<PAGE>   1
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C.20549

                                    FORM 10-Q
                                QUARTERLY REPORT

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



For the quarter ended September 30, 1999         Commission file number 1-11013


                       SPECIALTY CHEMICAL RESOURCES, INC.
                       ----------------------------------
             (Exact name of registrant as specified in its charter)


                      Delaware                    34-1366838
                      --------                    ----------
               (State of incorporation) (I.R.S. Employer I.D. No.)


                  9055 S. Freeway Drive, Macedonia, Ohio  44056
                  --------------------------------------  ------
               (Address of principal executive offices)  (Zip Code)


Registrant's telephone number, including area code:  (330) 468-1380
                                                     --------------



         Indicate by a 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 twelve (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 ninety (90) days.
Yes X   No
   ---    ---.


         The number of outstanding shares of the registrant's common stock as of
September 30, 1999 was 4,257,101. The registrant has no other class of stock
outstanding.

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                                  Page 1 of 17


<PAGE>   2

                       Specialty Chemical Resources, Inc.

                                   Form 10-Q

                    For the quarter ended September 30, 1999

                                     Index



Part I    Financial Information                                            Page


     Item 1.   Financial Statements...........................................3

               Condensed Balance Sheets.......................................3

               Condensed Statements of Operations, 3 Months...................5

               Condensed Statements of Operations, 9 Months...................6

               Condensed Statements of Cash Flows, 3 Months...................7

               Condensed Statements of Cash Flows, 9 Months...................8

               Notes to Financial Statements..................................9

     Item 2.   Management's Discussion and Analysis of
               Financial Condition and Results of Operations.................11

Part II   Other Information

     Item 1.   Legal Proceedings.............................................16

     Item 5.   AMEX Delisting Review.........................................17



                                  Page 2 of 17



<PAGE>   3

                          PART I. FINANCIAL INFORMATION



Item 1.   Financial Statements

                       Specialty Chemical Resources, Inc.

                            Condensed Balance Sheets

<TABLE>
<CAPTION>

                                                       September 30, 1999       December 31, 1998
                                                           (Unaudited)              (Audited)
                                                       ------------------       -----------------
<S>                                                        <C>                     <C>
Current assets
    Cash and cash equivalents                              $      3,100            $         3,100
  Accounts Receivables                                        5,023,705                  4,511,220
  Receivable - other                                            217,849                    359,747
  Inventories - LIFO                                          6,942,363                  6,520,852
  Prepaid expenses                                              227,828                    215,498
                                                           ------------            ---------------
 Total current assets                                        12,414,845                 11,610,417


Property, plant and equipment
    At cost                                                  18,389,743                 18,277,245
    Less accumulated depreciation
     and amortization                                        (7,442,164)                (6,666,274)
                                                           ------------            ---------------
                                                             10,947,579                 11,610,971

Other assets
    Goodwill                                                    845,179                    866,239
    Product Formulation                                         195,446                    408,638
    Deferred Financing Cost                                     676,524                    461,630
    Other                                                        68,371                    211,537
                                                           ------------            ---------------
                                                              1,785,520                   1,948,044
                                                           ============            ================


         Total assets                                      $ 25,147,944            $    $25,169,432
                                                           ============            ================
</TABLE>


See accompanying Notes to Financial Statements.




                                  Page 3 of 17


<PAGE>   4


                       Specialty Chemical Resources, Inc.

                      Condensed Balance Sheets (continued)

<TABLE>
<CAPTION>

                                                                September 30, 1999        December 31, 1998
                                                                    (Unaudited)                (Audited)
<S>                                                                <C>                       <C>
Current liabilities
    Current maturities                                             $  9,736,996              $ 1,176,503
    Accounts payable                                                  3,961,456                3,898,411
    Accrued expenses                                                    817,902                  736,291
                                                                   ------------            -------------
         Total current liabilities                                 $ 14,516,354                5,811,205


Long-term obligations
    Bank revolver and term loans                                              0                9,067,460
    Mortgage loan                                                       980,419                1,085,152
    Convertible subordinated notes                                    6,476,744                4,541,218
    Subordinated notes                                                1,000,181                1,602,850
                                                                   ------------            -------------
         Total long-term obligations                                  8,457,344               16,296,680

Total Current and Long-term Liabilities                              22,973,698               22,107,885


Stockholders' equity
    Preferred stock - $.01 par value;
         authorized 1,996,500 shares
    Common stock - $.10 par value;
         authorized 13,000,000 shares;
         issued 4,257,101 and
         3,947,764 shares respectively                                  425,710                  394,777
    Additional paid in capital                                       41,902,820               41,935,125
    Less common stock in treasury,
         at cost; 65,500 shares                                             ---                 (118,722)
Accumulated deficit                                                 (40,154,284)             (39,149,633)
                                                                   -------------           -------------

                                                                   $  2,174,246                3,061,547
                                                                   ------------            -------------

                                                                   $ 25,147,944            $  25,169,432
                                                                   ============            ============
</TABLE>

See accompanying Notes to Financial Statements.





                                  Page 4 of 17



<PAGE>   5

                       Specialty Chemical Resources, Inc.

                       Condensed Statements of Operations
                                   (Unaudited)

                         For the 3 month periods ended:

<TABLE>
<CAPTION>

                                                     September 30, 1999         September 30, 1998
                                                     ------------------         ------------------
<S>                                                    <C>                         <C>
Net sales                                              $  7,335,476                $  8,611,291

Cost of goods sold                                        5,924,297                   6,958,350
                                                       ------------                ------------
Gross profit                                              1,411,179                   1,652,941

Selling, general and administrative

   expenses                                               1,477,517                   1,548,668
Amortization of intangibles                                 176,508                     106,584
                                                       ------------                ------------
   Operating profit (loss)                                 (242,846)                     (2,311)

Other (income) expense

  Interest expense                                          386,415                    439,363
  Other                                                         -0-                        -0-
                                                       ------------                -----------
                                                            386,415                    439,363
                                                       ============                ===========

     Earnings (loss) before income
     taxes                                                 (629,261)                  (441,674)

Income taxes                                                    -0-                        -0-
                                                       ------------                ------------
     Earnings (loss)                                       (629,261)                  (441,674)
                                                       ============                ===========


Earnings (loss) per common share:                      $       (.15)              $       (.11)


Weighted average shares outstanding                       4,257,101                  3,882,260
</TABLE>


See accompanying Notes to Financial Statements.



                                  Page 5 of 17

<PAGE>   6


                       Specialty Chemical Resources, Inc.

                       Condensed Statements of Operations
                                   (Unaudited)

                         For the 9 month periods ended:

<TABLE>
<CAPTION>

                                                                    September 30, 1999             September 30, 1998
                                                                    ------------------             ------------------
<S>                                                                    <C>                          <C>
Net sales                                                              $23,072,398                  $27,997,442

Cost of goods sold                                                      18,272,389                   22,443,297
                                                                       -----------                  -----------

  Gross profit                                                           4,800,009                    5,554,145
Selling, general and administrative
  expenses                                                               4,261,705                    5,002,429
Amortization of intangibles                                                435,928                      319,718
                                                                       -----------                  -----------
    Operating profit                                                       102,376                      231,998

Other (income) expense
  Interest expense                                                       1,107,027                    1,240,867
  Other                                                                        -0-                          -0-
                                                                       -----------                  -----------
                                                                         1,107,027                    1,240,867
Earnings (loss) before income
  taxes                                                                 (1,004,651)                  (1,008,869)

Income taxes (benefit)                                                         -0-                          -0-
                                                                       -----------                  -----------
     Earnings (loss)                                                    (1,004,651)                  (1,008,869)

Earnings (loss) per common share:                                      $      (.24)                 $      (.26)


Weighted average shares outstanding                                      4,257,101                    3,882,261

</TABLE>


See accompanying Notes to Financial Statements.




                                  Page 6 of 17



<PAGE>   7

                       Specialty Chemical Resources, Inc.

                       Condensed Statements of Cash Flows
                                   (Unaudited)

                         For the 3 month periods ended:

<TABLE>
<CAPTION>

                                                                   September 30, 1999     September 30, 1998
                                                                   ------------------     ------------------
<S>                                                                  <C>                     <C>
Net cash provided (used) by operating
  activities                                                         $  (111,504)            $ 620,959

Cash flows from investing activities:
 Capital expenditures, other                                            (265,287)              (21,538)

      Net cash (used) by investing
       activities                                                       (265,287)              (21,538)

Cash flows from financing activities:
  Payments on revolver                                                (7,427,117)           (9,558,009)
  Proceeds on revolver                                                 7,803,908             8,958,588
                                                                      ----------            ----------
       Net cash provided (used) by
        financing activities                                             376,791              (599,421)
                                                                      ----------            ----------

       Net increase (decrease) in cash
         and cash equivalents                                                -0-                   -0-

Cash and cash equivalents at beginning
  of period                                                                3,100                 3,100
                                                                      ----------             ---------
Cash and cash equivalents at end
  of period                                                           $    3,100             $   3,100
                                                                      ==========             ==========
</TABLE>


See accompanying Notes to Financial Statements.




                                  Page 7 of 17





<PAGE>   8


                       Specialty Chemical Resources, Inc.

                       Condensed Statements of Cash Flows
                                   (Unaudited)

                         For the 9 month periods ended:


<TABLE>
<CAPTION>
                                                                   September 30, 1999     September 30, 1998
                                                                   ------------------     ------------------
<S>                                                                    <C>                    <C>
Net cash provided (used) by operating
  activities                                                           $    19,164            $  (709,514)

Cash flows from investing activities:

  Capital expenditures, other                                             (670,330)              (507,986)

       Net cash (used) by investing
         activities                                                       (670,330)              (507,986)

Cash flows from financing activities:
  Proceeds from notes                                                    1,000,000              1,500,000
  Payments on revolver                                                 (25,129,346)           (31,329,938)
  Proceeds on revolver                                                  24,780,512             31,047,438
                                                                       -----------            -----------
       Net cash provided (used) by
        financing activities                                               651,166              1,217,500
                                                                       -----------            -----------

       Net increase (decrease) in cash
         and cash equivalents                                                  -0-                    -0-

Cash and cash equivalents at beginning
  of period                                                                  3,100                  3,100
                                                                       -----------            -----------
Cash and cash equivalents at end
  of period                                                            $     3,100            $     3,100
                                                                       ===========            ===========
</TABLE>


See accompanying Notes to Financial Statements.




                                  Page 8 of 17



<PAGE>   9


                       Specialty Chemical Resources, Inc.

                          Notes to Financial Statements



Note A - Summary of Significant Accounting Policies


         The accompanying audited and unaudited financial statements have been
prepared in conformity with generally accepted accounting principles and all
adjustments are of a normal recurring nature and are, in the opinion of
management, necessary to present fairly the financial position of Specialty
Chemical Resources, Inc. (the Company) at December 31, 1998 and September 30,
1999 and the results of operations and cash flows for the interim periods ended
September 30, 1999 and 1998.

         Any significant accounting policies employed in the preparation of the
financial statements are included in the Company's most recent Form 10-K.


Note B - Inventories

         Inventories are stated at the lower of cost or market determined by the
last-in, first-out (LIFO) method for raw materials and the first-in, first-out
(FIFO) method for finished goods.

         The Company's inventories consisted of the following at:

<TABLE>
<CAPTION>

                                                     September 30, 1999       December 3l, 1998
                                                     ------------------       -----------------
<S>                                                    <C>                      <C>
    Raw materials                                      $  3,659,473             $ 3,737,239
    Finished goods                                        3,972,494               3,473,217
                                                       ------------             -----------
         Total FIFO cost                                  7,631,967               7,210,456


     Less: Excess of FIFO cost over
                  LIFO                                      689,604                 689,604
                                                       ------------             -----------
         Total LIFO cost                               $  6,942,363             $ 6,520,852
                                                       ============             ===========
</TABLE>





                                  Page 9 of 17

<PAGE>   10



Note C - Treasury Shares

         The Company's Treasury Shares consisted of the following at:

<TABLE>
<CAPTION>

                                                     September 30, 1999       December 31, 1998
                                                     ------------------       -----------------
<S>                                                        <C>                         <C>
    Treasury Shares (at cost)                               ----                    $118,722
      (65,500 shares)

</TABLE>


         On February 11, 1999, the Company used common stock to pay $112,500 of
interest accrued through January 31, 1999 on three $500,000 subordinated
promissory notes for indebtedness, one each to Edwin Roth, Martin Trust and CEW
Partners. A total of 375,000 shares consisting of 309,500 newly issued shares
and 65,500 of Treasury shares at the fair market value of $.30 per share, which
was the average closing price of the common stock for the five consecutive
trading days prior to the day immediately before the payment date, were issued
equally among Edwin Roth, Martin Trust and CEW Partners. (See Liquidity and
Capital Resources).

Note D - Legal Proceedings

         Litigation Regarding Hysan Assets. On September 30, 1999, Specialty
Chemical and Hitail Corporation settled this matter, with Specialty Chemical
receiving $175,000 from the post-closing escrow account.

         Except for the above settlement, there have been no material changes in
the status of legal proceedings pending against the Company other than that
which was reported on the Company's most recent Form 10-K.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Results of Operations

         The following table sets forth, for the periods indicated, the
percentage relationship to net sales of certain items included in the Company's
Statement of Operations.

<TABLE>
<CAPTION>

                                                              Nine Months Ended         Three Months Ended
                                                                September 30,              September 30,
                                                              -----------------         -------------------
                                                               1999        1998          1999          1998
                                                              -----       -----         -----         -----
<S>                                                           <C>         <C>           <C>           <C>
Net sales .............................                       100.0%      100.0%        100.0%        100.0%

Cost of goods sold ....................                        79.2%       80.2%         80.8%         80.8%

  Gross profit ........................                        20.8%       19.8%         19.2%         19.2%

Selling, general and administrative expenses                   18.5%       17.9%         20.1%         18.0%


  Operating profit(loss) ..............                         0.4%        0.8%         (3.3)%         0.0%


Interest expense ......................                         4.8%        4.4%          5.3%          5.1%
</TABLE>


                                  Page 10 of 17

<PAGE>   11


NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO NINE AND THREE
MONTHS ENDED SEPTEMBER 30, 1998:

         Net sales of $23,072,000 for the nine months ended September 30, 1999,
were $4,925,000, or 18%, below the comparable period in the prior year. The
decrease was entirely due to reduced volume that resulted primarily from
production shortfalls in the last six months of 1997 that caused a loss of
customers and a loss of business from several continuing customers throughout
1998 the full effects of which have been felt in 1999 and, to a lesser extent, a
weakening of demand during the third quarter of 1999 from automotive/industrial
customers.

         Net sales of $7,335,000 for the three-month period ended September 30,
1999 were $1,276,000, or 15% below the comparable period in the prior year.
Approximately 86% of the decrease was due to reduced volume that resulted from
production shortfalls in the last six months of 1997 that caused a loss of
customers and a loss of business from several continuing customers throughout
1998 the full effects of which have been felt in 1999, as well as weakened
demand from automotive/industrial customers in the third quarter of 1999.
Approximately 14% of the net sales decrease was due to a lower price mix of
products sold during the quarter.

         Cost of goods sold dollars decreased by $4,171,000 for the nine months
ended September 30, 1999, as compared to the same period in the prior year.
However, 1998 manufacturing overhead benefited from a $300,000 refund of
Worker's Compensation Insurance premiums from prior years. Without the refund,
cost of goods sold decreased by $4,471,000. Approximately 64% of this dollar
decrease in the 1999 period is due to lower volume, with 25% due to lower
manufacturing labor and overhead costs and 11% due to improved material
efficiencies. Cost of goods sold decreased as a percentage of net sales from
80.2% to 79.2% for the nine-month period ended September 30, 1999, as compared
to the same period of the prior year. The decreased percentage was due entirely
to improved material efficiencies.

         Cost of goods sold dollars decreased by $1,034,000 for the three months
ended September 30, 1999 compared to the same period of 1998. Approximately 71%
of this dollar decrease was due to lower volume with 4% due to improved material
efficiencies and 25% due to lower manufacturing labor and overhead costs. Cost
of goods sold as a percentage of net sales was unchanged for the three-month
period ended September 30, 1999 compared to the same period for the prior year.

         Selling, general and administrative expenses were $4,262,000 for the
nine-month period ended September 30, 1999, a reduction of $740,000 as compared
to the same period in 1998. Approximately 45% of the decrease in selling,
general and administrative expense dollars is due to staffing reductions
implemented throughout 1998 and with a downsizing at the beginning of 1999, with
55% due to overhead reduction programs implemented throughout 1998. For the 1999
period, selling general and administrative expense as a percentage of sales has
increased due to the reduction of sales.

         Selling, general and administrative expenses were $1,478,000 for the
three-month period ended September 30, 1999, a reduction of $71,000 as compared
to the same period of 1998. Decreases in selling, general and administrative
expense dollars due to staffing reductions and overhead reduction programs, both
mentioned above, more than offset increased freight and commission costs that
were sales mix related. For the 1999 period, selling general and administrative
expense as a percentage of sales has increased due to the reduction of sales.



                                  Page 11 of 17



<PAGE>   12


         Interest expense was $1,107,000 for the nine months ended September 30,
1999, a decrease of $130,000 from the nine months ended September 30, 1998. The
decrease in interest expense is due to decreased borrowings under the senior
credit facility. See "Liquidity and Capital Resources". Interest expense for the
nine months ended September 30, 1999, was 4.8% of net sales versus 4.4% for the
comparable period in the prior year. The increased percentage was due to the
1999 reduction in net sales.

         Interest expense was $386,000 for the three months ended September 30,
1999, a decrease of $53,000 from the three months ended September 30, 1998. The
decrease in interest expense is due to decreased borrowings under the senior
credit facility. Interest expense for the three months ended September 30, 1999
was 5.3% of net sales versus 5.1% for the comparable period in the prior year.
The increased percentage was due to the 1999 reduction in net sales.

         The Company experienced a net loss for the nine months ended September
30, 1999, of $1,005,000, or $.24 loss per share on weighted average shares
outstanding of 4,257,101. This compared to a net loss of $1,309,000, or $.34
loss per share on weighted average shares outstanding of 3,882,261 for the same
period in the prior year before the inclusion in 1998 of the Worker's
Compensation insurance premium rebate of $300,000. The reported loss in 1998
after the rebate was $1,009,000, or $.26 loss per share. The reduced loss is due
to the cost improvements mentioned above more than offsetting the effects of the
volume decrease.

         The Company experienced a net loss for the three months ended September
30, 1999, of $629,000, or $.15 loss per share on weighted average shares
outstanding of 4,257,101. This compared to a net loss of $442,000, or $.11 loss
per share on weighted average shares outstanding of 3,882,261 for the same
period in 1998. The increased loss is due to the volume decrease more than
offsetting the cost improvements mentioned above.

Liquidity and Capital Resources

         As of September 30, 1999, the Company's ratio of current assets to
current liabilities was 0.86 to 1 and the quick ratio (cash, cash equivalents,
and accounts receivable, divided by current liabilities) was 0.36 to 1.

         During the nine months ended September 30, 1999, the Company incurred
$1,107,000 in interest expense of which $314,000 was accrued to the carrying
value of the convertible subordinated debentures. Total accrued interest
reflected in the carrying value of the convertible subordinated debentures was
$812,000 at September 30, 1999. Cash interest payments totaled $538,000. Accrued
interest payable to banks at September 30, 1999, was $94,000.



                                  Page 12 of 17

<PAGE>   13


         On May 22, 1997 the Company executed an amendment to its current
agreement dated September 18, 1996 (the "Credit Agreement") with its senior
lender Star Bank, N.A. (now Firstar). The amended Credit Agreement provided for
a $15,000,000 facility which expires on December 31, 2000, comprised of a
revolving line of credit and three term loans. Borrowings on the revolving line
of credit and two of the term loans bear interest at the prime rate plus 1.5%,
subject to decrease if certain ratios and financial tests are met. The first of
these two term loans for $2,680,000 amortizes in forty-seven consecutive monthly
installments of $55,833 commencing June 1, 1998 with a forty-eighth and final
principal payment of $55,849. The second of these term loans was paid off in
1997. The third term loan was paid off by the end of the second quarter of 1999.

         Under the terms of the Credit Agreement, the Company is required to
comply with various covenants, the most restrictive of which relates to the
maintenance of certain financial ratios, levels of tangible net worth, limits on
capital expenditures and restrictions on distributions from the Company to its
stockholders. On April 14, 1998, the Company and the senior lender executed a
Second Amendment to the Credit Agreement whereby the senior lender revised the
various financial covenants and required that the Company provide an acceptable
plan to the bank to provide additional capital for the Company. On May 20, 1998
the Company and its senior lender executed a Third Amendment to the Credit
Agreement related to the implementation of the Company's recapitalization plan.
On November 12, 1998, the Company and its senior lender executed a Fourth
Amendment to the Credit Agreement, to allow the Company to issue $1,800,000 of
new Subordinated Convertible Notes pursuant to a rights offering to its
stockholders, to reduce the total credit facility from $15 million to $14
million, to revise repayment schedules for the two continuing term loans and to
revise certain financial covenants. The revised term loan repayment schedule
does not alter the monthly amount of the payments, but restructures the
application of the payments to pay off the higher interest bearing (prime +4.5%)
term loan first and then commence repayment of the lower interest (prime +1.5%)
term loan. On February 15, 1999, Specialty Chemical and its senior lender
executed a Fifth Amendment to the Credit Agreement reducing the amount of the
new Subordinated Convertible Notes from $1,800,000 to $1,360,000 and permitting
the issuance of three unsecured subordinated promissory notes to Edwin Roth,
Martin Trust and CEW Partners in the aggregate amount of $304,800.

         Based on 1998 financial performance, the senior lender has revised the
various covenants in a Sixth Amendment to the Credit Agreement. Such amendment
reduced the total loan facility from $14 million to $12 million and required
Specialty Chemical to obtain an additional $1 million of cash contributions
through either equity or unsecured subordinated debt by June 30, 1999. On April
28, 1999, in satisfaction of its obligation to obtain additional cash, Specialty
Chemical executed an unsecured subordinated note with Harris Trust and Savings
Bank permitting the Company to borrow up to $1 million. Interest on the balance
of this note is payable monthly at the prime rate of Harris Trust and Savings
Bank. The note is due March 31, 2000 and is guaranteed and collateralized by
Edwin Roth, Martin Trust and CEW Partners. As of June 30, 1999, Specialty
Chemical has borrowed $1,000,000 under this note. On August 13, 1999, the
Company and its senior lender executed a Seventh Amendment to the Credit
Agreement satisfying terms of the Sixth Amendment to establish financial
covenants beyond June 30, 1999. The Company currently is not in compliance with
certain financial covenants set by the Seventh Amendment to the Credit
Agreement. The Bank has informed the Company that it is currently evaluating its
response, but has determined that it will not waive any events of default and
that it will impose default interest rates effective November 1, 1999 of prime
plus 3-1/2% annually. As of September 30, 1999, approximately $166,000 was
unused and available under the Credit Agreement. The Company is endeavoring to
refinance the indebtedness under the Credit Agreement. There can be no assurance
that it will be able to do so. The Bank has not notified the Company that the
Bank intends to accelerate this indebtedness. In the event the Bank does so and
in the event that the Company is unable to refinance the indebtedness, the
Company's financial position would be materially impaired.



                                  Page 13 of 17



<PAGE>   14


         During January, 1998, the Company refinanced the mortgage on its
distribution center and corporate offices with a $1,125,000 note with a new
bank. The note, which bears interest at 8.75%, requires twelve monthly interest
only payments until February 1, 1999. Commencing on February 1, 1999, the note
requires 167 monthly principal and interest payments of $11,790, the final
payment being due on November 1, 2012. The borrowing is collateralized by a
facility which serves as the Company's distribution center and corporate
offices.

         On May 20, 1998, the Company issued three $150,000 principal amount
subordinated promissory notes to Martin Trust, CEW Partners and Edwin M. Roth,
respectively (the "Investors"). Such notes were due June 22, 1998. On June 15,
1998, the Company issued three $500,000 principal amount 12% promissory notes
subordinated to the bank (the "Subordinated Notes") to such Investors in part to
refinance the original notes issued on May 20, 1998. Such Subordinated Notes
were originally due December 15, 1998, but were extended to March 15, 1999.
Interest accrued on the Subordinated Notes through January 31, 1999 was paid in
common stock of the Company on February 11, 1999. The Investors and the Company
agreed at the time these loans were made that the Subordinated Notes would be
refinanced with the net proceeds of a pro rata rights offering of Company debt
to its stockholders and its holders of Original Notes (as defined below). On
March 15, 1999, the Company completed an offering of subscription rights to
purchase an aggregate principal amount of $1,360,000 of 6% Convertible
Subordinated Notes due in ten years (the "New Notes") to stockholders and
holders of the 6% Convertible Subordinated Notes due 2006 (the "Original
Notes"). The net proceeds available to the Company from the rights offering were
approximately $1,160,000. The net proceeds of the rights offering were used to
repay a portion of the loans made to the Company by the Investors. As agreed to
by the Investors and the Company, the Company canceled the Subordinated Notes as
payment of each Investor's subscription price for the New Notes. After the
rights offering, Specialty Chemical issued an aggregate of $304,800 in new 12%
subordinated notes on March 15, 1999, due January 15, 2001. These new
subordinated notes were issued to the Investors in an amount equal to the
principal amount of the subordinated notes that exceeded each Investor's
subscription price for the New Notes purchased by each Investor. The principal
and accrued interest on the new subordinated notes will be payable at maturity
in cash, or at the holder's option, in shares of Common Stock based upon the
fair market value of the Common Stock. However, the noteholders may demand full
payment of principal and accrued interest on the new subordinated notes at any
time after the Company has authorized, unissued and unreserved shares of Common
Stock sufficient to pay, in full, the outstanding principal and interest under
all the new subordinated notes. The fair market value will be the average
closing price of the Common Stock on five consecutive trading days prior to the
day immediately before the date that the stockholders authorize the issuance of
Common Stock sufficient to pay all the outstanding principal and interest due
under the new subordinated notes. Such stock was authorized on June 3, 1999 and
a fair market value was established at $.4875 per share.

         Net capital expenditures were $112,000 for the nine months ended
September 30, 1999. In addition, the Company expects to spend approximately
$10,000 in capital expenditures for the balance of the current fiscal year to be
funded from operating cash flows and borrowings under the senior credit
facility. Under current business conditions and pending the senior lenders
response to the Company's non-compliance with certain financial covenants, the
Company expects no significant change in its liquidity position during the
current fiscal year, and the Company believes that cash from operations and the
senior credit facility will be adequate to satisfy the Company's liquidity needs
during the balance of fiscal 1999.



                                  Page 14 of 17



<PAGE>   15


YEAR 2000

         Many computer systems and software products will have trouble
processing data related to the Year 2000. Specialty Chemical has reviewed all of
its information technology and non-information technology computer systems,
computer chips and software products for Year 2000 problems and has determined
that its operations systems and products relating to production and shipments
should not have Year 2000 problems, but that certain financial systems and
products and outsourced payroll systems should be upgraded or replaced.
Specialty Chemical replaced its vendor for outsourced payroll systems and has
completed replacing and testing financial computer systems and software
products. They are now in place and operating.

         During 1998 Specialty Chemical made no expenditures relating to Year
2000 issues and used internal personnel to complete all work on such issues. In
the first half of 1999, Specialty Chemical spent approximately $80,000 to
complete its Year 2000 compliance efforts. No additional expenditures are
anticipated.

         Specialty Chemical has received verbal and written responses from its
material suppliers and vendors regarding their Year 2000 compliance efforts. All
have responded that they either are compliant or have plans to be compliant
prior to the Year 2000. Specialty Chemical's contingency plan for uninterrupted
material supply sources includes maintaining multiple suppliers for most of its
raw materials and identifying back up suppliers for all key materials. However,
if Specialty Chemical's upgrade and replacement plan is not successful, or its
material suppliers or vendors develop Year 2000 problems, then Specialty
Chemical may suffer significant losses which would have a material adverse
effect on its business.

FORWARD-LOOKING STATEMENTS

         Certain statements contained herein that are not statements of
historical facts are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and are thus prospective. Such
forward-looking statements include, without limitation, statements regarding
expected financial performance, ongoing business strategies and possible future
action that the Company intends to pursue in order to achieve strategic
objectives. Such forward-looking statements are subject to risks, uncertainties
and other factors that could cause actual results to differ materially from
future results expressed or implied by such forward-looking statements.
Important factors that could cause actual results to differ materially from the
results expressed or implied by any forward-looking statements ("Cautionary
Statements") include general economic conditions, conditions in the Company's
industry, the uncertainty of availability of net operating loss carryovers, the
outcomes of certain environmental and legal proceedings, the senior lender's
prospective response to the Company's non-conformance with certain financial
covenants and the adequacy of Year 2000 compliance measures. All subsequent
written and oral forward-looking statements relating to the matters described
herein and attributable to the Company or to persons acting on behalf of the
Company are expressly qualified in their entirety by the Cautionary Statements.



                                  Page 15 of 17


<PAGE>   16



Part II - Other Information

ITEM 1.   LEGAL PROCEEDINGS

         Litigation Regarding Hysan Assets. On September 30, 1999, Specialty
Chemical and Hitail Corporation settled this matter, with Specialty Chemical
receiving $175,000 from the post-closing escrow account.

         Except for the above settlement, there have been no material changes in
the status of legal proceedings pending against the Company other than that
which was reported on the Company's most recent Form 10-K.

ITEM 5.   AMEX DELISTING REVIEW

          Specialty Chemical has been notified by AMEX that the Exchange staff
has made a determination to remove the Company from listing and registration on
the American Stock Exchange. The Company is appealing that determination. The
appeal meeting has been scheduled for December 8, 1999.



                                  Page 16 of 17


<PAGE>   17
                                   Signatures


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

         Specialty Chemical Resources, Inc.




         By:/s/ David F. Spink                               November 22, 1999
         ------------------------------------------
           David F. Spink
           Vice President, Chief Financial Officer,
           Treasurer, and Asst. Secretary



                                  Page 17 of 17