UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)
  /X/   Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
        Exchange Act of 1934 For the Quarterly Period Ended: September 30, 2001

                                       or

  / /   Transition Report Pursuant to Section 13 or 15 (d) of the Securities
        Exchange Act of 1934 For the Period from __________ to __________

                         Commission File Number: 0-6333
                                                 ------

                            HYDRON TECHNOLOGIES, INC.
                            -------------------------
             (Exact name of Registrant as specified in its charter)


           New York                                   13-1574215
           --------                                   ----------
(State or other jurisdiction of        (I.R.S. Employer Identification Number)
 incorporation or organization)


2201 West Sample Road, Building 9, Suite 7B
Pompano Beach, FL 33073                                  (954) 861-6400
-----------------------                                  --------------
(Address of Principal Executive Offices)         (Registrant's telephone number)




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.

 Number of shares of common stock outstanding as of October 31, 2001: 4,975,136

<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                                      Index


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

   Condensed consolidated balance sheets-- September 30, 2001 and December 31,
   2000

   Condensed consolidated statements of operations -- Three months ended
   September 30, 2001 and 2000; nine months ended September 30, 2001 and 2000

   Condensed consolidated statements of cash flows -- Nine months ended
   September 30, 2001 and 2000

   Notes to condensed consolidated financial statements

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


PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K


Signatures

                                       2
<PAGE>
<TABLE>
<CAPTION>
                             HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                               Condensed Consolidated Balance Sheets

                                                           September 30, 2001    December 31, 2000
                                                              (Unaudited)             (Note)
                                                           ------------------    -----------------
ASSETS
<S>                                                          <C>                   <C>
Current Assets
      Cash and cash equivalents                              $    174,063          $    190,946
      Trade accounts receivable                                    95,745               136,306
      Inventories                                               1,399,945             1,489,396
      Prepaid expenses and other current assets                    28,776                39,619
                                                             ------------          ------------
                                    Total current assets        1,698,529             1,856,267

Property and equipment, less accumulated
          depreciation of $546,230 and $931,232 at
          2001 and 2000, respectively                              36,463               111,002
Deposits                                                           38,697                60,403
Deferred product costs, less accumulated
          amortization of $5,410,502 and $5,194,952 at
          2001 and 2000, respectively                             557,293               772,843
                                                             ------------          ------------
                                    Total Assets             $  2,330,982          $  2,800,515
                                                             ============          ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
      Accounts payable                                       $     89,680          $    194,791
      Customer Deposits                                           209,618                    --
      Accrued liabilities                                         481,163               464,084
                                                             ------------          ------------
          Total current liabilities                               780,461               658,875

Commitments and contingencies                                          --                    --

Shareholders' equity
      Common stock - $.01 par value
          30,000,000 shares authorized; 5,035,336 shares
          issued; and 4,975,136 shares outstanding                 50,353                50,353
      Preferred Stock - $.01 par value
          5,000,000 shares authorized; no shares
          issued or oustanding                                         --                    --
      Additional paid-in capital                               19,501,837            19,501,837
      Accumulated deficit                                     (17,562,511)          (16,971,392)
      Treasury stock, at cost; 60,200 shares                     (439,158)             (439,158)
                                                             ------------          ------------
          Total Shareholders' equity                            1,550,521             2,141,640

                                                             ------------          ------------
          Total liabilities and shareholders' equity         $  2,330,982          $  2,800,515
                                                             ============          ============

Note:      The balance sheet at December 31, 2000 has been derived from the
           audited financial statements at that date but does not include all of
           the information and footnotes required by generally accepted
           accounting principles for complete financial statements.

            See notes to condensed consolidated financial statements.
</TABLE>
                                                 3
<PAGE>
<TABLE>
<CAPTION>
                                 HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                               Condensed Consolidated Statement of Operations
                                                 (Unaudited)

                                       Three months ended September 30,     Nine months ended September 30,
                                            2001               2000             2001               2000
                                         -----------       -----------       -----------        -----------
<S>                                      <C>               <C>               <C>                <C>
Net Sales                                $   507,293       $   375,063       $ 1,354,143        $ 1,655,315
Cost of sales                                214,039           112,260           412,079            550,775
                                         -----------       -----------       -----------        -----------
Gross profits                                293,254           262,803           942,064          1,104,540

Expenses
     Royalty expense                          18,059            16,986            61,118             80,939
     Research and development                 41,924            18,259            82,067             58,268
     Selling, general & administration       374,429           491,990         1,099,498          1,446,199
     Depreciation & amortization              99,600           111,300           298,800            333,900
                                         -----------       -----------       -----------        -----------
         Total expenses                      534,012           638,535         1,541,483          1,919,306

                                         -----------       -----------       -----------        -----------
Operating loss                              (240,758)         (375,732)         (599,419)          (814,766)

Interest income                                3,744             4,540             8,299             16,390
                                         -----------       -----------       -----------        -----------
         Loss before income taxes           (237,014)         (371,192)         (591,120)          (798,376)

Income taxes expense                              --                --                --                 --
                                         -----------       -----------       -----------        -----------
         Net loss                        $  (237,014)      $  (371,192)      $  (591,120)       $  (798,376)
                                         ===========       ===========       ===========        ===========

Basic and diluted loss per share
     Net loss per common share           $     (0.05)      $     (0.07)      $     (0.12)       $     (0.16)
                                         ===========       ===========       ===========        ===========

                          See notes to condensed consolidated financial statements.
</TABLE>
                                                     4
<PAGE>
<TABLE>
<CAPTION>
                          HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                        Condensed Consolidated Statements of Cash Flow
                                          (Unaudited)

                                                              Nine months ended September 30,
                                                                   2001              2000
                                                                 ---------        ---------
<S>                                                              <C>              <C>
Operating Activities

Net Loss                                                         $(591,120)       $(798,376)
     Adjustments to reconcile net loss to
      Net Cash used by operating activities
          Depreciation and amortization                            298,800          333,900

     Change in operating assets and liabilities
          Trade accounts receivables                                40,561          (57,749)
          Inventories                                               89,451          (74,599)
          Prepaid expenses and other current assets                 10,843           49,652
          Deposits                                                  21,706          118,241
          Accounts payable                                        (105,110)          (6,436)
          Customer deposits                                        209,618               --
          Accrued liabilities                                       17,079            2,233
                                                                 ---------        ---------
     Net cash provided (used) by operating activities               (8,172)        (433,134)


Investing activities
     Capital expenditures, net                                      (8,711)            (537)
     Proceeds from liquidation of joint venture                         --           62,721
                                                                 ---------        ---------
          Net cash provided (used) by investing activities          (8,711)          62,184

                                                                 ---------        ---------
          Net increase (decrease) in cash and cash equivalents     (16,883)        (370,950)

Cash and cash equivalents at beginning of period                   190,946          653,916
                                                                 ---------        ---------
Cash and cash equivalents at end of period                       $ 174,063        $ 282,966
                                                                 =========        =========
</TABLE>
                   See notes to condensed consolidated financial statements.

                                              5
<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note A -- Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management of Hydron Technologies, Inc.
(the "Company"), all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine month periods ended September 30, 2001 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2001. For further information, refer to the consolidated financial
statements and footnotes included in the Company's Annual Report on Form 10-K
for the year ended December 31, 2000.


Note B - Inventories

Inventories consist of the following:
                                            September 30,       December 31,
                                                2001                2000
                                            -------------       ------------

     Finished goods                         $   804,200         $   869,082
     Raw material and components                595,745             620,314
                                            -----------         -----------
                                            $ 1,399,945         $ 1,489,396
Note C - Distribution

- Catalog Sales

In November 1996, Hydron Technologies, Inc. (the Company) opened a new channel
of distribution for Hydron products with the launch of its proprietary Catalog.
The Catalog provides information on new Hydron products, educates consumers on
proper skin and hair care and facilitates re-ordering. The orders are taken by
phone, mail and through the Company's redesigned Hydron website
(www.hydron.com).

- Direct Response Television

Effective September 1, 1999, the Company entered into a 24-month marketing and
distribution agreement (the "Home Shopping Agreement") with HSN that grants HSN
an exclusive worldwide license to market and distribute certain of the Company's
proprietary consumer products through various forms of electronic retailing. The
Home Shopping Agreement also granted HSN a non-exclusive license to market
Hydron products through all other methods of distribution in certain countries
outside the United States.

                                       6
<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note C - Distribution (Continued)

The Company launched its products on HSN's primary domestic television network
on September 16, 1999. Hydron products were featured in "Hydron Skin Care
Solutions" hours during only 7 of the first 12 months of the 24-month Home
Shopping Agreement. In November 2000, during the second twelve months of the
Home Shopping Agreement, the Company began marketing on HSE (Home Shopping
Espanol), the Spanish language subsidiary of HSN. Hydron amended the HSN
agreement with a two-year commitment with HSE to air Hydron products through
Latin programming in the United States and internationally.

HSN had not met its significant purchase commitments and consequently the HSN
Agreement expired in September 2001. Management is considering remedies, legal
and otherwise, to offset HSN's purchase shortfall. The purchase shortfall by HSN
has had a material adverse effect on the Company's business over the last two
years. Sales through HSN were 7% and 31% of the Company sales during the nine
months ended September 30, 2001 and 2000, respectively. Management is confident
that there are other avenues for selling its products now that the exclusive HSN
contract has ended.

The Company continues to sell certain products to QVC, on a non-exclusive basis,
so that QVC can resell these products to their customers who had previously
purchased the products and wish to re-order. Hydron was featured on QVC from
1993 through May 1999.

- Private Label Contracting

In March 2001 the Company signed a contract with a U.S. corporation to provide
exclusive skin care products based on Hydron's patented formula technology. The
first shipment was August 2001. The product launch included, facial
moisturizers, skin treatment products and related prestige quality formulas. The
contract has escalating minimums over three years to maintain exclusivity.

- International

The majority of the Company's products are currently sold in the United States.
The Company entered an agreement in 1995 with an Australian-based health and
beauty products distributor, Doctors Formula Pty. Ltd., to market Hydron
products in retail salon stores and medical offices in Australia and New
Zealand. The Company entered into a distribution agreement with a distributor in
Taiwan in April 2001. The first shipment to Taiwan was in May. The Company also
distributes dental products into Spain and, to a lesser extent, other countries.
Although this category is not significant at this time, it represents the
foundation for future growth in a potentially large channel of distribution.

                                       7
<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note D - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
                                                          Three Months Ended          Nine Months Ended
                                                             September 30,              September 30,
                                                          2001          2000          2001          2000
                                                       ----------    ----------    ----------    ----------
<S>                                                    <C>           <C>           <C>           <C>
Numerator:
  Net income (loss) is both the numerator
    for basic earnings per share (income
    available to common shareholders)
    and the numerator for diluted earnings per share
    (income available to common shareholders
    after assumed conversions or exercise
    of outstanding options and warrants,
    if dilutive)                                       $ (237,014)   $ (371,192)   $ (591,120)   $ (798,376)
                                                       ==========    ==========    ==========    ==========
Denominator:
  Denominator for basic earnings per share
    (weighted-average shares)                           4,975,136     4,975,136     4,975,136     4,975,136
 Effect of dilutive securities: Stock options
    and warrants                                               --            --            --            --
                                                       ----------    ----------    ----------    ----------
  Denominator for dilutive earnings per share
    (adjusted weighted-average)                         4,975,136     4,975,136     4,975,136     4,975,136
                                                       ==========    ==========    ==========    ==========

Basic and diluted earnings per share                   $     (.05)   $     (.07)   $     (.12)   $     (.16)
                                                       ==========    ==========    ==========    ==========
</TABLE>

Options and warrants to purchase 350,000 shares of common stock were outstanding
at September 30, 2001, but were not included in the computation of diluted
earnings per share because the effect would be anti-dilutive to the net loss per
share for the period.

                                       8
<PAGE>

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

Business

Hydron Technologies, Inc. markets a broad range of consumer and oral health care
products using a moisture-attracting ingredient (the "Hydron(R) polymers"), and
owns a non-prescription drug delivery system for topically applied
pharmaceuticals, which uses such polymer. The Company holds U.S. and
international patents on what Management believes is the only known cosmetically
acceptable method to suspend the Hydron polymer in a stable emulsion for use in
personal care/cosmetic products. The Company has concentrated its sales and
development activities primarily on the application of these biocompatible,
hydrophilic polymers in various personal care/cosmetic products for consumers
and, to a lesser extent, oral-care products for dental professionals. The
Company entered into a license agreement for supply of the polymer with National
Patent Development Corp. ("National Patent"), which provides for reciprocal
royalty payments based on the sale of certain of each party's products. The
Company currently has thirty-nine individual products available (excluding shade
variations) in the following product lines: skin care (22 products), hair care
(7 products), bath and body (8 products) and sun care (2 products). Of the
Company's products, nine are Over-The-Counter (OTC) drug products.

The Company is developing other cosmetic/personal care and OTC drug products for
consumers using Hydron polymers. The Company intends to continue to explore
using its technology as a topical drug delivery system and would, when
appropriate, either seek licensing arrangements with third parties, or develop
and market proprietary products through its own efforts.

The Company is also researching and developing new technology-based and possibly
patentable skin treatment systems that would augment its product line. When
appropriate, The Company may license existing technology to secure exclusive
marketing rights.

Management believes that the Company's Hydron product lines are unique and offer
the following competitive benefits: the moisturizers self-adjust to match the
skin's optimal pH balance soon after they are applied to the skin; they become
water-insoluble on the skin's surface, and unlike all other water-based cremes
and lotions, are not removed by the skin's perspiration or plain water; they are
oxygen-permeable and leave no greasy after-feel; they do not emulsify the skin's
natural moisturizing agents, as do conventional cremes and lotions; and they
attract and hold water, creating a cushion of moisture on the skin's surface
that promotes penetration of other beneficial product ingredients. The Company's
products are dermatologist tested and approved for all skin types. Products for
use around the eye area are also ophthalmologist tested and safe for contact
lens wearers. Most of the Company's moisturizing products are based on the
Company's patented emulsion system, which permits the product ingredients to
deliver their intended benefits over an extended period of time and in a more
efficient manner.

Hydron products had been marketed on QVC through regularly scheduled hour-long
programs from April 1994 through May 1999 under licensing agreement. The Company
continues to sell certain products to QVC, on a non-exclusive basis, so that QVC
can resell these products to their customers who had previously purchased the
products and wish to re-order Hydron products.

                                       9
<PAGE>


Business (Continued)

Effective September 1, 1999, the Company entered into a two year marketing and
distribution agreement (the "Home Shopping Agreement") with HSN that granted HSN
an exclusive worldwide license to market and distribute certain of the Company's
proprietary consumer products through various forms of electronic retailing. The
Home Shopping Agreement also granted HSN a non-exclusive license to market
Hydron products through all other methods of distribution in certain countries
outside the United States.

The Company launched its products on HSN's domestic television network on
September 16, 1999 and aired the Hydron line during seven of the first twelve
months of the Agreement. In the Agreement HSN made contractual commitments for
$2.5 million in purchases during the first 12 months. HSN did not meet its
purchase commitment for the first 12 months.

Management continued to work with HSN to increase sales through their network in
the second twelve months of the Agreement. In November 2000, the Company began
marketing on HSE (Home Shopping Espanol), the Spanish language subsidiary of
HSN. Hydron amended the HSN Agreement to air Hydron products on HSE's
Spanish-language television shopping programming in the United States and
internationally. Hydron retained Charytin Goyco, a well-known Latin celebrity,
as Spokesperson for the Latin American Market. The HSE programs have aired in
Domestic Latin markets, Puerto Rico, and Mexico.

In November 1996, the Company opened a new direct channel of distribution for
Hydron products with the launch of its proprietary catalog. This full color
catalog offers the Company's personal care products for sale directly to
consumers. The catalog also provides information on new Hydron products,
educates consumers on proper skin and hair care and facilitates re-ordering.
Direct sales also include sales of products from the Hydron website
(www.hydron.com) which was redesigned and re-launched in January 2001. The
Company is currently exploring new ways to enhance Direct sales and operations.

In March 2001, the Company was contracted to provide a major international
multilevel marketing corporation with exclusive skin care products based on
Hydron's patented formula technology. The product line includes facial
moisturizers, skin treatment products and related prestige quality formulas. The
contract has escalating minimum sales requirements over three years to maintain
exclusivity. The first order has been received and the initial shipments were
made in August 2001.

On an international level, Hydron was introduced into Puerto Rico and Mexico in
2001 through television sales. The Hydron distributor in Taiwan reports brand
distribution in 300 pharmacy and Dermatologist doors since April 2001. Hydron is
also distributed in Australia. Management is reviewing additional opportunities
to expand its consumer products through international retail marketing and
distribution methods.

The majority of Hydron products are sold in connection with direct marketing
through its proprietary catalog. HSN has not met its contractual purchase
commitments and the HSN Agreement expired in September 2001. Management is
considering remedies, legal and otherwise, to offset HSN's purchase shortfall.
The purchase shortfall by HSN has had a material adverse effect on the Company's
business. Sales through HSN were 7% and 31% of the Company sales during the nine
months ended September 30, 2001 and 2000, respectively. Management is confident
that there are other avenues for selling its products now that the exclusive HSN
contract has ended.

                                       10
<PAGE>

Results of Operations

Net sales for the three months ended September 30, 2001 were $507,293; an
increase of $132,230, or 35%, from net sales of $375,063 for the three months
ended September 30, 2000. Net sales for the nine months ended September 30, 2001
were $1,354,143; a decrease of $301,172, or 18%, from net sales of $1,655,315
for the nine months ended September 30, 2000.

Catalog net sales for the three months ended September 30, 2001 were $266,947; a
decrease of $9,266, or 3%, from catalog net sales of $276,213 for the three
months ended September 30, 2000. Catalog net sales for the nine months ended
September 30, 2001 were $905,220, an increase of $109,813, or 14% from catalog
net sales of $795,407 for the nine months ended September 30, 2000.

The decrease in catalog sales for the three months ended September 30, 2001 was
due to a temporary reduction in sales following September 11th terrorist attack.
The increase in catalog sales for the nine months ended September 30, 2001 was
the result of an overall strategic effort to improve catalog activity to current
customers and to former Hydron/QVC infomercial customers. The Company has begun
testing new direct marketing programs targeted at new potential customers.
Further testing will determine new catalog marketing programs for future
expansion.

Non-catalog net sales, including HSN, QVC, private label and international, for
the three months ended September 30, 2001 were $240,346; an increase of
$141,496, or 143%, from non-catalog net sales of $98,850 for the three months
ended September 30, 2000. Non-catalog net sales for the nine months ended
September 30, 2001 were $448,923; a decrease of $410,985, or 48%, from
non-catalog net sales of $859,908 for the nine months ended September 30, 2000.
The quarterly non-catalog sales reflect the beginning of shipments to our
private label customer and an increase in international sales. The decrease in
non-catalog sales for the nine month period resulted primarily from lower net
sales to HSN. QVC sales were also below a year ago reflecting an anticipated
steady volume decline, as Hydron has not been actively marketed to the QVC's
customers since May 1999.

Approximately 4% of the Company's sales for the three months ended September 30,
2001, were from HSN and QVC, down from 25% for the three months ending September
30, 2000. Approximately 17% and 52% of the Company's sales during the nine
months ended September 30, 2001 and 2000, respectively, were to HSN and QVC.
Management anticipates that television sales will continue to be a smaller
percentage of the Company's sales and, absent the consummation of marketing or
distribution arrangements with third parties other than HSN, the Company's
dependence upon direct response television as a distribution channel will be
reduced.

The Company's overall gross profit margin for the three months ended September
30, 2001 was 58%, as compared to 70% for the three months ended September 30,
2000. The Company's overall gross profit margin for the nine months ended
September 30 was 70% for 2001 and 67% for 2000. The decrease in gross profit
margins for the third quarter reflect the fact that non-catalog sales have lower
margins made up a larger portion of the Company's total sales.

                                       11
<PAGE>

Results of Operations (Continued)

The gross profit margin on catalog sales for the three months ended September
30, 2001 was 80%, as compared to 85% for the three months ended September 30,
2000. The gross profit margin on catalog sales for the nine months ended
September 30, 2001 was 81%, as compared to 83% for the nine months ended
September 30, 2000. The decrease in the catalog gross profit margin for the
three months ended September 30, 2001 was a result of a shift of product mix.
The catalog gross profit margin for the nine months ended September 30, 2001 was
maintained at parity with year ago.

The gross profit margin on non-catalog sales for the three months ended
September 30, 2001 was 40%, as compared to 55% for the three months ended
September 30, 2000. The gross profit margin on non-catalog sales for the nine
months ended September 30, 2001 was 49%, as compared to 59% for the nine months
ended September 30, 2000.

Research and development ("R&D") expenses reflect the Company's efforts to
identify new product opportunities, develop and package the products for
commercial sale, perform appropriate efficacy and safety tests, and conduct
consumer panel studies and focus groups. R&D expenses for the three months ended
September 30, 2001 were $41,924, an increase of $23,665, or 130%, from R&D
expenses of $18,259 for the three months ended September 30, 2000. R&D expenses
for the nine months ended September 30, 2001 were $82,067, an increase of
$23,799, or 41%, from R&D expenses of $58,268 for the nine months ended
September 30, 2000. The amount of R&D expenses per year varies, depending on the
nature of the development work during each year, as well as the number and type
of products under development at such time.

Selling, general and administrative ("SG&A") expenses for the three months ended
September 30, 2001 were $374,429; a decrease of $117,561, or 24%, from SG&A
expenses of $491,990 for the three months ended September 30, 2000. Such
expenses for the nine months ended September 30, 2001 were $1,099,498; a
decrease of $346,701, or 24 %, from SG&A expenses of $1,446,199 for the nine
months ended September 30, 2000. The decrease in both periods was principally
due to reduced television selling expenses, warehouse costs, catalog advertising
expenses and consulting fees.

The Company is currently operating at a break-even cash flow rate while
carefully investing in the future. Excluding some one-time charges occurring
principally in the third quarter the net cash flow for the nine-month period
would have increased $138,000. During the nine months there have been several
one-time expenses that reduced operating results, including: research and
development expenses regarding new technologies, their related legal expenses,
and, moving costs associated with the relocation of the corporate offices to
Pompano Beach

Interest and investment income for the three months ended September 30, 2001 was
$3,744, a decrease of $796, or 18%, from interest and investment income of
$4,540 for the three months ended September 30, 2000. Interest and investment
income for the nine months ended September 30, 2001 was $8,299, a decrease of
$8,091, or 49%, from interest and investment income of $16,390 for the nine
months ended September 30, 2000. These decreases were due to lower cash balances
in the 2001 periods compared to the 2000 periods. The Company maintains a
conservative investment strategy, deriving investment income primarily from U.S.
Treasury securities.

                                       12
<PAGE>

Results of Operations (Continued)

The net loss for the three months ended September 30, 2001 was $237,014, as
compared to a net loss of $371,192 for the three months ended September 30,
2000. The net loss for the nine months ended September 30, 2001 was $591,120, as
compared to a net loss of $798,376 for the nine months ended September 30, 2000.
The decrease in the net losses resulted primarily from the factors discussed
above.



Liquidity and Financial Resources

The Company's working capital was approximately $918,067 at September 30, 2001,
including cash and cash equivalents of approximately $174,063.

Investing activities for the nine months ended September 30, 2001 were limited
to $8,711 for capital expenditures.

There were no financing activities during the nine months ended September 30,
2001.

The Company has incurred significant losses over the past four years. The
ability of the Company to continue, as a going concern is dependent on
increasing sales and reducing operating expenses.

Management's plan to increase sales and reduce operating expenses includes
several specific actions. Catalog sales will be emphasized since they have
higher profit margins and represent markets that are growing more rapidly than
the Company's traditional television market. Direct marketing techniques will be
used to reach new and current consumers such as promotions mailed to targeted
consumers, Web site specials, promotions to other Web site customers, and direct
e-mail promotions to current customers. Management also plans to increase
international expansion at a controlled level. In addition, the Company is
considering the possibility of raising funds through a private placement stock
offering in order to develop new innovative products.

Based on the above plan and the Company's present cash position, the absence of
any short or long term debt, arrangements with third parties for contractual
manufacturing and R&D, and the Company's present business strategy, management
believes that the Company has adequate resources to meet normal, recurring
obligations, for at least the next twelve months, as they become due.

The Company does not have the financial resources to sustain a national
advertising campaign to market its products in a conventional retail mode. In
view of the foregoing, Management's strategy has been to enter into marketing,
licensing and distribution agreements with third parties (such as HSN, QVC,
private label agreements) which have greater financial resources than those of
the Company and that can enhance the Company's product introductions with
appropriate national marketing support programs.

The effect of inflation has not been significant upon either the operations or
financial condition of the Company.

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<PAGE>

Cautionary Statement Regarding Forward Looking Statements

Certain statements contained in this Report on Form 10-Q are forward looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including statements
regarding the Company's expectations, hopes, intentions, beliefs or strategies
regarding the future. Forward looking statements include the Company's
liquidity, anticipated cash needs and availability, and the anticipated expense
levels under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations." All forward looking statements included in
this document are based on information available to the Company on the date of
this Report, and the Company assumes no obligation to update any such forward
looking statement. It is important to note the Company's actual results could
differ materially from those expressed or implied in such forward looking
statements. You should also consult the Company's Annual Report on Form 10-K for
the year ended December 31, 1998 as well as those factors listed from time to
time in the Company's other reports filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 and the Securities
Act of 1933.

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<PAGE>

Part II - Other Information

Item 6.  Exhibits and Reports On Form 8-K

A - Exhibits - 27.1 - Financial Data Schedule


B - Current report on Form 8-K
         Date of Report, June 29, 2000, reporting items 4 and 7.
         Date of Report, May 31, 2000, reporting items 4 and 7.

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<PAGE>

                                   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.


                                              HYDRON TECHNOLOGIES, INC.


                                              By: /s/ William A. Fagot
                                              ------------------------
                                              William A. Fagot
                                              Chief Financial Officer

Dated: November 14, 2001

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