`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, 2001

                          Commission File No. 01-21617
                          ----------------------------

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


               NEVADA                                       23-2577138
               -------------------------------------------------------
(State or other  jurisdiction of                       (IRS Employer
 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 February 22, 2002, 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  $37,363,036  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  February  22,  2002:
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 2002 Annual Meeting
     of Stockholders.


                  THE EXHIBIT INDEX IS LOCATED ON PAGES 19-20.


                                  Page 1 of 22




                                TABLE OF CONTENTS


Part I
                                                                            Page
                                                                            ----

       Item   1.   Description of Business                                  3-8

              2.   Description of Properties                                  8

              3.   Legal Proceedings                                        9-10

              4.   Submission of Matters to a Vote by Security Holders        10

       Part II

              5.   Market for the Company's Common Equity and Related
                      Stockholder Matters                                  10-11

              6.   Selected Financial Data                                 11-12

              7.   Management's Discussion and Analysis of Results of
                      Operations and Financial Condition                   12-17

              8.   Financial Statements                                       18

              9.   Change in and Disagreements with Accountants on
                      Accounting and Financial Disclosure                     19

       Part III

             10.   Directors and Executive Officers of the Registrant         19

             11.   Executive Compensation                                     19

             12.   Security Ownership of Certain Beneficial
                      Owners and Management                                   19

             13.   Certain Relationships and Related Transactions             19


       Part IV

             14.   Exhibits, Financial Statement Schedules and Reports
                      on Form 8-K                                          20-21

                                       2




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.


                                     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. On January 2, 2001, the Company acquired certain assets and assumed
certain liabilities of a privately held company involved in the direct marketing
and distribution of health and wellness products,  this entity is a wholly owned
subsidiary  of  Darius   International  Inc.  and  is  based  in  Alpine,  Utah.
Additionally,  effective  July 1, 2000,  the  Company  acquired a 60%  ownership
position in Caribbean Pacific Natural Products, Inc., 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. The demand for the Company's cold
remedy products and sun-care and skincare products is seasonal,

                                       3




where the third and fourth quarters generally represent the largest sales volume
for Cold remedy products and the first and second quarters  generally  represent
the largest  sales volume for the sun-care and skincare  products.  During 2001,
approximately 99% of the Company's revenues originated in the United States with
the remainder being attributable to international trade.

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. Additionally,  on January 2, 2001, the Company acquired certain
assets and assumed certain  liabilities of a privately held company  involved in
the direct  marketing and  distribution  of health and wellness  products.  This
entity is a wholly owned subsidiary of Darius International Inc.

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 Unit which is now
Quigley Pharma Inc., a wholly-owned  subsidiary of the Company that is under the
direction of its Executive Vice  President and Chairman of its Medical  Advisory
Committee.  The launch of the Company's Ethical  Pharmaceutical Unit follows the
Patent Office of The United States Commerce Department confirming the assignment
to the Company of a Patent  Application  for the "Method and Composition for the
Topical Treatment of Diabetic Neuropathy".  In September 2001, the Patent Office
confirmed  the  assignment to the Company of a Patent  Application  entitled the
"Medicinal  Composition and Method of Using it" (for Treatment of Sialorrhea and
other Disorders) for a prescription product to relieve sialorrhea  (drooling) in
patients suffering from Amyotrophic Lateral Sclerosis (ALS),  otherwise known as
Lou  Gehrig's  Disease.  In November  2001,  the  Company was  assigned a Patent
Application  entitled  "Composition  and Method for  Prevention,  Reduction  and
Treatment of Radiation  Dermatitis"  with the Patent Office of The United States
Commerce Department.  The establishment of a dedicated pharmaceutical subsidiary
will enable the Company to diversify  into the  prescription  drug market and to
ensure safe and effective distribution of these important potential new products
currently under development.

PRODUCTS
--------

Cold Remedy Products
--------------------

Cold-Eeze(R), a zinc gluconate glycine formulation (ZIGG(TM)) representing 68.4%
of the Company's  sales for 2001, 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.

In the second half of 1998, the Company  launched  Cold-Eeze(R)  in a sugar free
version of the product to benefit  diabetics and other consumers  concerned with
their sugar intake.  Late in the fourth quarter of 1998, the Company  launched a
bubble gum version of Cold-Eeze(R).

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,

                                       4




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.

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.
Cold-Eeze(R)  is a homeopathic  remedy that is subject to regulations by various
federal,  state  and  local  agencies,  including  the FDA  and the  Homeopathic
Pharmacopoeia of the United States.

The Company competes with suppliers varying in range and size in the cold remedy
products  arena.  Cold-Eeze(R),  which  has  been  clinically  proven,  offers a
significant  advantage over other suppliers in the over-the-counter  cold remedy
market.  The  management  of the  Company  believes  there  should  be no future
impediment on the ability to compete in the marketplace now, or in the immediate
future,  since factors concerning the product,  such as price,  product quality,
availability,  reliability, credit terms, name recognition, delivery and support
are all properly  positioned.  The Company has several  Broker,  Distributor and
Representative  Agreements,  both nationally and internationally and the product
is distributed  through numerous  independent and chain drug and discount stores
throughout the United States.

The  Company  continues  to  use  the  resources  of  independent  national  and
international brokers complementing its own personnel to represent the Company's
over-the-counter products, thereby saving capital and other ongoing expenditures
that would otherwise be incurred.

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

Darius International Inc., a wholly owned subsidiary with sales representing 23%
of the  Company's  sales in 2001,  was formed in January 2000 for the purpose of
introducing  new products to the  marketplace  through a network of  independent
distributors.  On January 2,  2001,  the  Company  acquired  certain  assets and
assumed certain  liabilities of a privately held company  involved in the direct
marketing and distribution of health and wellness  products.  Darius is a direct
selling  organization  specializing in proprietary health and wellness products.
The  products  marketed  and sold by Darius are  designed  to improve  the human
condition, in the area of health, immunity, energy, pain and the common cold.

Sun-care and Skincare Products
-------------------------------

Caribbean Pacific Natural Products, Inc., is a leading developer and marketer of
all-natural  sun-care and skincare products for luxury resorts,  theme parks and
spas with sales representing 8.6% of the Company's sales in 2001.

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.

Caribbean Pacific currently has three distinct product lines:  Virgin Sol, Coral
Sol and Sport Sol and is currently  developing a spa line called  Sabate and has
recently test marketed a dry-grip golf product.

Caribbean  Pacific  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).  Caribbean  Pacific also
markets a

                                       5




sunscreen  product  called  "Karibbean  Kidz"  especially  for  children,  again
containing all natural ingredients found in nature.

Additionally,  Caribbean  Pacific  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 and 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 skincare products marketed and sold by Caribbean Pacific.

PATENTS, TRADEMARKS, ROYALTY AND COMMISSION AGREEMENTS
------------------------------------------------------

The Company  currently owns no patents.  However,  the Company has recently been
assigned three patent applications which are hereinafter  discussed and 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)      Sweden:        No. 0 183 840 (March 2, 1994)
                 No. 4 758 439 (July 19, 1988)       Canada:        No. 1 243 952 (November 1, 1988)
Germany:         No. 3,587,766 (March 2, 1994)       Great Britain: No. 2 179 536 (December 21, 1988)
France & Italy:  No. EP 0 183 840 B1 (March 2, 1994) Japan:         Pending

In 1996, the Company also acquired an exclusive license for a United States ZINC
GLUCONATE  USE PATENT NUMBER RI 33,465 from the patent  holder.  This use patent
gives the Company  exclusive  rights to both the USE and FORMULATION  patents on
zinc  gluconate  for  reducing  the  duration  and  severity  of the common cold
symptoms.  This patent and  exclusive  license  will  expire in March 2002.  The
Company does not anticipate any material impact on the financial statements.

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 which expires in March
2002.

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 this 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 Patent Office of The United States  Commerce  Department
confirmed the filing and assignment to the Company of a Patent  Application  for
the "Method and Composition for the Topical  Treatment of Diabetic

                                       6




Neuropathy."  In September  2001, the Patent Office  confirmed the assignment to
the Company of a Patent  Application  entitled the  "Medicinal  Composition  and
Method of Using it" (for  Treatment of  Sialorrhea  and other  Disorders)  for a
prescription product to relieve sialorrhea (drooling) in patients suffering from
Amyotrophic Lateral Sclerosis (ALS), otherwise known as Lou Gehrig's Disease. In
November  2001,  the  Company  was  assigned  a  Patent   Application   entitled
"Composition  and Method for  Prevention,  Reduction  and Treatment of Radiation
Dermatitis" with the Patent Office of The United States Commerce Department.

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 food, chain drug and
mass merchandisers throughout the United States, including the Walgreen Company,
Albertsons, CVS, Rite-Aid, Eckerd Drug Company, Phar-Mor Inc., Wal-Mart, Target,
The Kroger Company,  Safeway Inc., Costco  Wholesale,  K-Mart  Corporation,  and
wholesale  distributors  including,  AmeriSource-Bergen  Brunswig  Drug Company,
Cardinal Health and the McKesson Drug Company.

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 customers of the Company represent 33%, 44%, and 39% of its
consolidated  revenue  for the years ended  December  31,  2001,  2000 and 1999,
respectively.

Darius 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  Company in the  promotion  of the cold
remedy products.

Caribbean  Pacific Natural  Products are sold  exclusively  through  partnership
marketing  agreements  at over  100  premier  resorts,  theme  parks,  and  spas
throughout    the   U.S.,    Mexico   and   the    Caribbean.    They    include
Anheuser-Busch-Entertainment,  Biltmore,  Resort Hyatt, 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,
as well as the Allegro and Melia resorts.

RESEARCH AND DEVELOPMENT
------------------------

The Company's  research and  development  costs for the years ended December 31,
2001, 2000 and 1999 were  $1,331,639,  $1,185,750,  and $297,650,  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  are  anticipated  in  connection  with  Quigley  Pharma,  Inc.,  a
wholly-owned  subsidiary  of  the  Company  established  in  2001,  such  as the
formulation  of products for diabetic use,  radiation  dermatitis and sialorrhea
and other  disorders.  Principally,  the increase of Research and Development in
2001 and 2000 was due to expenses  incurred as part of the costs  related to the
application  for a pharmacy  drug license in the United  Kingdom,  together with
research costs related to Quigley Pharma.

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

                                       7



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 products and health and
wellness  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.  Management further believes that Darius' direct marketing  distribution
methods offer a significant advantage over many of its competitors.  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 skincare 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, 2001 the Company employed 44 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  included 4 persons
that were engaged by the Company through an outside employer organization.

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
product is 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 cold remedy  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.  Any situation where the vendor is not able to supply the
contract  manufacturer  with the  ingredients may result in a temporary delay in
production  until  replacement  supplies  are  obtained  to meet  the  Company's
production requirements.

Darius'  products for resale are sourced from  several  suppliers.  In the event
that such  sources were no longer in a position to supply  Darius 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  whose  use may  result  in a
temporary delay in production.


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

The corporate office of The Quigley  Corporation is located at 621 Shady Retreat
Road,  Doylestown,  Pennsylvania.  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  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

                                       8



2003. In addition to storage  facilities at the  Manufacturers'  locations,  the
Company also stores product in four additional  warehouses in Pennsylvania  with
storage charges based upon the quantities of product being stored.

The Darius  business  in Utah is located at 80 West Canyon  Crest Road,  Alpine,
Utah,  with an office  area of  approximately  3,000  square  feet.  The current
monthly  lease cost of this office  space is $4,080  with the lease  expiring in
March  2002.  The  Company  also  occupies  a  warehouse  at Lehi,  Utah,  which
approximates  5,700  square feet,  with a monthly  lease cost of $2,500 and this
lease expires in November  2002.  The Company  expects that these leases will be
renewed or that alternative spaces will be obtained.

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 $6,845. Additionally, Caribbean Pacific Natural Products
is leasing  office  space in Hawaii  and Mexico at a monthly  cost of $1,000 and
$1,035 per month,  respectively,  these leases are for periods of six months and
one year, respectively.

The Company believes that its existing facilities are adequate.

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(R)  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 Court sustained certain objections thereby
narrowing  Plaintiffs'  Complaint.  In May, 2001,  Plaintiffs  filed a Motion to
Certify the Alleged Class.  The Company opposed the Motion.  In November,  2001,
the Court  held a hearing on  Plaintiffs'  Motion  for Class  Certification.  In
January,  2002,  the Court  denied in part and  granted in part the  Plaintiffs'
Motion.  The  Court  denied  Plaintiffs'  Motion  to  Certify  a Class  based on
Plaintiffs' claim under the Pennsylvania  Consumer Protection Law; however,  the
Court  certified  the class based on  Plaintiffs'  breach of warranty and unjust
enrichment    claims.    The    Company    is   filing    for   a   Motion   for
Clarification/Reconsideration   of  this  ruling.   The  Company  is  vigorously
defending  this  lawsuit  although  the Company  believes  that the action lacks
merit.  The  case is at a  stage  where  no  discovery  has  been  taken  and no
prediction can be made as to the outcome of this case.

                               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 scheduled for trial
in Clark County, Nevada, during the week of March 25, 2002. No prediction can be
made as to the outcome of this case.

                                       9



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
                                                 --------------
                                        2001                    2000
                                   -----------------       ------------------
           QUARTER ENDED           HIGH         LOW        HIGH         LOW
           -------------           ----         ---        ----         ---

           March 31               $1.531      $0.813      $3.250      $1.500
           June 30                $1.960      $0.750      $2.031      $1.125
           September 30           $1.600      $0.800      $1.969      $1.156
           December 31            $2.390      $0.830      $1.750      $0.656

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

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, 2001, there were  approximately  389 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 not declared,  nor paid, any cash dividends on its Common Stock.
At this time the Company intends to retain its earnings to finance future growth
and maintain liquidity.

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

In addition to the Company's  aforesaid  outstanding Common Stock, there are, as
of December 31, 2001, 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:

                                       10



        Description      Number       Exercise Price      Expiration Date
        -----------      ------       --------------      ---------------
        CLASS "E"      1,150,000          $1.7500         June 30, 2006
        CLASS "F"        225,000          $2.5000         November 4, 2006
        CLASS "G"        360,000          $10.0000        May 5, 2002
        CLASS "G"        585,000          $10.0000        May 5, 2007
        Option Plan      506,500          $9.6800         December 1, 2007
        Option Plan      383,500          $5.1250         April 6, 2009
        Option Plan       25,000          $2.0625         January 13, 2010
        Option Plan      379,000          $0.8125         December 20, 2010
        Option Plan      400,000          $1.2600         December 10, 2011

At December 31, 2001,  there were 4,014,000  unexercised  and vested options and
warrants of the Company's stock available for exercise.

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 the years ended  December  31,  2001,  2000,
1999, 1998 and 1997.

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.


(AMOUNTS IN THOUSANDS, EXCEPT           YEAR ENDED   YEAR ENDED    YEAR ENDED    YEAR ENDED     YEAR ENDED
   PER SHARE DATA)                      DECEMBER 31, DECEMBER 31,  DECEMBER 31,  DECEMBER 31,   DECEMBER 31,
                                         2001          2000            1999          1998          1997
                                        --------------------------------------------------------------------

STATEMENT OF INCOME DATA:
Sales                                   $25,224       $19,364      $24,820        $36,354        $70,173
Co-operative advertising promotions       2,101         2,559        2,499          1,619            775
Net Sales                                23,123        16,805       22,321         34,735         69,398
Gross Profit                             15,054        10,921       14,441         23,858         47,970
Net Income (Loss)                           216        (5,196)      (4,204)         6,809         20,967

Basic earnings (loss) per
  common share                            $0.02        ($0.49)      ($0.37)         $0.51          $1.72
Diluted earnings (loss) per
  common share                            $0.02        ($0.49)      ($0.37)         $0.46          $1.43
Weighted average common
  shares outstanding:
     Basic                               10,675        10,551       11,352         13,335         12,181
     Diluted                             10,751        10,551       11,352         14,944         14,634

                                       11



                                 AS OF              AS OF           AS OF          AS OF            AS OF
                              DECEMBER 31,        DECEMBER 31,     DECEMBER 31,  DECEMBER 31,      DECEMBER 31,
                                  2001               2000            1999          1998              1997
                              ----------------------------------------------------------------------------------
BALANCE SHEET DATA:
Working capital                  $18,626           $18,622         $23,621        $43,024            $41,141
Total assets                      24,756            26,056          33,271         48,611             49,847
Stockholders' equity             $21,200           $20,971         $26,216        $44,607            $41,748

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. During 2001, the industry in which
the Company's  products are distributed  continued to experience further mergers
and  consolidations.  This  contraction  within the  industry  had the impact of
reducing sell-in opportunities of previous years. During the later part of 2001,
the economic  downturn became more  pronounced,  our customers strove to achieve
greater efficiencies by means of better managing inventory and therefore carried
lower levels of inventory with the effect of reduced ordering activity.

The inclusion of Darius and Caribbean  Pacific Natural Products in 2001 provided
diversification for the Company with Cold-Eeze(R) contributing 68.4% of sales in
2001 compared to 95.6% in 2000.

The revenue for 2001 was $24,669,667 compared to $16,805,093 and $22,320,451 for
2000 and 1999  respectively.  The  increase in revenue is  accounted  for by the
continued  development of both the Darius and Caribbean Pacific Natural Products
businesses  in 2001,  which had  combined  revenue  of  $7,965,049  compared  to
$850,166 for the year of 2000.  Cold-Eeze(R)  revenues declined slightly in 2001
due to the  effects of  continued  industry  consolidations  and the  pursuit of
inventory  efficiencies  by our  customers.  However,  independent  market  data
indicates that the rate of decrease in consumer  purchasing of Cold-Eeze(R)  has
slowed  significantly.  Additionally,  in 2001  revenues  were  assisted  by the
settlement  in the  infringement  suit against Gel Tech,  LLC, the  developer of
Zicam(TM),  and  Gum  Tech  International,  Inc.,  its  distributor.  Under  the
agreement, Gum Tech will pay the Company $1,137,500 for a limited license on the
use of zinc  gluconate  for the  treatment  of the  duration and symptoms of the
common cold. Gum Tech is also required to pay the Company an ongoing  royalty of
5.5 percent  from April 1, 2001  through  March 5, 2002 on all Zicam cold relief
sales.  In  addition,  Gum Tech has  guaranteed  to pay a minimum of $500,000 in
ongoing  royalties  regardless of sales  through March 5, 2002.  Legal and other
expenses associated with this lawsuit in 2001 approximated $700,000.

Advertising   costs  in  2001  were   approximately   $3,400,000   compared   to
approximately $9,300,000 in 2000. During 2001 the Company continued the strategy
initiated in late 2000 of focusing less on television and radio  advertising and
more on promoting the product with our customers and occasionally  directly with
the  consumer.   This  commitment  to  the  Cold-Eeze(R)   product  was  further
strengthened  during  2001  with the  hiring  of a Vice  President  of Sales and
Marketing and also the contracting with a large geographically diverse brokerage
company to promote and represent the product at the retail level.

The  Company  continues  to  use  the  resources  of  independent  national  and
international brokers to represent the Company's  Cold-Eeze(R)  products,  which
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. On January 2, 2001, the Company
acquired  certain  assets and assumed  certain  liabilities  of a privately held
company involved in the direct marketing and distribution of health and wellness
products.   This  entity,   which  is  a  wholly  owned   subsidiary  of  Darius
International Inc., is based in Utah.

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-care and
skincare

                                       12



products for luxury  resorts,  theme parks and spas.  Caribbean  Pacific Natural
Products has developed markets for its products both domestic and international.

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.

During 2001, the Company continued to make progress with the registration of the
Cold-Eeze(R)  products  in the United  Kingdom as a pharmacy  drug and  incurred
approximately $650,000 in related expenses.

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
adoption of this  pronouncement  did 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.

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 was 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.

In June 2001, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 141, "Business  Combinations." SFAS
No. 141 requires that the purchase method of accounting be used for all business
combinations  initiated  after June 30,  2001.  This  statement  specifies  that
certain acquired  intangible  assets in a business  combination be recognized as
assets  separately from goodwill and existing  intangible assets and goodwill be
evaluated for these new separation requirements.  Goodwill and intangible assets

                                       13



determined to have  indefinite  useful lives will not be  amortized.  Management
does not  expect  this  statement  to have a  material  impact on the  Company's
consolidated financial position or results of operations.

In June 2001, SFAS No. 142, "Goodwill and Other Intangible Assets" was issued by
the FASB.  SFAS No. 142 changes the accounting for goodwill from an amortization
method to an  impairment-only  approach.  Amortization  of  goodwill,  including
goodwill  recorded in past  business  combinations,  will cease upon adoption of
this statement.  The Company is required to implement SFAS No. 142 on January 1,
2002. Management does not expect this statement to have a material impact on the
Company's consolidated financial position or results of operations.

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations." This statement  addresses  financial  accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. The Company is required to implement SFAS No.
143 on January 1, 2002.  Management  does not expect  this  statement  to have a
material impact on the Company's  consolidated  financial position or results of
operations.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets."  This  statement  supercedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed  Of." The  statement  retains  the  previously  existing  accounting
requirements  related to the  recognition  and  measurement of the impairment of
long-lived   assets  to  be  held  and  used  while  expanding  the  measurement
requirements  of  long-lived  assets  to be  disposed  of  by  sale  to  include
discontinued  operations.  It also  expands the  previously  existing  reporting
requirements  for  discontinued  operations  to include a component of an entity
that either has been disposed of or is classified as held for sale.  The Company
is required to implement  SFAS No. 144 on January 1, 2002.  Management  does not
expect this  statement to have a material  impact on the Company's  consolidated
financial position or results of operations.

RESULTS OF OPERATIONS
---------------------

TWELVE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH SAME PERIOD 2000
--------------------------------------------------------------------

For the year ended December 31, 2001,  the Company had revenues of  $24,669,667,
an increase of 46.7% over 2000 revenues of $16,805,093. The results of 2001 show
a net income of $215,964 compared to a loss of ($5,196,473) for 2000.

Revenues for 2001 included  amounts of  $5,788,579  and  $2,176,470  relating to
Darius and Caribbean Pacific Natural Products, compared to $51,300 and $798,866,
respectively  for 2000.  The  Cold-Eeze(R)  product  was  adversely  affected by
continued   industry   consolidations  in  which  the  Company's   products  are
distributed,  and the effects of the economic  downturn which was evident in the
latter part of 2001. However, independent market data indicates that the rate of
decrease  in  consumer  purchasing  of  Cold-Eeze(R)  has slowed  significantly.
Additionally,   in  2001  revenues  were  assisted  by  the  settlement  in  the
infringement  suit against Gel Tech,  LLC, the developer of  Zicam(TM),  and Gum
Tech International,  Inc., its distributor.  Under the agreement,  Gum Tech will
pay the Company  $1,137,500 for a limited  license for the use of zinc gluconate
for the  treatment of the duration and symptoms of the common cold.  Gum Tech is
also required to pay the Company an ongoing royalty of 5.5 percent from April 1,
2001 through March 5, 2002 on all Zicam cold relief sales. In addition, Gum Tech
has guaranteed to pay a minimum of $500,000 in ongoing  royalties  regardless of
sales  through  March 5, 2002.  Legal and other  expenses  associated  with this
lawsuit in 2001 approximated $700,000.

The Company's  cost of goods sold increased to 38.1% in 2001 from 30.4% in 2000.
The primary  reason for the increase in 2001 was the higher  proportion of sales
attributable  to Darius and Caribbean  Pacific in 2001 (31.6%)  compared to 2000
(4.4%).  Both Darius and Caribbean  Pacific's  products carry a higher a cost of
goods compared to Cold-Eeze(R) products.

Selling,  general and administrative expenses for 2001 were $14,148,814 compared
to $15,669,787  in 2000.  Advertising  costs in 2001 decreased by  approximately
$6,000,000,  however this  reduction in costs was partially  offset by increased
operating  costs of Darius  and  Caribbean  Pacific,  which  was due to  limited
operations in 2000.  During 2001,  the  Company's  major  operating  expenses of
delivery,  salaries,  brokerage commissions,  promotion,  advertising, and legal
costs accounted for approximately  $9,325,876 (66%) of the total of $14,148,814,

                                       14



a decrease of 25% over the 2000 amount of $12,378,717.  The selling, general and
administrative  expenses  related to Darius and  Caribbean  Pacific for 2001 and
2000 were $4,902,480 and $1,495,142, respectively.

Research and Development  costs in 2001 and 2000 were $1,331,639 and $1,185,750,
respectively.  Principally, the increase of Research and Development in 2001 and
2000  was  due to  expenses  incurred  as  part  of  the  costs  related  to the
application for a pharmacy drug license in the United Kingdom, together with the
research costs related to Quigley Pharma.

Total assets of the Company at December 31, 2001 and 2000 were  $24,755,795  and
$26,055,601, respectively. Working capital decreased by $3,692 to $18,625,819 at
December 31, 2001.  The primary  influences on working  capital during 2001 were
the reductions in accrued  expenses  relating to  advertising  and royalties and
sales commissions with the related reduction in cash balances.

TWELVE MONTHS ENDED DECEMBER 31, 2000 COMPARED WITH SAME PERIOD 1999
--------------------------------------------------------------------

Revenues  for the year ended  December  31, 2000 were  $16,805,093,  which was a
decrease  of 25% over 1999  revenues of  $22,320,451.  The net loss for 2000 was
($5,196,473)  compared to a net loss in 1999 of ($4,203,785).  The 2000 net loss
did not reflect  any tax benefit  whereas the 1999 net loss was reduced by a tax
benefit of $1,902,615.  A tax benefit was not available in 2000 because of a net
operating loss  carry-forward  for tax purposes that occurred  during the fourth
quarter of 1999.

2000  revenues  were  adversely  affected by changes in the  industry.  Customer
consolidations  continued  throughout  the year which had the effect of reducing
the opportunities for pipeline fill. The industry  consolidation  also meant the
adoption of just-in-time inventory systems and as a result product lead time was
lessened and inventories had 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  during 2000 from Darius  International  Inc.,  and  Caribbean  Pacific
Natural Products,  Inc. contributed $850,166, with both of these companies being
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 was  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,  was higher than that of the
Cold-Eeze(R) products.

Selling,  general and administrative expenses for 2000 were $15,669,787 compared
to $21,131,172  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  costs
accounted for  approximately  $12,378,717  (79%) of the total of $15,669,787,  a
decrease of 34% over the 1999 amount of  $18,762,240.  The selling,  general and
administrative  expenses  related to Darius  International  Inc.,  and Caribbean
Pacific Natural Products, Inc. for 2000 were $1,495,142 with zero costs in 1999.

Research and  Development  costs in 2000 and 1999 were  $1,185,750 and $297,650,
respectively.  The increase in 2000 was 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.

                                       15



TWELVE MONTHS ENDED DECEMBER 31, 1999 COMPARED WITH SAME PERIOD 1998
--------------------------------------------------------------------

For the year ended  December 31, 1999,  the Company had revenues of  $22,320,451
and a net loss of  ($4,203,785),  compared to revenues  of  $34,735,167  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  being sold at non  competitive
prices. 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, thereby not reducing the loss for related tax benefits.

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  was  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  continued to be manufactured in an efficient and
cost effective manner and accounts for a majority of the sales activity.

Total  operating  costs for  1999,  including  research  and  development,  were
$21,428,822  compared to $14,143,610  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  $18,762,240  (88%) of the total of
$21,428,822.

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.

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 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 $35,000 relating to
2002.  Additional  advertising cost is expected to be incurred for the remainder
of 2002.

                                       16


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The  Company  and its  subsidiaries  had  working  capital  of  $18,625,819  and
$18,622,127 at December 31, 2001 and 2000,  respectively.  While the movement in
working capital overall has not been significant during 2001, cash balances have
decreased by $1,625,003,  accrued royalties and sales commissions have decreased
by $444,048 and accrued  advertising  has  decreased by  $1,069,081.  Total cash
balances  at December  31,  2001 were  $9,740,840  compared  to  $11,365,843  at
December 31, 2000.

Management  believes that its 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,  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 and its subsidiaries may in the
short and long term raise capital  through the issuance of equity  securities to
finance anticipated growth.

During  2001 the  Company  repurchased  a total of  30,000  shares  at a cost of
$30,131.

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.

                                       17





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

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                                 Page
                                                                           ----

Balance Sheets as of December 31, 2001 and 2000                            F-1

Statements of Operations for the years ended December 31, 2001, 2000,
 and 1999                                                                  F-2

Statements of Stockholders' Equity for the years ended December 31,
 2001, 2000, and 1999                                                      F-3

Statements of Cash Flows for the years ended December 31, 2001, 2000,
 and 1999                                                                  F-4

Notes to Financial Statements                                              F-5 to F-17

Responsibility for Financial Statements                                    F-18

Report of Independent Accountants                                          F-19

                                       18





                             THE QUIGLEY CORPORATION
                           CONSOLIDATED BALANCE SHEETS

                         ASSETS                           December 31, 2001       December 31, 2000
                                                          -----------------       -----------------


CURRENT ASSETS:

   Cash and cash equivalents                                 $9,740,840               $11,365,843
   Accounts receivable (less doubtful accounts
      of $719,310 and $536,297)                               4,425,291                 4,062,703
   Inventory                                                  6,507,746                 6,917,889
   Prepaid expenses and other current assets                  1,507,462                 1,123,275
                                                             ----------               -----------
        TOTAL CURRENT ASSETS                                 22,181,339                23,469,710
                                                             ----------               -----------

PROPERTY, PLANT AND EQUIPMENT - NET                           2,201,309                 2,139,727
                                                             ----------               -----------

OTHER ASSETS:

   Patent rights - Less accumulated amortization                 21,940                   109,702
   Excess cost over net assets acquired less
       accumulated amortization                                 327,014                   329,166
   Other assets                                                  24,193                     7,296
                                                            -----------               -----------
        TOTAL OTHER ASSETS                                      373,147                   446,164
                                                            -----------               -----------

TOTAL ASSETS                                                $24,755,795               $26,055,601
                                                            ===========               ===========

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

   Accounts payable                                            $911,813                  $763,527
   Accrued royalties and sales commissions                    1,005,594                 1,449,642
   Accrued advertising                                          668,792                 1,737,873
   Other current liabilities                                    969,321                   896,541
                                                            -----------               -----------
        TOTAL CURRENT LIABILITIES                             3,555,520                 4,847,583
                                                            -----------               -----------

COMMITMENTS AND CONTINGENCIES

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


STOCKHOLDERS' EQUITY:

   Common stock, $.0005 par value; authorized 50,000,000;
      Issued: 15,321,206 and 15,271,206 shares                    7,661                     7,636
   Additional paid-in-capital                                28,915,612                28,871,887
   Retained earnings                                         17,465,161                17,249,197
   Less: Treasury stock, 4,646,053 and 4,616,053 shares,
      at cost                                               (25,188,159)              (25,158,028)
                                                            -----------               -----------
        TOTAL STOCKHOLDERS' EQUITY                           21,200,275                20,970,692
                                                            -----------               -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $24,755,795               $26,055,601
                                                            ===========               ===========


                 See accompanying notes to financial statements

                                       F-1


                             THE QUIGLEY CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                           Year Ended           Year Ended            Year Ended
                                                        December 31, 2001     December 31, 2000      December 31, 1999
                                                        -----------------     -----------------      -----------------

SALES:
  Sales                                                 $25,224,362           $19,364,186            $24,819,942
  Co-operative advertising promotions                     2,101,287             2,559,093              2,499,491
                                                        -----------           -----------            -----------

NET SALES                                                23,123,075            16,805,093             22,320,451

SETTLED LITIGATION                                        1,546,592                -                      -
                                                        -----------           -----------            -----------

TOTAL REVENUE                                            24,669,667            16,805,093             22,320,451
                                                        -----------           -----------            -----------

COST OF SALES                                             9,615,211             5,884,592              7,879,303
                                                        -----------           -----------            -----------

GROSS PROFIT                                             15,054,456            10,920,501             14,441,148
                                                        -----------           -----------            -----------

OPERATING EXPENSES:
  Sales and marketing                                     5,772,832             9,453,277             15,438,511
  Administration                                          8,375,982             6,216,510              5,692,661
  Research and Development                                1,331,639             1,185,750                297,650
                                                        -----------           -----------            -----------
TOTAL OPERATING EXPENSES                                 15,480,453            16,855,537             21,428,822
                                                        -----------           -----------            -----------

(LOSS) FROM OPERATIONS                                     (425,997)           (5,935,036)            (6,987,674)

INTEREST AND OTHER INCOME                                   404,632               646,723                881,274
                                                        -----------           -----------            -----------

(LOSS) BEFORE TAXES                                         (21,365)           (5,288,313)            (6,106,400)
                                                        -----------           -----------            -----------

INCOME TAXES (BENEFIT)                                        -                     -                 (1,902,615)

MINORITY INTEREST IN LOSS
OF CONSOLIDATED AFFILIATE                                  (237,329)              (91,840)                 -
                                                        -----------           -----------            -----------

NET INCOME (LOSS)                                          $215,964           ($5,196,473)           ($4,203,785)
                                                        ===========           ============           ============


EARNINGS (LOSS) PER COMMON SHARE:

    Basic                                                     $0.02                ($0.49)                ($0.37)
                                                        ===========           ============           ============

    Diluted                                                   $0.02                ($0.49)                ($0.37)
                                                        ===========           ============           ============


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

    Basic                                                10,675,153            10,551,027             11,351,960
                                                        ===========           ===========            ===========

    Diluted                                              10,750,687            10,551,027             11,351,960
                                                        ===========           ===========            ===========

                 See accompanying notes to financial statements

                                       F-2



                             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, 1999                    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

Treasury stock                                (30,000)                                          (30,131)                    (30,131)
Shares issued for net assets
acquired                                       50,000             25            43,725                                       43,750

Net Income year ended
December 31, 2001                                                                                             215,964       215,964
                                         ------------------------------------------------------------------------------------------

BALANCE DECEMBER 31, 2001                  10,675,153         $7,661       $28,915,612     ($25,188,159)  $17,465,161   $21,200,275
                                         ==========================================================================================

                 See accompanying notes to financial statements

                                       F-3



                             THE QUIGLEY CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                              Year Ended      Year Ended        Year Ended
                                                              December 31,    December 31,     December 31,
                                                                  2001           2000              1999
                                                              ------------    -------------    ------------
OPERATING ACTIVITIES:
Net income (loss)                                             $    215,964    ($ 5,196,473)   ($ 4,203,785)
                                                              ------------    ------------    ------------
ADJUSTMENT TO RECONCILE NET INCOME (LOSS) TO
NET CASH PROVIDED BY OPERATIONS:
 Depreciation and amortization                                     490,241         364,924         229,812
 Expenditure paid with common stock                                   --              --           202,975
 Minority interest share of loss in consolidated
  subsidiary                                                      (237,326)        (91,840)           --
 Deferred income taxes                                                --              --           397,489
 Other assets                                                      (16,897)        446,868            --
 (INCREASE) DECREASE IN ASSETS:
    Accounts receivable                                           (314,801)      2,576,984         935,679
    Inventory                                                      794,852        (515,069)        352,607
    Prepaid expenses and other current assets                     (341,287)        267,427          41,422
    Prepaid income taxes                                              --         2,485,247          80,074
 INCREASE (DECREASE) IN LIABILITIES:
    Accounts payable                                                24,299         367,749        (362,255)
    Accrued royalties and sales commissions                       (444,048)       (273,073)       (362,731)
    Accrued advertising                                         (1,069,081)     (2,786,028)      3,962,635
    Other current liabilities                                     (218,829)        483,488         (12,758)
                                                              ------------    ------------    ------------
          TOTAL ADJUSTMENTS                                     (1,332,877)      3,326,677       5,464,949
                                                              ------------    ------------    ------------

NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
                                                                (1,116,913)     (1,869,796)      1,261,164
                                                              ------------    ------------    ------------

CASH FLOWS USED IN INVESTING
ACTIVITIES:
  Capital expenditures                                            (368,320)       (393,477)     (1,043,978)
  Net cost of net assets acquired                                 (109,639)       (312,915)           --
  Other assets                                                        --              --          (197,782)
                                                              ------------    ------------    ------------

NET CASH FLOWS USED IN INVESTING
  ACTIVITIES                                                      (477,959)       (706,392)     (1,241,760)
                                                              ------------    ------------    ------------

CASH FLOWS FROM FINANCING
ACTIVITIES:
  Proceeds from exercises of options and warrants                     --            65,000         427,499
  Repurchase of common stock                                       (30,131)       (113,444)    (14,788,193)
                                                              ------------    ------------    ------------
NET CASH FLOWS FROM FINANCING
 ACTIVITIES                                                        (30,131)        (48,444)    (14,360,694)
                                                              ------------    ------------    ------------

NET INCREASE (DECREASE) IN CASH                                 (1,625,003)     (2,624,632)    (14,341,290)

CASH & CASH EQUIVALENTS, BEGINNING
OF PERIOD
                                                                11,365,843      13,990,475      28,331,765
                                                              ------------    ------------    ------------

CASH & CASH EQUIVALENTS,
 END OF PERIOD                                                $  9,740,840    $ 11,365,843    $ 13,990,475
                                                              ============    ============    ============

                 See accompanying notes to financial statements

                                       F-4




                             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 "Cold-Eeze(R)",  a cold remedy product,  in the United States. The demand for
the  Company's  cold remedy  products  and  sun-care  and  skincare  products is
seasonal,  where the third and fourth quarters  generally  represent the largest
sales  volume for the cold  remedy  products  and the first and second  quarters
generally  represent  third  largest  sales volume for the sun-care and skincare
products.

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.  On
January 2, 2001,  the  Company  acquired  certain  assets  and  assumed  certain
liabilities of a privately held company, located in Utah, involved in the direct
marketing and distribution of health and wellness products.

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-care and skincare 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.
At December 31, 2001,  accumulated losses associated with minority interest have
reduced  minority  interest to zero on the  Balance  Sheet,  with excess  losses
amounting to $144,866  being  absorbed in the Statement of Operations in 2001 by
the majority interest.

On January 2, 2001,  the Company  acquired  certain  assets and assumed  certain
liabilities of a privately held company, located in Utah, involved in the direct
marketing and  distribution of health and wellness  products.  This  acquisition
required  cash  payments  that  approximated  $110,000 and 50,000  shares of the
Company's  stock  issued to the former  owners of the assets  acquired.  The net
assets  acquired at acquisition  principally  consisted of  intangibles  with no
recorded value, inventory,  accounts receivable,  bank balances and fixed assets
totaling $536,000 and liabilities assumed approximating  $416,000. 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,  when such fees become 5% on net sales collected for the
continuous applications of these arrangements. This acquisition is accounted for
by the purchase method of accounting and accordingly, the operating results have
been included in the Company's  consolidated  Statements of Operations  from the
date of  acquisition.  The  excess of cost  over net  assets  acquired  has been
amortized  on a  straight-line  basis over a period of 15 years.  Subsequent  to
2001, the account will only be reduced if the value becomes impaired.

                                      F-5




PRINCIPLES OF ACCOUNTING

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

CASH EQUIVALENTS

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

INVENTORIES

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

PROPERTY, PLANT  AND EQUIPMENT

Property,  plant  and  equipment  is  recorded  at  cost.  The  Company  uses  a
combination of straight-line and accelerated  methods in computing  depreciation
for financial reporting purposes. The annual provision for depreciation has been
computed  principally in accordance with the following ranges of estimated asset
lives: building and improvements - twenty years;  machinery and equipment - five
to seven years;  computer  software - three years;  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, 2001,  December 31, 2000, and December
31, 1999, were $87,761 for all years.  Accumulated  amortization at December 31,
2001  December 31, 2000,  and December 31, 1999,  was  $468,060,  $380,299,  and
$292,538, respectively.

The excess of cost over net assets  acquired has been subject to amortization on
a straight-line basis over a period of 15 years.

In June 2001, SFAS No. 142, "Goodwill and Other Intangible Assets" was issued by
the FASB.  SFAS No. 142 changes the accounting for goodwill from an amortization
method to an  impairment-only  approach.  Amortization  of  goodwill,  including
goodwill  recorded in past  business  combinations,  will cease upon adoption of
this statement.  The Company is required to implement SFAS No. 142 on January 1,
2002. Management does not expect this statement to have a material impact on the
Company's consolidated financial position or results of operations.

Subsequent  to 2001,  the  account  will only be  reduced  if the value  becomes
impaired.

CONCENTRATION OF RISKS

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

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

                                      F-6





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  33% for the year ended
December 31,  2001,  44% for the year ended  December 31, 2000,  and 39% for the
year ended December 31, 1999.  During 2001,  approximately  99% 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' product for resale is sourced from several suppliers.  In the event that
such sources were no longer in a position to supply Darius 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.

LONG-LIVED ASSETS

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets."  This  statement  supercedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed  Of." The  statement  retains  the  previously  existing  accounting
requirements  related to the  recognition  and  measurement of the impairment of
long-lived   assets  to  be  held  and  used  while  expanding  the  measurement
requirements  of  long-lived  assets  to be  disposed  of  by  sale  to  include
discontinued  operations.  It also  expands the  previously  existing  reporting
requirements  for  discontinued  operations  to include a component of an entity
that either has been disposed of or is classified as held for sale.  The Company
is required to implement  SFAS No. 144 on January 1, 2002.  Management  does not
expect this  statement to have a material  impact on the Company's  consolidated
financial position or results of operations.

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.

                                      F-7





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  did 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 was 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. The Company 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 interpretation
cover specific  events that occurred  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.

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, 2001,  December 31,
2000 and  December 31,  1999,  were  $3,417,064,  $9,296,483,  and  $16,132,888,
respectively. Included in prepaid expenses and other current assets was $419,000
at December  31, 2001 and 2000  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,  2001,  2000  and  1999  were
$1,331,639, $1,185,750, and $297,650, respectively. Principally, the increase of
Research and  Development in 2001 and 2000 was due to expenses  incurred as part
of the costs  related  to the  application  for a pharmacy  drug  license in the

                                      F-8





United Kingdom,  together with research costs of the products related to Quigley
Pharma.

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 5 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 (Cold Remedy Products),  whose main product is Cold-Eeze(R),
a proprietary zinc gluconate glycine lozenge for the common cold; Darius (Health
and  Wellness)  whose  business is the sale and direct  marketing  of a range of
health and wellness  products  and  Caribbean  Pacific  Natural  Products,  Inc.
(Sun-care  and  Skincare   Products),   a  leading  developer  and  marketer  of
all-natural  sun-care and skincare products for luxury resorts,  theme parks and
spas.

Financial information relating to 2001 and 2000 by business segment follows:


AS OF AND FOR THE THREE
MONTHS ENDED DECEMBER 31,                                              Sun-care
2001                                  Cold                               and
                                     Remedy          Health and        Skincare       Corporate and
                                     Products         Wellness         Products           Other             Total
------------------------------------------------------------------------------------------------------------------

Revenues
  Customers                       $ 6,491,652       $ 1,763,209    $   274,060               --          $ 8,528,921
  Inter-segment                          --                --             --                 --                 --
Segment operating profit (loss)     1,731,987          (354,104)      (503,623)       $     4,729            878,989
Total Assets                      $26,726,729       $   826,946    $   882,710        ($3,680,590)       $24,755,795
--------------------------------------------------------------------------------------------------------------------

AS OF AND FOR THE TWELVE
MONTHS ENDED DECEMBER 31,                                              Sun-care
2001                                  Cold                               and
                                     Remedy          Health and        Skincare       Corporate and
                                     Products         Wellness         Products           Other             Total
------------------------------------------------------------------------------------------------------------------

Revenues
  Customers                        $16,704,618       $5,788,579       $2,176,470             --         $24,669,667
  Inter-segment                        116,385         (176,412)           -               $60,027           -
Segment operating profit (loss)      1,170,828         (729,374)        (995,156)          127,705         (425,997)
Total Assets                       $26,726,729         $826,946         $882,710       ($3,680,590)     $24,755,795

                                       F-9




-------------------------------------------------------------------------------------------------------------------
AS OF AND FOR THE THREE
MONTHS ENDED DECEMBER 31,                                              Sun-care
2000                                  Cold                               and
                                     Remedy          Health and        Skincare       Corporate and
                                     Products         Wellness         Products           Other             Total
-----------------------------------------------------------------------------------------------------------------

Revenues
  Customers                         $ 6,639,075      $    11,811    $   455,348              --      $ 7,106,234
  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
-------------------------------------------------------------------------------------------------------------------
AS OF AND FOR THE TWELVE
MONTHS ENDED DECEMBER 31,                                              Sun-care
2000                                  Cold                               and
                                     Remedy          Health and        Skincare       Corporate and
                                     Products         Wellness         Products           Other             Total
-----------------------------------------------------------------------------------------------------------------

Revenues
  Customers                      $ 15,954,927    $     51,300      $    798,866            --           $ 16,805,093
  Inter-segment                       320,623            --                 --      ($   320,623)                --
Segment operating (loss)           (4,645,828)       (936,534)         (229,600)        (123,074)          (5,935,036)
Total Assets                     $ 27,005,069    $    428,210      $    769,202     ($ 2,146,880)        $ 26,055,601


NOTE 3 - PROPERTY, PLANT AND EQUIPMENT

Consisted of the following as of:                      December 31, 2001         December 31, 2000
                                                       -----------------         -----------------

                 Land                                     $  152,203                 $  152,203
                 Buildings and improvements                1,526,292                  1,515,090
                 Machinery and equipment                     872,130                    669,401
                 Computer software                           241,096                    122,715
                 Furniture and fixtures                      221,974                    200,648
                                                          ----------                 ----------
                                                           3,013,695                  2,660,057
                 Less: Accumulated  depreciation             812,386                    520,330
                                                          ----------                 ----------
                 Property, Plant and Equipment, net       $2,201,309                 $2,139,727
                                                          ==========                 ==========

Depreciation  expense for the years ended  December 31, 2001,  December 31, 2000
and December 31, 1999 was $367,368, $277,163, and $142,051, respectively.

NOTE 4 - PATENT RIGHTS AND RELATED ROYALTY COMMITMENTS

During 1996,  the Company  entered into a licensing  agreement  resulting in the
utilization of the zinc gluconate  patent. In return for the acquisition of this
license,  the Company  issued a total of 240,000  shares of common  stock to the
patent holder and attorneys during 1996 and 1997. The related  intangible asset,
approximating $490,000, has been valued at the fair value of these shares at the
date of the grant.  This asset value is being  amortized over the remaining life
of the patent 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.

                                      F-10



The founders receiving 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  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
$1,506,525,  $1,992,497,  and $2,638,727, for the years ended December 31, 2001,
December 31, 2000, and December 31, 1999 respectively. Amounts accrued for these
expenses  at  December  31,  2001  and  December  31,  2000  were  $690,670  and
$1,037,610, respectively.

NOTE 5 - INCOME TAXES

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


                                             Year Ended      Year Ended      Year Ended
                                             December 31,    December 31,   December 31,
                                                 2001            2000           1999
                                          --------------     ------------   ------------

                    Current:
                         Federal                 --                 --      ($1,181,327)
                         State                   --                 --             --
                                          -----------        -----------    -----------
                                                 --                 --       (1,181,327)
                                          -----------        -----------    -----------
                    Deferred:
                         Federal          $    39,771        ($1,701,186)    (1,285,077)
                         State                (76,134)          (223,095)      (605,998)
                                          -----------        -----------    -----------
                                              (36,363)        (1,924,281)    (1,891,075)
                                          -----------        -----------    -----------

                    Valuation allowance        36,363          1,924,281      1,169,787
                                          -----------        -----------    -----------

                    Total                        --                 --      ($1,902,615)
                                          ===========        ===========    ===========


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,
                                          2001            2000             1999
                                       ------------   ------------     ------------

Statutory rate                           ($7,264)   ($1,798,027)   ($2,076,176)
State taxes net of federal benefit       (32,893)      (148,804)      (403,022)
Permanent differences and Other            3,794         22,550       (593,204)
                                     -----------    -----------    -----------
                                         (36,363)    (1,924,281)    (3,072,402)
                                     -----------    -----------    -----------

Less valuation allowance                  36,363      1,924,281      1,169,787
                                     -----------    -----------    -----------
          Total                             --             --      ($1,902,615)
                                     ===========    ===========    ===========


                                      F-11




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,
                                                 2001          2000            1999
                                                 ----          ----            ----

          Net operating loss carry-forward   $ 4,090,077    $ 3,730,923    $ 1,751,199
          Contract termination costs             305,019        378,555        378,555
          Bad debt expense                       263,654        196,879         54,164
          Other                                  133,943        137,488        104,648
          Valuation allowance                 (4,792,693)    (4,443,845)    (2,288,566)
                                             -----------    -----------    -----------
                    Total                           --             --             --
                                             ===========    ===========    ===========


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  for years
prior to 1999.  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,  resulting  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 $8.7 million for federal
purposes,  of which $3.5 million  will expire in 2019,  $5.2 million in 2020 and
$13.9  million for state  purposes,  of which $9.7  million will expire in 2009,
$3.3 million in 2010 and $900,000 in 2011.  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 6 - EARNINGS PER SHARE

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

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

                      Year Ended                    Year Ended                   Year Ended
                  December 31, 2001              December 31, 2000             December 31, 1999
              -------------------------------------------------------------------------------------
              Income   Shares      EPS        Loss     Shares     EPS         Loss   Shares    EPS
              -------------------------------------------------------------------------------------


Basic EPS     $  0.2     10.7    $   0.02    ($ 5.2)    10.5     ($0.49)    ($ 4.2)   11.4    ($0.37)

Dilutives:
Options and
Warrants         --       0.1                    --      --                     --      --
              ------   ------   ---------    ------    ----    ---------    ------    ----  --------
Diluted EPS   $  0.2     10.8     $  0.02    ($ 5.2)   10.5      ($0.49)    ($ 4.2)   11.4    ($0.37)
              ======   ======   =========    =======   ====    =========    ======    ===== ========

At December 31, 2001,  there were  4,014,000  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




NOTE 7 - 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 was amended in 2001 and provides for the granting of
up to three million 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  incentive
stock 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 400,000,  480,000,  and 409,000  options  were granted
under  this Plan  during  the years  ended  December  31,  2001,  2000 and 1999,
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, 2001,  2000 and 1999
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,
                                                     2001            2000             1999
                                                 ----------------------------------------------
          Pro forma net (loss)                     ($28,036)     ($5,434,223)     ($5,246,735)
          Pro forma earnings (loss) per share:
          Basic                                      $0.00          ($0.52)         ($0.46)
          Diluted                                    $0.00          ($0.52)         ($0.46)

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

The Company used the Black-Scholes  pricing model to determine the fair value of
stock  options  granted  during  the  periods   presented  using  the  following
assumptions: expected life of the option of 5 years and expected forfeiture rate
of 0%; expected stock price volatility of 58.9% for 2001,  ranging between 92.8%
and 110% for the year  ended  December  31,  2000 and 59.5%  for the year  ended
December 31, 1999;  expected dividend yield of 1.5% and risk-free  interest rate
of 4.36% for the year ended December 31, 2001,  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, 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.

                                      F-13




A summary of the status of the Company's  stock options and warrants  granted to
both  employees and  non-employees  as of December 31, 2001,  2000, and 1999 and
changes during the years then ended is presented below:

YEAR ENDED DECEMBER 31, 2001:
                                          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           2,747       $ 4.68     1,370        $5.42       4,117        $4.93
Additions/deductions:
  Granted                              355         1.26        45         1.26         400         1.26
  Exercised                             --           --        --          --           --          --
  Cancelled                             93         3.35       410         1.75         503         2.05
                                     ------------------------------------------------------------------
Options/warrants  outstanding
   at end of period                  3,009       $ 4.32     1,005        $6.73       4,014        $4.92
                                     ------------------------------------------------------------------
Options/warrants  exercisable
   at end of period                  3,009                  1,005                    4,014
                                     ==================================================================

Weighted average fair value of
   Grants                            $1.26                  $1.26                    $1.26

Price range of  options/warrants
   Exercised                           -                      -                        -
Price range of options/warrants
   Outstanding                     $0.81-$10.00          $0.81-$10.00             $0.81-$10.00
Price range of options/warrants
   Exercisable                     $0.81-$10.00          $0.81-$10.00             $0.81-$10.00

YEAR ENDED DECEMBER 31, 2000:
                                          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       $4.59      1,480        $5.14     4,279          $4.78
Additions/deductions:
  Granted                               440        1.10         40         0.81       480           1.07
  Exercised                             460        0.50        130         0.50       590           0.50
  Cancelled                              32        7.83         20         7.40        52           7.67
                                   -------------------------------------------------------------------------
Options/warrants  outstanding
   at end of period                   2,747       $4.68      1,370        $5.42     4,117          $4.93
                                   -------------------------------------------------------------------------
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                     $0.81-$10.00           $0.81-$10.00          $0.81-$10.00
Price range of options/warrants
   Exercisable                     $0.81-$10.00           $0.81-$10.00          $0.81-$10.00

                                      F-14




YEAR ENDED DECEMBER 31, 1999:
                                          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
   at end of period                   2,799       $4.59      1,480        $5.14      4,279       $4.78
                                    --------------------------------------------------------------------
Options/warrants  exercisable
   at end of period                   2,799                  1,480                   4,279
                                    ====================================================================
Weighted average fair value of
   Grants                             $1.41                  $1.41                   $1.41

Price range of  options/warrants
   Exercised                          $0.50               $0.75-$2.50             $0.50-$2.50
Price range of options/warrants
   Outstanding                   $0.50-$10.00            $0.50-$10.00             $0.50-$10.00
Price range of options/warrants
   Exercisable                   $0.50-$10.00            $0.50-$10.00             $0.50-$10.00


The following table summarizes  information about stock options  outstanding and
stock options  exercisable,  as granted to both employees and non-employees,  at
December 31, 2001:

                                    EMPLOYEES                                   NON-EMPLOYEES

                                    Weighted                                    Weighted
                                    Average                                      Average
                                    Remaining    Weighted                       Remaining     Weighted
Range of                Number      Contractual  Average        Number          Contractual     Average
Exercise Prices      Outstanding      Life      Exercise Price  Outstanding        Life      Exercise Price
-----------------------------------------------------------------------------------------------------------
$0.81 - $2.06        1,569,000       6.8          $1.43         385,000            5.6          $1.60
$2.50 - $5.12          598,500       6.3          $4.14          10,000            7.3          $5.12
$9.68 - $10.00         841,500       5.7          $9.81         610,000            5.3          $9.99
                     ---------                                ---------
                     3,009,000                                1,005,000
                     =========                                =========

Options  outstanding as of December 31, 2001, 2000 and 1999 expire from June 30,
2006 through December 10, 2011, depending upon the date of grant.

During  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 2001
was approximately $140,000.

                                      F-15




NOTE 8 - STOCKHOLDERS' EQUITY

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

Since the inception of the stock buy-back program in January 1998, the Board has
subsequently  increased  the  authorization  on  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,  2001,  4,159,191  shares  have  been  repurchased  at a  cost  of
$24,042,801 or an average cost of $5.78 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 9 - 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, 2001, December
31,  2000  and  December  31,  1999,  of  $336,123,   $148,041,   and  $137,015,
respectively.  The future minimum lease obligations under these operating leases
are $428,387.

The Company has committed to advertising costs approximating $35,000 relating to
2002.  Additional  advertising cost is expected to be incurred for the remainder
of 2002.

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(R)  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 Court sustained certain objections thereby
narrowing  Plaintiffs'  Complaint.  In May, 2001,  Plaintiffs  filed a Motion to
Certify the Alleged Class.  The Company opposed the Motion.  In November,  2001,
the Court  held a hearing on  Plaintiffs'  Motion  for Class  Certification.  In
January,  2002,  the Court  denied in part and  granted in part the  Plaintiffs'
Motion.  The  Court  denied  Plaintiffs'  Motion  to  Certify  a Class  based on
Plaintiffs' claim under the Pennsylvania  Consumer Protection Law; however,  the
Court  certified  the class based on  Plaintiffs'  breach of warranty and unjust
enrichment    claims.    The    Company    is   filing    for   a   Motion   for
Clarification/Reconsideration   of  this  ruling.   The  Company  is  vigorously
defending  this  lawsuit  although  the Company  believes  that the action lacks
merit.  The  case is at a  stage  where  no  discovery  has  been  taken  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.

                                      F-16



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 scheduled for trial
in Clark County, Nevada, during the week of March 25, 2002. 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 10 - 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, 2001,  2000 and 1999,  amounted to $160,034,  $466,033,
and $370,466,  respectively.  Amounts  payable under such agreements at December
31, 2001 and 2000 were approximately $36,525 and $195,075, respectively.

The Company is in the process of acquiring licenses in certain countries through
related party  entities.  During 2001, fees amounting to $281,250 have been paid
to a related  entity to assist with the  regulatory  aspects of  obtaining  such
licenses.

NOTE 11 - QUARTERLY INFORMATION (UNAUDITED)

                                                                       QUARTER ENDED
                                                    ---------------------------------------------------------
                                                       MARCH 31,     JUNE 30,     SEPTEMBER 30,  DECEMBER 31,
                                                    -----------    -----------    ------------  -------------
2001

Sales                                                $5,198,537     $3,381,951     $7,175,724    $9,468,150
Co-operative advertising promotions                     394,663         42,100        588,931     1,075,593
Net Sales                                             4,803,874      3,339,851      6,586,793     8,392,557
Gross Profit                                          3,018,942      2,881,366      3,876,368     5,277,780
Net Income (loss)                                      (402,909)      (680,443)       313,615       985,701

Basic earnings (loss) per common share                   ($0.04)        ($0.06)         $0.03         $0.09
Diluted earnings (loss) per common share                 ($0.04)        ($0.06)         $0.03         $0.09

2000

Sales                                                $6,614,786     $1,300,111     $3,765,229    $7,684,060
Co-operative advertising promotions                   1,207,900        479,962        293,405       577,826
Net Sales                                             5,406,886        820,149      3,471,824     7,106,234
Gross Profit                                          3,131,958        410,922      2,277,914     5,099,707
Net Income (loss)                                    (3,923,438)    (1,652,290)       114,401       264,854

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

                                      F-17







                     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, 2001,  2000, and 1999, 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 28, 2002
---------------------                                       -----------------
Guy J. Quigley, Chairman of the Board,                            Date
    President, Chief Executive Officer


/s/ George J. Longo                                         February 28, 2002
---------------------                                       -----------------
George J. Longo, Vice President, Chief Financial Officer          Date
   (Principal Financial and Accounting Officer)



                                      F-18





                        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, 2001 and 2000, and the results
of their  operations  and their  cash  flows for each of the three  years in the
period  ended  December  31,  2001  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 15, 2002

                                      F-19





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 2002 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 2002 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 2002 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 2002 Annual Meeting of Stockholders.

                                       19





                                     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)

         10.1(a)   Amendment  No. 1 to 1997 Stock Option Plan  (incorporated  by
                   reference  to  Exhibit  4  of  the   Company's   Registration
                   Statement  on Form S-8 (File No.  333-73456)  filed  with the
                   Commission on November 15, 2001

         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,  as amended,  (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  and the  amendments  to  such  agreement  are  attached
                   hereto)

         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,  as amended,
                   between  the  Company  and George J.  Longo  (the  Employment
                   Agreement is  incorporated  by reference to Exhibit  10.10 of
                   Form  10-KSB  dated  March 30,  1998 and the  amendments  are
                   attached hereto)

                                       20





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

         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
                   February 25, 2002




(b) Reports on Form 8-K

    No reports were filed on Form 8-K in the quarter ended December 31, 2001.

                                       21







SIGNATURES


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


                                                    THE QUIGLEY CORPORATION


   /s/  Guy J. Quigley                                   February 28, 2002
   -----------------------------------------------------------------------
   Guy J. Quigley, Chairman of the Board, President,        Date
          Chief Executive Officer and Director


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


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




/s/ Guy J. Quigley          Chairman of the Board, President,      February 28, 2002
-------------------         Chief Executive Officer and Director   -----------------
Guy J. Quigley



/s/ Charles A. Phillips     Executive Vice President,              February 28, 2002
-----------------------     Chief Operating                        -----------------
Charles A. Phillips         Officer and Director



/s/ George J. Longo         Vice President, Chief Financial        February 28, 2002
----------------------      Officer and Director (Principal        -----------------
George J. Longo             Financial and Accounting Officer)


/s/ Eric H. Kaytes          Vice President, Chief Information      February 28, 2002
----------------------      Officer, Secretary, Treasurer          -----------------
Eric H. Kaytes              and Director



/s/ Jacqueline F. Lewis     Director                               February 28, 2002
-----------------------                                            -----------------
Jacqueline F. Lewis



/s/ Rounsevelle W. Schaum   Director                               February 28, 2002
-------------------------                                          -----------------
Rounsevelle W. Schaum



/s/ Charles A. Genuardi     Director                               February 28, 2002
------------------------                                           -----------------
Charles A. Genuardi

                                      22`