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|     New Jersey                                          |   |     22-2303576              |
|-------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|
| (State      of incorporation)                                                                   |   | (I.R.S.      Employer                                               |
|     Identification      No.)                                                |   |                                                                |
|                                                                                            |   |                                                                |
|     35 Industrial      Pkwy, Branchburg, New Jersey     |   |     08876-3424              |
|   (Address      of principal executive offices)                                       |   | (Zip      Code)                                                     |
|                                                                                            |   |                                                                |
| Registrant's      telephone number, including area code:                                        |   |     (908)      722-5000     |

| Large      accelerated filer   ̈ | Accelerated      filer   ̈ | Non-accelerated      filer   ̈ | Smaller      reporting company  x |
|------------------------------------------------|------------------------------------------|----------------------------------------------|---------------------------------------------|

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|                                                                                                                        |   | Page      No. |
|-----------------------------------------------------------------------------------------------------------------------------|--------|---------------|
| Part      I - Financial Information                                                                                         |   |          |
|                                                                                                                        |   |          |
| #      1  Consolidated Financial Statements                                                                       |   |          |
|                                                                                                                        |   |          |
|     Balance      Sheets - December 31, 2008 & June 30, 2008                                         |   | 2             |
|                                                                                                                        |   |          |
|     Statements of      Income for the three months and six months ended December 31, 2008 and      2007 |   | 3             |
|                                                                                     |   |          |
|     Statements of      Cash Flows for the six months ended December 31, 2008 and    2007                |   | 4             |
|                                                                                                                        |   |          |
|     Notes      to Financial Statements                                                                  |   | 5             |
|                                                                                                                        |   |          |
| #      2  Management's Discussion and Analysis of the Financial      Condition and      Results of Operations     |   | 6             |
|                                                                                                                        |   |          |
| #      3  Controls and Procedures                                                                                 |   | 7             |
|                                                                                                                        |   |          |
|                                                                                                                        |   |          |
| Part      II - Other Information                                                                                            |   |          |
|                                                                                                                        |   |          |
| #      1  Legal Proceedings                                                                                       |   | N/A           |
|                                                                                                                        |   |          |
| #      2  Change in Securities                                                                                    |   | N/A           |
|                                                                                                                        |   |          |
| #      3  Default of  Senior Securities                                                                 |   | N/A           |
|                                                                                                                        |   |          |
| #      4  Submission of Motion to Vote of Security    Holders                                                     |   | N/A           |
|                                                                                                                        |   |          |
| #      5  Other Information                                                                                       |   | N/A           |
|                                                                                                                        |   |          |
| #      6  Exhibits and Reports on form 8-K                                                                        |   | 7             |

| Exhibit      No. | Description of      Exhibit                                                                             |   |
|------------------|---------------------------------------------------------------------------------------------------------|--------|
| 33.1             | SEC Section 302 Certification – CEO      certification                                            | 9      |
|             |                                                                                                    |   |
| 33.2             | SEC Section 302 Certification – CFO      certification                                            | 10     |
|             |                                                                                                    |   |
| 99.1             | Certification of Manfred F. Dyck,      Chief Executive Officer, pursuant to 18 U.S.C. Section      1350 | 11     |
|             |                                                                                                    |   |
| 99.2             | Certification of Robert Y. Lee, Chief      Financial Officer, pursuant to 18 U.S.C. Section 1350        | 12     |

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|                                                                                                                                                                                                       |   | December      31, |      |   | June      30, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|--------|---------------|--------|
|                                                                                                                                                                                                       |   | 2008              |      |   | 2008          |   |
|                                                                                                                                                                                                       |   | UNAUDITED         |      |   | AUDITED       |   |
| Assets                                                                                                                                                                                                     |   |              |      |   |          |   |
|                                                                                                                                                                                                       |   |              |      |   |          |   |
| Current      Assets:                                                                                                                                                                                       |   |              |      |   |          |   |
|   Cash and cash      equivalents                                                                                                                                                                 |   | $                 | 1,040,045 |   |          | $      | 108,403 |   |
|   Trade receivables      less allowance for doubtful accounts of $59,647 and $79,790      as of December 31, 2008 and     June      30, 2008, respectively                   |   |              | 1,037,321 |   |          |   | 1,100,388 |   |
|   Inventory                                                                                                                                                                                      |   |              | 860,188   |   |          |   | 1,022,660 |   |
|   Prepaid      expenses                                                                                                                                                                          |   |              | 147,937   |   |          |   | 149,726 |   |
|   Deferred tax      asset                                                                                                                                                                        |   |              | 8,976     |   |          |   | 8,976 |   |
|   Other                                                                                                                                                                                          |   |              | 9,291     |   |          |   | 7,147 |   |
| Total      Current Assets                                                                                                                                                                                  |   |              | 3,103,758 |   |          |   | 2,397,300 |   |
|                                                                                                                                                                                                       |   |              |      |   |          |   |   |   |
| Property      and equipment, net                                                                                                                                                                           |   |              | 3,299,805 |   |          |   | 3,339,270 |   |
| Deferred      tax asset, non-current                                                                                                                                                                       |   |              | 596,105   |   |          |   | 620,157 |   |
| Intangible      assets, net                                                                                                                                                                                |   |              | 861,120   |   |          |   | 820,858 |   |
| Total      Assets                                                                                                                                                                                          |   | $                 | 7,860,808 |   |          | $      | 7,177,585 |   |
|                                                                                                                                                                                                       |   |              |      |   |          |   |   |   |
| Liabilities      and Stockholders’ Equity                                                                                                                                                            |   |              |      |   |          |   |   |   |
| Current      Liabilities:                                                                                                                                                                                  |   |              |      |   |          |   |   |   |
|   Accounts      payable                                                                                                                                                                          |   | $                 | 496,536   |   |          | $      | 595,412 |   |
|   Short-term      borrowings                                                                                                                                                                     |   |              | -         |   |          |   | 289,973 |   |
|   Accrued      expenses                                                                                                                                                                          |   |              | 305,673   |   |          |   | 345,480 |   |
|   Current portion of      capital lease                                                                                                                                                          |   |              | 13,493    |   |          |   | 13,095 |   |
|   Current portion of      deferred revenue                                                                                                                                                       |   |              | 124,218   |   |          |   | 88,051 |   |
|   Current portion of      mortgage payable                                                                                                                                                       |   |              | 44,320    |   |          |   | 230,160 |   |
|   Income tax      payable                                                                                                                                                                        |   |              | 4,560     |   |          |   | 1,652 |   |
| Total      Current Liabilities                                                                                                                                                                             |   |              | 988,800   |   |          |   | 1,563,823 |   |
| Deferred      tax liability                                                                                                                                                                                |   |              | 281,398   |   |          |   | 281,398 |   |
| Long-term      portion of capital lease                                                                                                                                                                    |   |              | 58,216    |   |          |   | 65,310 |   |
| Long-term      portion of deferred revenue                                                                                                                                                                 |   |              | 39,219    |   |          |   | 49,461 |   |
| Long-term      portion of mortgage payable                                                                                                                                                                 |   |              | 2,844,456 |   |          |   | 1,647,873 |   |
| Total      Liabilities                                                                                                                                                                                     |   |              | 4,212,089 |   |          |   | 3,607,865 |   |
|                                                                                                                                                                                                       |   |              |      |   |          |   |   |   |
| Stockholders’      Equity                                                                                                                                                                            |
| Preferred      stock – no par value, authorized 1,000,000 shares, no shares issued and      outstanding                                                                                              |   |              | -         |   |          |   | - |   |
| Common      stock – no par value, authorized 15,000,000 shares; 4,783,235 shares      issued and 4,772,318 shares outstanding     as of      December 31, 2008 and June 30, 2008 |   |              | 3,721,815 |   |          |   | 3,721,815 |   |
|     Contributed      capital                                                                                                                                                           |   |              | 633,150   |   |          |   | 633,150 |   |
|     Accumulated      deficit                                                                                                                                                           |   |              | (700,106  | )      |          |   | (779,105 | ) |
|     Treasury stock,      10,917 common shares at cost                                                                                                                                  |   |              | (6,140    | )      |          |   | (6,140 | ) |
| Total      Stockholders’ Equity                                                                                                                                                                      |   |              | 3,648,719 |   |          |   | 3,569,720 |   |
| Total      Liabilities and Stockholders’ Equity                                                                                                                                                      |   | $                 | 7,860,808 |   |          | $      | 7,177,585 |   |

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|                                                                                                   |   | Three      Months Ended |      |   | Six      months Ended |   |
|--------------------------------------------------------------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|
|                                                                                                   |   | December      31,       |      |   | December      31,     |   |
|                                                                                                   |   | 2008                    |      |   | 2007                  |   |   | 2008 |   |   | 2007 |   |
|                                                                                                   |   | UNAUDITED               |      |   | UNAUDITED             |   |   | UNAUDITED |   |   | UNAUDITED |   |
| Revenues                                                                                               |   |                    |      |   |                  |   |   |   |   |   |   |   |
|   Sale of      products                                                                      |   | $                       | 1,235,533 |   |                  | $      | 943,558 |   |   | $ | 2,353,601 |   |   | $ | 2,139,261 |   |
|   Service      revenues                                                                      |   |                    | 497,750   |   |                  |   | 413,094 |   |   |   | 1,012,076 |   |   |   | 784,319 |   |
|   Royalties and      Contract Revenues                                                       |   |                    | 416,418   |   |                  |   | 401,874 |   |   |   | 819,993 |   |   |   | 794,159 |   |
|     Total      Revenues                                                            |   |                    | 2,149,701 |   |                  |   | 1,758,526 |   |   |   | 4,185,670 |   |   |   | 3,717,739 |   |
|                                                                                                   |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                                                               |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|   Cost of      Sales                                                                         |   |                    | 854,238   |   |                  |   | 707,317 |   |   |   | 1,646,556 |   |   |   | 1,510,808 |   |
|   Operating      Expenses                                                                    |   |                    | 1,191,534 |   |                  |   | 1,134,681 |   |   |   | 2,344,548 |   |   |   | 2,208,887 |   |
|   Other      Expenses                                                                        |   |                    | 46,916    |   |                  |   | 38,197 |   |   |   | 87,567 |   |   |   | 81,040 |   |
|   Provision for      (Benefit from) Income Taxes                                             |   |                    | 20,320    |   |                  |   | (35,354 | ) |   |   | 28,000 |   |   |   | (45,354 | ) |
|     Total      Expenses                                                            |   |                    | 2,113,008 |   |                  |   | 1,844,841 |   |   |   | 4,106,671 |   |   |   | 3,755,381 |   |
|     Net      Income (Loss)                                                         |   | $                       | 36,693    |   |                  | $      | (86,315 | ) |   | $ | 78,999 |   |   | $ | (37,642 | ) |
|                                                                                                   |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|     Income      (Loss) Per Common Share                                            |   | $                       | 0.01      |   |                  | $      | (0.02 | ) |   | $ | 0.02 |   |   | $ | (0.01 | ) |
|                                                                                                   |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      Average Number of                                                                        |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|          Common      Shares Outstanding                   |   |                    | 4,772,318 |   |                  |   | 4,747,984 |   |   |   | 4,772,318 |   |   |   | 4,725,337 |   |
|          Common      Shares Outstanding assuming dilution |   |                    | 4,773,655 |   |                  |   | n/a |   |   |   | 4,772,986 |   |   |   | n/a |   |

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|                                                                                                                                                        |   | Six      months EndedDecember      31, |                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------------------------|
|                                                                                                                                                        |   | 2008UNAUDITED                          |                      |   | 2007UNAUDITED |   |
| Cash      Flows From Operating Activities:                                                                                                                  |   |                                   |                      |   |   |   |
| Net      Income (Loss)                                                                                                                                      |   | $                                      | 78,999                    |   |   | $ | (37,642 | ) |
| Adjustments      to reconcile net income (loss) to net cash provided by operating      activities                                                           |   |                                   |                      |   |   |   |   |   |
| Depreciation      and amortization                                                                                                                          |   |                                   | 207,339                   |   |   |   | 209,622 |   |
| Charge-off      of Patent Costs                                                                                                                             |   |                                   | 63,242                    |   |   |   | - |   |
| Deferred      income taxes                                                                                                                                  |   |                                   | 24,052                    |   |   |   | (48,219 | ) |
| Changes      in Assets and Liabilities:                                                                                                                     |   |                                   |                      |   |   |   |   |   |
| Trade receivables                                                                                                                                           |   |                                   | 63,067                    |   |   |   | 189,294 |   |
| Inventory                                                                                                                                                   |   |                                   | 162,472                   |   |   |   | 46,391 |   |
| Prepaid expenses                                                                                                                                            |   |                                   | 1,789                     |   |   |   | 39,840 |   |
| Other assets                                                                                                                                                |   |                                   | (2,144                    | ) |   |   | 12,016 |   |
| Accounts payable and accrued      liabilities                                                                                                               |   |                                   | (138,683                  | ) |   |   | (158,579 | ) |
| Deferred income                                                                                                                                             |   |                                   | 25,925                    |   |   |   | 61,858 |   |
| Income taxes    payable                                                                                                                                     |   |                                   | 2,908                     |   |   |   | (2,876 | ) |
| Net      Cash Provided by Operating Activities                                                                                                              |   |                                   | 488,966                   |   |   |   | 311,705 |   |
|                                                                                                                                                        |   |                                   |                      |   |   |   |   |   |
| Cash      Flows From Investing Activities:                                                                                                                  |   |                                   |                      |   |   |   |   |   |
| Cash      purchases of property and equipment                                                                                                               |   |                                   | (92,292                   | ) |   |   | (98,248 | ) |
| Cash      payments on patents and trademarks                                                                                                                |   |                                   | (185,802                  | ) |   |   | (106,680 | ) |
| Net      Cash Used for Investing Activities                                                                                                                 |   |                                   | (278,094                  | ) |   |   | (204,928 | ) |
|                                                                                                                                                        |   |                                   |                      |   |   |   |   |   |
| Cash      Flows From Financing Activities:                                                                                                                  |   |                                   |                      |   |   |   |   |   |
| Net      borrowings against Line of Credit                                                                                                                  |   |                                   | (289,973                  | ) |   |   | (52,470 | ) |
| Repayment      of long-term borrowings                                                                                                                      |   |                                   | (1,889,257                | ) |   |   | (105,950 | ) |
| New      long-term borrowings                                                                                                                               |   |                                   | 2,900,000                 |   |   |   | - |   |
| Proceeds      from the issuance of common stock                                                                                                             |   |                                   | -                         |   |   |   | 78,000 |   |
|  Net      Cash Provided by (Used for) Financing Activities                                                                                             |   |                                   | 720,770                   |   |   |   | (80,420 | ) |
|                                                                                                                                                        |   |                                   |                      |   |   |   |   |   |
| Net      Increase in Cash and Cash Equivalents:                                                                                                             |   |                                   | 931,642                   |   |   |   | 26,357 |   |
| Cash      and Cash Equivalents at Beginning of Period                                                                                                       |   |                                   | 108,403                   |   |   |   | 146,338 |   |
| Cash      and Cash Equivalents at End of Period                                                                                                             |   | $                                      | 1,040,045                 |   |   | $ | 172,695 |   |
|                                                                                                                                                        |   |                                   |                      |   |   |   |   |   |
|                                                                                                                                                        |   |                                   |                      |   |   |   |   |   |
|                                                                                                                                                        |   |                                   |                      |   |   |   |   |   |
| Supplemental      Non-Cash Investing & Financing Activities:    Equipment      acquired under Capital Lease     |   | $                                      |     - |   |   |   |  63,747 |   |

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|                                                     |   | Polymer      Research |                      |   | MedicalProducts |   |                | Corporate      Overhead |   |   | Total    |   |
|----------------------------------------------------------|--------|-----------------------|---------------------------|--------|-----------------|--------|---------------------|-------------------------|--------|--------|----------|--------|
| 2008                                                     |   |                  |                      |   |            |   |                |                    |   |   |     |   |
| Revenues                                                 |   | $                     | 2,419,215                 |   |            | $      | 1,766,455           |                    |   |   |     |   | $ | 4,185,670 |   |
| Expenses                                                 |   |                  | (1,748,483                | )      |            |   | (1,542,106          | )                       |   | $      | (788,082 | )      |   |   | (4,078,671 | ) |
|      Pre-tax      Income (Loss) |   | $                     | 670,732                   |   |            | $      | 224,349             |                    |   | $      | (788,082 | )      |   | $ | 106,999 |   |
|                                                |   |                  |                      |   |            |   |                |                    |   |   |     |   |   |   |   |   |
| 2007                                                     |   |                  |                      |   |            |   |                |                    |   |   |     |   |   |   |   |   |
| Revenues                                                 |   | $                     | 2,102,470                 |   |            | $      | 1,615,269           |                    |   |   |     |   |   | $ | 3,717,739 |   |
| Expenses                                                 |   |                  | (1,620,718                | )      |            |   | (1,392,965          | )                       |   | $      | (787,052 | )      |   |   | (3,800,735 | ) |
|      Pre-tax      Income (Loss) |   | $                     |    481,752 |   |            | $      |   222,304 |                    |   | $      | (787,052 | )      |   | $ | (82,996 | ) |
|                                                     |   |                  |                      |   |            |   |                |                    |   |   |     |   |   |   |   |   |

|   |     | 2008 | 2007 |
|--------|----------|------|------|
|   | Domestic | 83%  | 82%  |
|   | Foreign  | 17%  | 18%  |

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|   | a) | Exhibits      – none |
|--------|----|----------------------------|

|   | b)   | Reports      on form 8-K – The Company filed two Form 8-K’s during the quarter ending      December 31, 2008.   Both 8-K reported press releases      issued by the Company regarding the entering of Sales Representation      Agreements to represent Hydromer and negotiate medical coating services      and royalty/fee based license agreements in China and Taiwan on its      behalf. |
|--------|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                         |   |                           |
|------------------------------|--------|--------------------------------|
|                         |   | HYDROMER,      INC.            |
|                         |   |                           |
|                         |   |                           |
|                         |   | /s/      Robert Y.      Lee,VP |
|                         |   | Robert      Y. Lee             |
|                         |   | Chief      Financial Officer   |
|                         |   |                           |
|                         |   |                           |
| DATE:      February 17, 2009 |

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