loss) per common share                ($0.38)      ($0.16)        $0.01          $0.03

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


</TABLE>


                                     F-18


<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  judgments,
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, 2000,  1999, and 1998, 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 19, 2001
---------------------------------------------                -----------------
Guy J. Quigley, Chairman of the Board,                             Date
  President, Chief Executive Officer


/s/ George J. Longo                                          February 19, 2001
---------------------------------------------               ------------------
George J. Longo, Vice President, Chief Financial Officer           Date
  (Principal Financial and Accounting Officer)














                                     F-19

<PAGE>



                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of The Quigley Corporation

In our opinion,  the accompanying  consolidated balance sheets and the related
consolidated  statements of operations,  stockholders'  equity, and cash flows
present  fairly,  in all  material  respects,  the  financial  position of The
Quigley Corporation and its subsidiaries at December 31, 2000 and December 31,
1999, and the results of their operations and their cash flows for each of the
three  years  in the  period  ended  December  31,  2000  in  conformity  with
accounting  principles  generally  accepted  in the United  States of America.
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 of America,
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 our opinion.




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




Philadelphia, Pennsylvania
February 19, 2001








                                     F-20

<PAGE>



ITEM 9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        ---------------------------------------------------------------
        FINANCIAL DISCLOSURE
        --------------------
None


                                   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 2001 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 2001 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 2001 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 2001 Annual Meeting of Stockholders.







                                     -18-



<PAGE>


                                    PART IV
                                    -------

ITEM 14  EXHIBITS, FINANCIAL STATEMENT 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)




                                     -19-


<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
               1, 2001

          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,
         2000.














                                     -20-

<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.
<TABLE>
<S>     <C>                                                              <C>


                                                       THE QUIGLEY CORPORATION


/s/ Guy J. Quigley                                                         March 5, 2001
-----------------------------------------------                            -------------
Guy J.Quigley, Chairman of the Board, President,                                Date
Chief Executive Officer and Director

</TABLE>


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:
<TABLE>
<S>     <C>                                <C>                                 <C>


     Signature                             Title                               Date
     _________                             _____                               ____


/s/ Guy J. Quigley              Chairman of the Board, President,          March 5, 2001
-------------------------       Chief Executive Officer and Director       -------------
Guy J. Quigley


/s/ Charles A. Phillips         Executive Vice President, Chief            March 5, 2001
-------------------------       Operating Officer and Director             -------------
Charles A. Phillips


/s/ George J. Longo             Vice President, Chief Financial            March 5, 2001
-------------------------       Officer and Director (Principal            -------------
George J. Longo                 Financial and Accounting Officer)


/s/ Eric H. Kaytes              Vice President, Chief Information          March 5, 2001
-------------------------       Officer, Secretary, Treasurer and          -------------
Eric H. Kaytes                  Director


/s/Jacqueline F. Lewis          Director                                   March 5, 2001
-------------------------                                                  -------------
Jacqueline F. Lewis


/s/ Rounsevelle W. Schaum       Director                                   March 5, 2001
-------------------------                                                  -------------
Rounsevelle W. Schaum

</TABLE>







                                     -21-




<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 19, 2001,  relating to the financial  statements,  which
appears in this Form 10-K.





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

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
March 1, 2001













                                     -22-