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, 1999

                                       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)


1001 Yamato Road, Suite 403
Boca Raton, Florida 33431                                 (561) 994-6191
-------------------------                                 --------------
(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 November 5, 1999: 4,975,136.

                                  Page 1 of 20

<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                                      Index


Part I. Financial Information
-----------------------------

Item 1. Financial Statements (Unaudited)

   Condensed  consolidated balance sheets -- September 30, 1999 and December 31,
   1998

   Condensed  consolidated  statements  of  operations  --  Three  months  ended
   September 30, 1999 and 1998; nine months ended September 30, 1999 and 1998

   Condensed  consolidated  statements  of  cash  flows  --  Nine  months  ended
   September 30, 1999 and 1998

   Notes to condensed consolidated financial statements -- September 30, 1999

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

                                  Page 2 of 20

<PAGE>

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

                                                  Condensed Consolidated Balance Sheets

                                                         September 30, 1999                 December 31, 1998
                                                         ----------------------------------------------------
ASSETS                                                      (Unaudited)                          (Note)
<S>                                                        <C>                                <C>
Current assets:
   Cash and cash equivalents                               $  1,561,810                       $  2,127,781
   Trade accounts receivable                                     79,323                            428,817
   Inventories                                                1,754,703                          1,751,353
   Prepaid expenses and other
     current assets                                             156,566                             72,610
                                                           -----------------------------------------------
   Total current assets                                       3,552,402                          4,380,561
Property and equipment, net                                     352,491                            550,773
Investment in joint venture                                      61,525                             53,534
Deferred product costs, less
   accumulated amortization of
   $4,481,504 and $4,623,451 at
   1999 and 1998, respectively                                1,132,924                          1,350,978
                                                           -----------------------------------------------
Deposits                                                        326,450                            305,587
                                                           $  5,425,792                       $  6,641,433
                                                           ===============================================


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                        $    356,371                       $    261,581
   Accrued liabilities                                          412,339                            405,281
                                                           -----------------------------------------------
   Total current liabilities                                    768,710                            666,862
Shareholders' equity:
   Common stock -- $.01 par value;
     30,000,000 shares authorized;  5,035,336 and
     4,960,336  shares  issued at 1999 and
     1998,  respectively:  4,985,136  and
     4,910,136 shares outstanding at 1999
     and 1998, respectively                                      50,353                             49,603
   Additional paid-in capital                                19,501,837                         19,429,931
   Accumulated deficit                                      (14,463,763)                       (13,073,618)
   Treasury stock, at cost; 50,200 shares                      (431,345)                          (431,345)
                                                           -----------------------------------------------
     Total shareholders' equity                               4,657,082                          5,974,571
                                                           -----------------------------------------------

                                                           $  5,425,792                        $ 6,641,433
                                                           ===============================================
</TABLE>

Note:  The balance  sheet at December 31, 1998 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.

                                  Page 3 of 20

<PAGE>

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

                          Condensed Consolidated Statements Of Operations
                                           (Unaudited)

                 Three Months and Nine Months Ended September 30, 1999 and 1998

                                        Three months ended                          Nine months ended
                                           September 30,                              September 30,
                                       1999             1998                     1999             1998
                                       ----             ----                     ----             ----
<S>                                   <C>            <C>                     <C>               <C>
Net sales                             $ 902,679      $  964,539              $ 2,111,853       $ 3,300,222
Cost of sales                           311,238         377,827                  697,637         1,384,599
                                      ---------      ----------               ----------        ----------
Gross profit                            591,441         586,712                1,414,216         1,915,623
                                      ---------      ----------               ----------        ----------
Expenses:
   Royalty expense                       41,591          53,112                  116,150           172,520
   Research and
     development                         25,042          80,647                  191,565           327,802
   Selling, general
     & administrative                   543,646         670,991                2,205,777         1,849,150
   Depreciation &
     amortization                       123,330         128,429                  364,468           385,010
                                      ---------      ----------               ----------        ----------
                                        733,609         933,179                2,877,960         2,734,482
                                      ---------      ----------               ----------        ----------
Operating loss                         (142,168)       (346,467)              (1,463,744)         (818,859)
Interest income                          16,958          38,350                   65,608           106,069
Joint venture equity pick-up              1,995           2,829                    7,991            36,308
                                      ---------      ----------               ----------        ----------
Loss before income taxes               (123,215)       (305,288)              (1,390,145)         (676,482)
Income tax expense                           --              --                       --                --
                                      ---------      ----------               ----------        ----------
Net loss                              $(123,215)     $ (305,288)             $(1,390,145)      $  (676,482)
                                      =========      ==========              ===========        ==========

Basic and diluted loss
   per share - Net loss
   per common share                   $    (.02)     $     (.06)             $      (.28)       $     (.14)
</TABLE>

            See notes to condensed consolidated financial statements.

                                  Page 4 of 20

<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

                  Nine Months Ended September 30, 1999 and 1998


                                                         Nine Months Ended
                                                           September 30,
                                                      1999               1998
                                                  ------------------------------
Operating activities:
   Net cash provided by (used in)
     operating activities                         $  (554,271)      $   515,205
                                                  -----------------------------

Investing activities:
   Capital expenditures, net                          (11,700)             (234)
   Distribution from joint venture                         --           275,000
                                                  ------------------------------

   Net cash provided by
     (used in) investing activities                   (11,700)          274,766
                                                  -----------------------------

Financing activities:
   Proceeds from issuance
     of common stock, net                                  --                --
                                                  -----------------------------
   Net cash used in
     financing activities                                  --                --
                                                  -----------------------------
Net increase (decrease) in cash
   and cash equivalents                              (565,971)          789,971

Cash and cash equivalents at
   beginning of period                              2,127,781         2,133,722
                                                  -----------------------------

Cash and cash equivalents at
   end of period                                  $ 1,561,810       $ 2,923,693
                                                  =============================

            See notes to condensed consolidated financial statements.

                                  Page 5 of 20

<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

                               September 30, 1999

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, 1999 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 1999. 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, 1998.

Note B -- Inventories

Inventories consist of the following:
                                                   September 30,    December 31,
                                                       1999            1998
                                                   -----------------------------
Finished goods                                      $1,078,265      $  909,928
Work in progress                                       160,275         199,374
Raw materials and components                           516,163         642,051
                                                    --------------------------
                                                    $1,754,703      $1,751,353
                                                    ==========================

Note C - Marketing And Distribution Agreements

The Company  entered  into a license  agreement  with QVC,  Inc.  ("QVC  License
Agreement")  in 1993,  whereby  QVC was granted  exclusive  rights to market and
distribute the Company's  proprietary consumer products using Hydron polymers in
the Western  Hemisphere.  In 1996,  the Company and QVC modified the QVC License
Agreement ("Amended License Agreement"),  whereby the Company reacquired certain
retail marketing rights to the Hydron product line. Such retail marketing rights
included prestige retail channels of distribution such as traditional department
and specialty  stores,  boutique  stores and beauty  salons,  as well as catalog
sales.  QVC was  entitled to receive a  commission  from the Company on any such
sales. In addition,  the Amended License Agreement increased the minimum product
purchase  requirements  QVC was required to meet on an annual basis  through the
two-year  term ended May 31, 1998,  to maintain its  exclusive  rights to market
Hydron  consumer  products in the Western  Hemisphere,  through all  channels of
distribution  except as noted above. QVC did not meet the annual minimum product
purchase requirements to maintain exclusivity for the year ended May 31, 1997.

                                  Page 6 of 20

<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                                   (Unaudited)

                               SEPTEMBER 30, 1999

Note C - Marketing And Distribution Agreements (continued)

On June 11, 1997, the Company and QVC renegotiated the Amended License Agreement
("Renegotiated  License  Agreement")  pursuant  to which the term of the Amended
License Agreement was extended for one year, to May 31, 1999.

Under the terms of the Renegotiated License Agreement,  QVC was required to meet
certain minimum product purchase requirements during each two-year period during
the  term  of  the  agreement,  as  well  as  annual  minimum  product  purchase
requirements, to maintain its exclusive rights. No obligation existed for QVC to
purchase the Company's product, except to maintain such exclusive rights, and no
assurances were given that QVC would meet the escalating minimum purchase levels
for subsequent years in order to maintain such exclusive  rights. If QVC had met
the stipulated  minimum product  purchase  requirements,  then the  Renegotiated
License  Agreement  would have  renewed  automatically.  If QVC did not meet the
annual  minimum  product  purchase  requirements,  the  Company  could  elect to
continue or terminate the Renegotiated  License  Agreement as of the end of each
contract year during the term.

Although QVC did not satisfy the minimum product  purchase  requirements for the
period ended May 31,  1998,  the Company  elected to continue  the  Renegotiated
License Agreement at that time.  Effective May 31, 1999, the Company  terminated
the Renegotiated  License  Agreement as a result of QVC's failure to satisfy the
annual minimum product purchase  requirements for the period ended May 31, 1999.
Under the terms of the Renegotiated  License  Agreement,  QVC had a period of 30
days,  commencing with the Company's notice to QVC of its decision to terminate,
to satisfy the minimum product purchase requirements.  As the deficiency was not
cured during that time, the Renegotiated  License  Agreement  terminated May 31,
1999.  Under  the  terms  of  the  Renegotiated  License  Agreement,   following
termination  thereof,  the  Company  could  not  market or sell  certain  Hydron
products  through direct response  television in the Western  Hemisphere,  for a
period of three months ending September 1, 1999. In addition,  QVC has the right
to continue to sell certain of the Company's  products on a non-exclusive  basis
to existing  customers who had previously  purchased and wish to re-order Hydron
products, for a period of two years commencing June 1, 1999.

Effective   September  1,  1999,  the  Company  entered  into  a  marketing  and
distribution  agreement (the "Home Shopping  Agreement") with Home Shopping Club
LP ("Home Shopping"),  that grants Home Shopping 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
grants Home Shopping a non-exclusive  license to market Hydron products  through
all other  methods of  distribution  in  certain  countries  outside  the United
States.

                                  Page 7 of 20

<PAGE>

Note C - Marketing And Distribution Agreements (continued)

Under the terms of the Home Shopping Agreement,  Home Shopping will make minimum
product  purchases (i) during the period ending 12 months  following the date on
which the  products  first aired on Home  Shopping's  television  programs  (the
"Initial Term"),  and (ii) during the second 12 months following the date of the
first airing,  should Home Shopping exceed a certain  threshold amount in retail
sales of Hydron  products to consumers  during the Initial Term. The term of the
Home Shopping Agreement may be automatically  renewed after the Initial Term for
an indefinite number of successive one-year periods,  subject to Home Shopping's
achieving certain  escalating  threshold levels in product  purchases.  However,
beginning in the third contract  year,  Home Shopping will no longer be required
to make minimum product purchases, except to maintain exclusivity.

The Company  launched its  products on Home  Shopping's  television  programs on
September  16,  1999.  Hydron  products  have since been  featured  in hour long
"Hydron Skin Care  Solutions"  programs which were televised by Home Shopping on
October 24 and 25, 1999,  and are expected to continue to air  regularly on Home
Shopping's  television programs.  In addition to selling Hydron products on-air,
Home Shopping is expected to provide brand development,  and marketing promotion
and  support  for  the  products,  including  direct  mail,  sampling,  outbound
telemarketing,  package inserts,  advertising and publicity programs,  the costs
and expenses of which are to be shared equally by Home Shopping and the Company.

Although  management  believes  that there are other  avenues  for  selling  the
Company's products, including the Hydron catalog, the loss of Home Shopping as a
customer would have a material adverse effect on the Company's business.

The Company has also entered into a Spokesperson Services Agreement with Greyson
International,  Inc.  ("Greyson")  and Harvey Tauman  ("Tauman"),  the Company's
former president and an employee of Greyson, to have Tauman market the Company's
products in connection  with Home Shopping and to serve as the Company's  on-air
spokesperson.   This  agreement  shall  remain  effective,  subject  to  certain
conditions,  until September 16, 2001 (the second  anniversary of Tauman's first
appearance  promoting Hydron products on Home Shopping's  television  programs).
For  providing  the services of Tauman,  Greyson  shall receive a fee based on a
percentage  of the  Company's  monthly  recorded  sales of its  products to Home
Shopping.

                                  Page 8 of 20

<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                                   (Unaudited)

                               September 30, 1999

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,
                                                                1999          1998          1999           1998
                                                             ------------------------------------------------------
<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)                                               $ (123,215)   $ (305,288)   $(1,390,145)   $ (676,482)
                                                             =====================================================

Denominator:
  Denominator for basic earnings per share
    (weighted-average shares)                                 4,945,576     4,910,136      5,015,299     4,910,136
  Effect of dilutive securities: Stock options
    and warrants                                                     --            --             --            --

                                                             -----------------------------------------------------
  Denominator for dilutive earnings per share
    (adjusted weighted-average)                               4,945,576     4,910,136      5,015,299     4,910,136
                                                             =====================================================

Basic earnings per share                                     $     (.02)    $    (.06)   $      (.28)   $     (.14)
                                                             =====================================================

Diluted earnings per share                                   $     (.02)    $    (.06)   $      (.28)   $     (.14)
                                                             =====================================================
</TABLE>

Options and warrants to purchase 256,500 shares of common stock were outstanding
at September  30,  1999,  but were not  included in the  computation  of diluted
earnings per share because the effect would be  antidilutive to the net loss per
share for the period.

                                  Page 9 of 20

<PAGE>

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

Business
--------

Hydron Technologies,  Inc. (the "Company") develops and markets a broad range of
personal care  products,  including  skin care,  hair care,  bath and body,  and
topical  over-the-counter  pharmaceutical products, based on its proprietary and
patented  Hydron polymer  technology.  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  and  cosmetic  products.  The  Company  has  concentrated  its  sales  and
development  activities  primarily on the  application  of these  biocompatible,
hydrophilic  polymers  in  various  personal  care  and  cosmetic  products  for
consumers  and,  to a lesser  extent,  oral  health  care  products  for  dental
professionals.

The  Company  entered  into a Marketing  and  Distribution  Agreement  with Home
Shopping  Club LP ("Home  Shopping")  effective  September  1,  1999 (the  "Home
Shopping  Agreement").  The Home Shopping  Agreement  grants  certain  exclusive
worldwide rights to Home Shopping to purchase licensed products from the Company
for sale  through  various  forms of  electronic  retailing.  The  Company  also
continues to sell certain of its products to QVC, Inc. ("QVC"),  for QVC to sell
on a  non-exclusive  basis to existing  customers  who wish to  re-order  Hydron
products,  under the terms of the Company's  former license  agreement with QVC,
which  the  Company  terminated  effective  May 31,  1999 (the  "Former  License
Agreement"). QVC has the right to sell certain Hydron products to such customers
until June 1, 2001.

In addition,  the Company  entered into a Spokesperson  Services  Agreement with
Greyson  International,  Inc.  ("Greyson")  and Harvey  Tauman  ("Tauman"),  the
Company's former president and an employee of Greyson, to have Tauman market the
Company's  products  in  connection  with  Home  Shopping  and to  serve  as the
Company's  on-air  spokesperson.  The  Company has also  entered  into a License
Agreement with National Patent  Development Corp., which provides for reciprocal
royalty payments based on the sale of certain of each party's products.

The Company is developing  other personal  care/cosmetic  products for consumers
using Hydron  polymers and is using its patented  technology  as a drug delivery
system in at least one of its  proprietary  products.  The  Company  intends  to
continue to explore the efficacy of using its  technology  for such purposes and
would, when appropriate,  either seek licensing arrangements with third parties,
or develop and market proprietary  products through its own efforts.  Management
believes that, because of their unique properties,  products that utilize Hydron
polymers  have the potential  for wide  acceptance in consumer and  professional
health care markets.

Most of the  Company's  net sales for the three  months  and nine  months  ended
September  30,  1999 are  derived  from  sales to QVC under the  Former  License
Agreement, and sales to Home Shopping under the Home Shopping Agreement.

                                  Page 10 of 20

<PAGE>

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

Net  sales  for the  three  months  ended  September  30,  1999  were  $902,679,
representing  a decrease of $61,860,  or 6%, from net sales of $964,539  for the
three  months  ended  September  30,  1998.  Net sales for the nine months ended
September 30, 1999 were  $2,111,853,  representing a decrease of $1,188,369,  or
36%, from net sales of $3,300,222 for the nine months ended September 30, 1998.

Non-catalog net sales,  primarily to Home Shopping and QVC, for the three months
ended September 30, 1999 were $616,248,  representing a decrease of $180,641, or
23%, from non-catalog net sales of $796,889 for the three months ended September
30, 1998.  Non-catalog  net sales for the nine months ended  September  30, 1999
were $1,447,323, representing a decrease of $1,272,795, or 47%, from non-catalog
net sales of  $2,720,118  for the nine months  ended  September  30,  1998.  The
decrease in  non-catalog  net sales resulted  primarily from decreased  sales to
QVC,  which were  partially  offset by an initial sale to Home Shopping prior to
the launch of the Company's products on Home Shopping's  television  programs on
September 16, 1999.The decrease in net sales to QVC resulted  primarily from the
termination  of the Former  License  Agreement  effective  May 31,  1999.  As of
September 1, 1999, Hydron products ceased to be sold on-air by QVC in accordance
with the terms of the Former License Agreement.

Catalog net sales for the three months ended  September 30, 1999 were  $286,431,
representing an increase of $118,781, or 71%, from catalog net sales of $167,650
for the three months ended  September  30, 1998.  Catalog net sales for the nine
months  ended  September  30, 1999 were  $664,530,  representing  an increase of
$84,426,  or 15%,  from  catalog net sales of $580,104 for the nine months ended
September 30, 1998.  The increase in catalog sales for the three and nine months
ended September 30, 1999 was the result of promotional activities.

Approximately  68% and 83% of the  Company's  sales for the three  months  ended
September  30,  1999 and  1998,  respectively,  were to Home  Shopping  and QVC.
Approximately  69% and 82% of the  Company's  sales during the nine months ended
September  30,  1999 and  1998,  respectively,  were to Home  Shopping  and QVC.
Management  anticipates that sales to QVC as a percentage of the Company's total
sales  will  decline  as a  result  of the  termination  of the  Former  License
Agreement, although the Company may continue to sell certain products to QVC for
re-sale to prior  purchasers  until June 1, 2001.  Management  also  anticipates
that,  under the terms of the Home Shopping  Agreement,  which became  effective
September 1, 1999,  sales to Home Shopping will become a substantial  percentage
of  the  Company's  total  sales.   Absent  the  consummation  of  marketing  or
distribution  arrangements  with third  parties  other than Home  Shopping,  the
Company's  dependence  upon Home  Shopping  as a  substantial  customer  will be
significant.  Any  disruption in the Company's  relationship  with Home Shopping
would have a material  adverse effect on the business,  financial  condition and
results of operations of the Company.

The Company's  overall gross profit margin for the three months ended  September
30, 1999 was 66%, as compared to 61% for the three  months ended  September  30,
1998. The Company's overall gross profit

                                  Page 11 of 20

<PAGE>

Results of Operations (continued)
---------------------------------

margin for the nine months ended  September 30, 1999 was 67%, as compared to 58%
for the nine  months  ended  September  30,  1998.  The gross  profit  margin on
non-catalog  sales for the three  months  ended  September  30, 1999 was 57%, as
compared to 56% for the three months ended  September 30, 1998. The gross profit
margin on  non-catalog  sales for the nine months ended  September  30, 1999 was
60%, as  compared  to 54% for the nine months  ended  September  30,  1998.  The
increase  in  non-catalog  gross  profit  margins  was the  result of the mix of
products sold to QVC and Home Shopping. The gross profit margin on catalog sales
for the three  months ended  September  30, 1999 was 83%, as compared to 84% for
the three months ended  September  30, 1998.  The gross profit margin on catalog
sales for the nine months ended  September  30, 1999 was 82%, as compared to 78%
for the nine months  ended  September  30, 1998.  The decrease in catalog  gross
profit  margin for the three months ended  September  30, 1999 was the result of
promotional  pricing on some of the products  offered  through the catalog.  The
increase in catalog gross profit margin for the nine months ended  September 30,
1999 resulted  primarily from a one-time vitamin sale of approximately  $73,000,
which had a 44% gross  profit  margin,  during the three  months ended March 31,
1998.

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, 1999 were  $25,402,  representing  a decrease of $55,605,  or 69%,
from R&D expenses of $80,647 for the three months ended September 30, 1998. Such
expenses  for  the  nine  months  ended   September  30,  1999  were   $191,565,
representing  a decrease of $136,237,  or 42%, from R&D expenses of $327,802 for
the nine months ended  September 30, 1998.  These decreases  resulted  primarily
from clinical  studies  performed with respect to various products with costs of
approximately $100,000 incurred during the nine month period ended September 30,
1998.  No such  clinical  studies  were  performed  during the nine months ended
September 30, 1999. The amount of R&D expenses per year varies  depending on the
nature of the Company's 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, 1999 were $543,646,  representing a decrease of $127,345,  or 19%,
from SG&A  expenses of $670,991 for the three months ended  September  30, 1998.
Such  expenses for the nine months  ended  September  30, 1999 were  $2,205,777,
representing  an increase of $356,627,  or 19%, from SG&A expenses of $1,849,150
for the nine months ended September 30, 1998.

Non-catalog  related SG&A expenses for the three months ended September 30, 1999
were $371,961,  representing a decrease of $171,202,  or 32%, from SG&A expenses
of $542,981  for the three months ended  September  30,1998.Non-catalog  related
SG&A  expenses for the nine months  ended  September  30, 1999 were  $1,846,618,
representing  an increase of $337,969,  or 22%, from SG&A expenses of $1,508,649
for the nine months  ended  September  30,  1998.  The  decrease in  non-catalog
related  SG&A  expenses  for the  three  months  ended  September  30,  1999 was
primarily  the  result of  reduced  payroll  and legal  expenses  and also lower
selling  expenses as a result of the limited air time on QVC and Home  Shopping.
The  increase in  non-catalog  related  SG&A  expenses for the nine months ended
September 30,

                                  Page 12 of 20

<PAGE>

Results of Operations (continued)
---------------------------------

1999 is  attributable  primarily to the  litigation  with the  Company's  former
president,  which was  settled on June 2,  1999,  and with the  voluntary  early
termination of an executive  officer's  employment contract on May 31, 1999. The
settlement of the litigation  resulted in the payment to the former president of
approximately  $300,000  in cash  and  the  issuance  of  75,000  shares  of the
Company's  common stock valued at approximately  $73,000.  The termination of an
executive officer's employment contract,  that would have otherwise provided for
continued  employment  through  April 30, 2003,  resulted in payroll and related
costs of approximately $109,000.

Catalog related SG&A expenses for the three months ended September 30, 1999 were
$171,685,  representing  an increase of $43,675,  or 34%,  from SG&A expenses of
$128,010 for the three months ended  September  30, 1998.  Catalog  related SG&A
expenses  for  the  nine  months  ended   September  30,  1999  were   $359,159,
representing  an increase of $18,658,  or 5%, from SG&A expenses of $340,501 for
the nine months ended  September 30, 1998.  These  increases in catalog  related
SG&A  expenses  for the three  and nine  months  ended  September  30,  1999 are
attributable to an overall increase in promotional costs.

The Company  anticipates that SG&A expenses will increase  substantially  during
the quarter ending  December 31, 1999 as a result of costs  associated  with the
continued  reconfiguration  of the Company's  existing product inventory to meet
the   requirements  of  its  new  exclusive   electronic   retailer,   increased
co-operative  advertising,  and the  production  of new product  components  and
additional finished goods inventory.

Interest and investment income for the three months ended September 30, 1999 was
$16,958,  representing  a  decrease  of  $21,392,  or  56%,  from  interest  and
investment  income of $38,350 for the three  months  ended  September  30, 1998.
Interest and investment  income for the nine months ended September 30, 1999 was
$65,608,  representing  a  decrease  of  $40,461,  or  38%,  from  interest  and
investment  income of $106,069  for the nine months  ended  September  30, 1998.
These  decreases  were due  primarily to lower cash balances in the 1999 periods
compared to the 1998 periods.  The Company  maintains a conservative  investment
strategy, deriving investment income primarily from U.S. Treasury securities.

The net loss for the three  months ended  September  30, 1999 was  $123,215,  as
compared to a net loss of $305,288  for the three  months  ended  September  30,
1998. The net loss for the nine months ended  September 30, 1999 was $1,390,145,
as compared to a net loss of $676,482  for the nine months ended  September  30,
1998. The net losses resulted  primarily from the factors  discussed  above. The
non-catalog net loss for the three months ended September 30, 1999 was $178,404,
as compared to a  non-catalog  net loss of $304,663  for the three  months ended
September 30, 1998. The non-catalog net loss for the nine months ended September
30, 1999 was  $1,533,403,  as compared to a non-catalog net loss of $752,985 for
the nine months ended September 30, 1998. The catalog's net income for the three
months ended  September  30, 1999 was $55,189,  as compared to the catalog's net
loss of $625 for the three months ended  September  30, 1998.  The catalog's net
income for the nine months ended September 30, 1999 was $143,258, as compared to
the  catalog's  net income of $76,503 for the nine months  ended  September  30,
1998.

                                  Page 13 of 20

<PAGE>

Liquidity and Financial Resources
---------------------------------

Working  capital at September  30, 1999 and December 31, 1998 was  approximately
$2.8 million and $3.7 million, respectively, including cash and cash equivalents
of  approximately  $1.6 million and $2.1  million,  respectively.  The Company's
decrease in cash and cash equivalents of  approximately  $566,000 was the result
primarily  of  costs  associated  with  the  litigation   settlement  litigation
settlement and employment contract termination,  which included cash payments of
approximately $300,000 and $88,000, respectively.

There were minimal  investing  activities during the nine months ended September
30,  1999,  consisting  primarily  of the  purchase of property  and  equipment.
Investing  activities  generated  approximately  $276,000 during the nine months
ended  September 30, 1998,  consisting  primarily of a distribution  of $275,000
received from New Hydromercial Partners, the Company's joint venture with QVC.
This joint venture is no longer active and is expected to be dissolved.

There were no financing  activities  during the nine months ended  September 30,
1999 or 1998.

Based on 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. Further,  in view of the first
year's guaranteed  revenues under the Home Shopping Agreement and the thirty day
payment terms in connection  with sales to QVC,  management  does not anticipate
any difficulty in financing foreseeable inventory requirements.

Under the terms of the Home  Shopping  Agreement,  Home  Shopping is expected to
make minimum  product  purchases  from the Company  during the period  ending 12
months from September 16, 1999, the date on which Hydron products first aired on
Home Shopping's  television  programs.  If Home Shopping  exceeds certain retail
sales  of  Hydron  products  during  that  period,   the  agreement  will  renew
automatically on the same terms for a second one-year  period.  Beginning in the
third year,  Home  Shopping  will no longer be required to make minimum  product
purchases,  except to maintain  exclusivity.  The agreement may be automatically
extended for an indefinite  number of successive  one-year  periods,  subject to
Home Shopping's achieving escalating minimum product purchase levels.

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 Home Shopping
and QVC,  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.

                                  Page 14 of 20

<PAGE>

Liquidity and Financial Resources (continued)
---------------------------------------------

The Year 2000 Issues

The Company is dependent upon computer  technology to effectively  carry out its
day-to-day  operations.  In addition,  the Company is dependent on suppliers and
customers who also use computer technology in the conduct of their business. The
terms "Year 2000 issues" or "Year 2000  problems," or words of a similar nature,
refer to the potential for failure of computer  applications  as a result of the
failure of programs to properly recognize and handle dates beyond the year 1999.
In the case of the Company,  such  computer  applications  may include  customer
order processing, inventory management, shipment of products, internal financial
systems and other information systems, among others.

   - Readiness

The Company's assessment of the possible consequences of Year 2000 issues on its
business, results of operations, or financial conditions is not complete, but is
continuing  in  accordance  with a Year 2000  compliance  plan (the  "Year  2000
Plan").  The Year 2000 Plan includes (1)  upgrading  the  Company's  information
technology software and embedded technology  applications in its systems,  where
applicable, to become Year 2000 compliant, (2) assessing the Year 2000 readiness
of suppliers and customers,  and (3) developing contingency plans, if practical,
for crucial system and processes.  Implementation of the Year 2000 Plan has been
undertaken with respect to various operating and information  systems in varying
degrees to date.  The Year 2000 Plan is  expected to be fully  implemented  with
respect to crucial information systems in 1999.

Progress  to date  includes  the  purchase  of upgraded  hardware  and  software
packages  and  reprogramming  of  existing  systems.  All  internal  systems are
expected to be Year 2000 compliant in 1999.  Because the Company is dependent on
its suppliers and customers to successfully operate its business,  the Year 2000
Plan includes an assessment  process with respect to those vendors and customers
deemed most critical to the operations and business of the Company. To date, the
Company has contacted  certain  vendors and  anticipates  completing  its vendor
assessment  process by the end of 1999.  The initial steps of an analysis of the
Company's  significant  customer to determine the  potential  effect of the Year
2000 issues on this  customer has begun and is expected to be completed in 1999.
The Year 2000 Plan requires continued assessment throughout 1999 in these areas.

   - Costs

The costs of the Year 2000 Plan include the purchase price of computer  hardware
and software  packages,  fees for contract  programmers and the cost of internal
information  technology  resources.  The costs of achieving Year 2000 compliance
have not been material to date and are not expected to be material.

  - Risks

The Company  expects no material  adverse  effect on its results of  operations,
liquidity or financial condition

                                  Page 15 of 20

<PAGE>

as a result of problems  encountered in its own business due to Year 2000 issues
or as a result of the impact.

Liquidity and Financial Resources (continued)
---------------------------------------------

of Year 2000  problems on its vendors or  customers.  However,  the risks to the
Company associated with Year 2000 issues could be significant. While the Company
is undertaking its own evaluation and testing of its information  technology and
non-information  technology  systems,  it is  dependent  to some  extent  on the
assurances  and guidance  provided by suppliers of  technology  and  programming
services as to Year 2000 compliance readiness.

Similarly,  the  Company's  Year 2000 Plan  calls for  ongoing  analysis  of the
possible  effects  of Year 2000  problems  on its  suppliers  of  materials  and
non-information  technology  goods and  services  as well as its  customers  and
demands for its  products.  The Company  has  limited  ability to  independently
verify the possible  effects of Year 2000 issues on its customers and suppliers.
Therefore,  the Company's assumptions  concerning the effect of Year 2000 issues
on its results of operations,  liquidity,  and financial condition relies on its
ability to analyze the business and  operations of each of its critical  vendors
or  customers.  This process,  by the nature of the problem,  is limited to such
persons' public statements,  their responses to the Company's inquiries, and the
information   available  to  the  Company  from  third  parties  concerning  the
industries or particular vendors or customers involved.

Risk also exists that despite the Company's best efforts,  critical  systems may
malfunction due to year 2000 problems and disrupt its operations. The Company is
unable to determine at this time the nature or length of time for such  possible
disruption  and therefore the potential  materiality  thereof to its business or
profitability.

Interruptions  of  communication  services  or  power  supply  due to Year  2000
problems can cause affected  locations to cease or curtail production or receipt
and  shipment  of  materials  and  products.  The  Company is  dependent  on the
suppliers of power and communication services that no such disruptions occur.

   - Contingency Plans

As part of its Year 2000  Plan,  the  Company  will  continue  to  identify  and
evaluate risks and possible alternatives should various contingencies arise. The
Company has prioritized  remediation of its most crucial information systems and
believes  that  they  will be Year  2000  compliant  by the end of 1999.  Should
unforeseen circumstances result in substantial delay that may lead to disruption
of business,  the Company will develop  contingency plans where possible and not
cost  prohibitive.  To some  extent  the  Company  may  not be  able to  develop
contingency  plans, such as in the case of communication  services or the supply
of power.

                                  Page 16 of 20

<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.

                                  Page 17 of 20

<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, August 10, 1999)

C - Current report on Form 8-K (Date of Report, September 1, 1999)

                                  Page 18 of 20

<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/ Richard Banakus
                                                       -----------------------
                                                       Richard Banakus
                                                       Interim President


Dated: November 15, 1999

                                  Page 19 of 20