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: June 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 August 23, 1999: 4,985,136

                                  Page 1 of 18


<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                                      Index



Part I. Financial Information

Item 1. Financial Statements (Unaudited)

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

  Condensed consolidated  statements of operations -- Three months ended June
  30, 1999 and 1998; six months ended June 30, 1999 and 1998

  Condensed  consolidated  statements  of cash flows -- Six months ended June
  30, 1999 and 1998

  Notes to condensed consolidated financial statements -- June 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 18


<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                      Condensed Consolidated Balance Sheets

                                                    June 30, 1999    December 31, 1998
                                                    ----------------------------------
ASSETS                                               (Unaudited)            (Note)
<S>                                                  <C>                <C>
Current assets:
   Cash and cash equivalents                         $ 1,479,022        $  2,127,781
   Trade accounts receivable                             169,122             428,817
   Inventories                                         1,666,055           1,751,353
   Prepaid expenses and other
     current assets                                      158,684              72,610
                                                    ----------------------------------
   Total current assets                                3,472,883           4,380,561
Property and equipment, net                              391,437             550,773
Investment in joint venture                               59,530              53,534
Deferred product costs, less
   accumulated amortization of
   $4,768,820 and $4,623,451 at
   1999 and 1998, respectively                         1,205,609           1,350,978
Deposits                                                 222,208             305,587
                                                    ----------------------------------
                                                     $ 5,351,667        $  6,641,433
                                                    ==================================


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                  $   202,781        $    261,581
   Accrued liabilities                                   368,589             405,281
                                                    ----------------------------------
   Total current liabilities                             571,370             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                               (14,340,548)        (13,073,618)
   Treasury stock, at cost; 50,200 shares               (431,345)           (431,345)
                                                    ----------------------------------
     Total shareholders' equity                        4,780,297           5,974,571
                                                    ----------------------------------
                                                     $ 5,351,667        $  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 18


<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                 Condensed Consolidated Statements Of Operations
                                   (Unaudited)

            Three Months and Six Months Ended June 30, 1999 and 1998

                                        Three months ended                    Six months ended
                                             June 30,                             June 30,
                                         1999           1998               1999             1998
                                         ----           ----               ----             ----
<S>                                  <C>             <C>               <C>               <C>
Net sales                            $  623,092      $1,024,465        $ 1,209,174       $ 2,335,683
Cost of sales                           199,849         463,366            386,399         1,006,772
                                     ----------      ----------        -----------       -----------
Gross profit                            423,243         561,099            822,775         1,328,911
                                     ----------      ----------        -----------       -----------
Expenses:
   Royalty expense                       38,821          63,514             74,559           119,408
   Research and
     development                         62,072         128,826            166,523           247,155
   Selling, general
     & administrative                 1,044,040         572,532          1,662,131         1,178,159
   Depreciation &
     amortization                       118,970         128,224            241,138           256,581
                                     ----------      ----------        -----------       -----------
                                      1,263,903         893,096          2,144,351         1,801,303
                                     ----------      ----------         ----------       -----------
Operating loss                         (840,660)       (331,997)        (1,321,576)         (472,392)
Interest income                          24,809          36,755             48,650            67,719
Joint venture equity pick-up              3,127          13,447              5,996            33,479
                                     ----------      ----------        -----------       -----------
Loss before income taxes               (812,724)       (281,795)        (1,266,930)         (371,194)
Income tax expense                           --              --                 --                --
                                     ----------      ----------        -----------       -----------
Net loss                             $ (812,724)     $ (281,795)       $(1,266,930)      $  (371,194)
                                     ==========      ==========        ===========       ===========

Basic and diluted loss
   per share - Net loss
   per common share                  $     (.16)     $     (.06)       $      (.26)      $      (.08)
</TABLE>

            See notes to condensed consolidated financial statements.

                                  Page 4 of 18


<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

                     Six Months Ended June 30, 1999 and 1998


                                                   1999            1998
                                               ----------------------------


Operating activities:
   Net cash provided by (used in)
     operating activities                      $  (648,759)     $   224,301
                                               ----------------------------


Investing activities:
   Capital expenditures, net                            --            1,416
   Distribution from joint venture                      --          275,000
                                               ----------------------------

   Net cash provided by
     investing activities                               --          276,416
                                               ----------------------------


Financing activities:
   Proceeds from issuance
     of common stock, net                               --               --
                                               ----------------------------

   Net cash used in
     financing activities                               --               --
                                               ----------------------------


Net increase (decrease) in cash
   and cash equivalents                           (648,759)         500,717

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


Cash and cash equivalents at
   end of period                               $ 1,479,022      $ 2,634,439
                                               ============================




            See notes to condensed consolidated financial statements.

                                  Page 5 of 18


<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

                                  June 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 six  month  periods  ended  June  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:
                                            June 30, 1999     December 31, 1998
                                            -----------------------------------
Finished goods                               $   910,566          $ 909,928
Work in progress                                 161,774            199,374
Raw materials and components                     593,715            642,051
                                            -----------------------------------
                                             $ 1,666,055        $ 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  over a
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 18


<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                                   (Unaudited)

                                  June 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  could be 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  purcahse  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 cannot 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 can continue to sell
certain of the Company's products on a non-exclusive basis, to customers who had
previously  purchased and wish to reorder Hydron  products,  for a period of two
years commencing June 1, 1999.

The Company is currently  negotiating the terms of a marketing and  distribution
agreement  with Home  Shopping Club LP ("Home  Shopping"),  which is expected to
become effective September 1, 1999 (the "Home Shopping Agreement").  Pursuant to
the Home Shopping  Agreement,  the Company will grant Home Shopping an exclusive
worldwide license to market and distribute certain of the Company's  proprietary
consumer  products  through  various  forms  of  electronic  retailing,   and  a
non-exclusive  license to market  Hydron  products  through all other methods of
distribution in certain countries outside the United States. It

                                  Page 7 of 18


<PAGE>

Note C -- Marketing And Distribution Agreements (continued)

is currently  anticipated  that the Home  Shopping  Agreement  will require Home
Shopping to make minimum product purchases i) during the period ending 12 months
following the date on which the products first air 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  expects to launch its  products  on Home  Shopping's
television programs in September 1999.

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 failure of the Company to
enter  into the Home  Shopping  Agreement,  or 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  two  years  after  the  date 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 18


<PAGE>

                   HYDRON TECHNOLOGIES, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                                   (Unaudited)

                                  June 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             Six Months Ended
                                                                       June 30,                      June 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)                                              $ (812,724)  $  (281,795)    $(1,266,930)   $ (371,194)
                                                              ======================================================
Denominator:
  Denominator for basic earnings per share
    (weighted-average shares)                                  4,940,631     4,910,136       4,925,467     4,910,136
  Effect of dilutive securities: Stock options
    and warrants                                                     --             --              --            --

                                                              ------------------------------------------------------

  Denominator for dilutive earnings per share
    (adjusted weighted-average)                                4,940,631     4,910,136       4,925,467     4,910,136
                                                              ======================================================
Basic earnings per share                                      $     (.16)  $      (.06)    $      (.26)   $     (.08)
                                                              ======================================================
Diluted earnings per share                                    $     (.16)  $      (.06)    $      (.26)   $     (.08)
                                                              ======================================================
</TABLE>

Options and warrants to purchase 269,700 shares of common stock were outstanding
at June 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 18


<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/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 health care products for dental professionals.

The Company is negotiating the terms of a Marketing and  Distribution  Agreement
with  Home  Shopping  Club LP ("Home  Shopping"),  which is  expected  to become
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
had previously  purchased and 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 has 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 six months ended June
30, 1999 are derived from sales to QVC, under the Former License Agreement.

                                  Page 10 of 18


<PAGE>

Results of Operations

Net sales for the three months ended June 30, 1999 were $623,092,  a decrease of
$401,373,  or 39%, from net sales of $1,024,465  for the three months ended June
30, 1998.  Net sales for the six months ended June 30, 1999 were  $1,209,174,  a
decrease of $1,126,509,  or 48%, from net sales of $2,335,683 for the six months
ended June 30, 1998.

Non-catalog  net sales,  primarily  to QVC and related  entities,  for the three
months ended June 30, 1999 were $417,830,  a decrease of $444,813,  or 52%, from
non-catalog  net sales of $862,643  for the three  months  ended June 30,  1998.
Non-catalog  net sales for the six months ended June 30, 1999 were  $831,075,  a
decrease of $1,092,154, or 57%, from non-catalog net sales of $1,923,229 for the
six months  ended June 30,  1998.  The decrease in  non-catalog  sales  resulted
primarily from decreased sales to QVC, which in turn,  resulted primarily from a
reduction  in QVC's  retail  sales due to the  amount  and  quality  of  airtime
provided by QVC, as well as the number of new product introductions,  the amount
of competitive  products  offered by QVC, and the  effectiveness of the host and
spokesperson.  As of September 1, 1999,  Hydron  products will no longer be sold
on-air by QVC in accordance with the terms of the Former License Agreement.

Catalog net sales for the three  months  ended June 30, 1999 were  $205,262,  an
increase of $43,440,  or 27%,  from  catalog net sales of $161,822 for the three
months ended June 30, 1998.  Catalog net sales for the six months ended June 30,
1999 were  $378,099,  a decrease  of $34,355,  or 8%, from  catalog net sales of
$412,454 for the six months ended June 30, 1998.  The increase in catalog  sales
for the three  months  ended  June 30,  1999 was the  result of more  successful
promotional  activities.  The decrease in catalog sales for the six months ended
June 30, 1999 was the result of a one-time vitamin sale of approximately $73,000
during the three months ended March 31, 1998.

Approximately 67% and 84% of the Company's sales for the three months ended June
30,  1999  and  1998,  respectively,  were  to QVC  and  its  related  entities.
Approximately  68% and 82% of the  Company's  sales  during the six months ended
June 30,  1999 and 1998,  respectively,  were to QVC and its  related  entities.
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 select  customers  until June 1, 2001.  Management  also  anticipates
that,  under the terms of the Home  Shopping  Agreement,  which is  expected  to
become  effective  September  1,  1999,  sales to Home  Shopping  will  become a
substantial  percentage of the Company's total sales. Assuming the Home Shopping
Agreement   becomes   effective,   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.  The  failure  of the  Company  to enter  into  the  Home  Shopping
Agreement,  or 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 June 30,
1999 was 68%, as compared to 55% for the three months  ended June 30, 1998.  The
Company's overall gross profit margin for the six months ended June 30, 1999 was
68%, as compared to 57% for the six months ended June 30,

                                  Page 11 of 18


<PAGE>

Results of Operations (continued)

1998.  The gross profit margin on  non-catalog  sales for the three months ended
June 30, 1999 was 61%, as  compared to 49% for the three  months  ended June 30,
1998. The gross profit margin on non-catalog sales for the six months ended June
30, 1999 was 62%, as compared to 53% for the six months ended June 30, 1998. The
increase  in  non-catalog  gross  profit  margins  was the  result of the mix of
products  sold to QVC,  including the sale of  approximately  $174,000 of sample
size  products  to  QVC  for  promotional   activities  at  a  gross  margin  of
approximately  15% during the three months ended June 30, 1998. The gross profit
margin on catalog  sales for the three  months  ended June 30,  1999 was 81%, as
compared  to 84% for the three  months  ended June 30,  1998.  The gross  profit
margin on catalog  sales for the six  months  ended  June 30,  1999 was 82%,  as
compared to 76% for the six months ended June 30, 1998.  The decrease in catalog
gross  profit  margin for the three months ended June 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 six months ended June 30, 1999
resulted primarily from the one-time vitamin sale of approximately $73,000, at 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
June 30, 1999 were $62,072, a decrease of $66,754,  or 52%, from R&D expenses of
$128,826 for the three months  ended June 30,  1998.  Such  expenses for the six
months ended June 30, 1999 were  $166,523,  a decrease of $80,632,  or 33%, from
R&D expenses of $247,155 for the six months ended June 30, 1998. These decreases
resulted  primarily  from  clinical  studies  performed  with respect to various
products  with costs of  approximately  $100,000  incurred  during the six month
period ended June 30, 1998. No such clinical  studies were performed  during the
six months  ended June 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
June 30,  1999 were  $1,044,040,  an  increase of  $471,508,  or 82%,  from SG&A
expenses of $572,532 for the three months ended June 30, 1998. Such expenses for
the six months ended June 30, 1999 were $1,662,131,  an increase of $483,972, or
41%, from SG&A expenses of $1,178,159 for the six months ended June 30, 1998.

Non-catalog  related SG&A expenses for the three months ended June 30, 1999 were
$941,853,  an increase of $466,652,  or 98%,  from SG&A expenses of $475,201 for
the three months ended June 30, 1998.  Non-catalog related SG&A expenses for the
six months ended June 30, 1999 were $1,474,657, an increase of $508,989, or 53%,
from SG&A  expenses of $965,668 for the six months  ended June 30,  1998.  These
increases are 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 settlement  payments of  approximately
$373,000, including the issuance of 75,000 shares of the Company's common stock

                                  Page 12 of 18


<PAGE>

Results of Operations (continued)

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 June 30, 1999 were
$102,187,  an increase of $4,856,  or 5%, from SG&A  expenses of $97,331 for the
three  months  ended June 30, 1998.  Catalog  related SG&A  expenses for the six
months ended June 30, 1999 were  $187,474,  a decrease of $25,017,  or 12%, from
SG&A  expenses of $212,491 for the six months ended June 30, 1998.  The increase
in catalog  related  SG&A  expenses for the three months ended June 30, 1999 was
attributable  to an overall  increase in catalog sales.  The decrease in catalog
related SG&A  expenses  for the six months ended June 30, 1999 was  attributable
primarily to a decrease in promotional and payroll costs.

Interest  and  investment  income for the three  months  ended June 30, 1999 was
$24,809,  a decrease of $11,946,  or 33%, from interest and investment income of
$36,755 for the three months ended June 30, 1998. Interest and investment income
for the six months  ended June 30, 1999 was $48,650,  a decrease of $19,069,  or
28%,  from  interest and  investment  income of $67,719 for the six months ended
June 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 June 30, 1999 was $812,724,  as compared
to a net loss of $281,795 for the three months ended June 30, 1998. The net loss
for the six months ended June 30, 1999 was $1,266,930, as compared to a net loss
of $371,194  for the six months  ended June 30,  1998.  The  increase in the net
losses resulted  primarily from the factors discussed above. The non-catalog net
loss for the three  months  ended June 30, 1999 was  $859,546,  as compared to a
non-catalog  net loss of $308,932 for the three months ended June 30, 1998.  The
non-catalog net loss for the six months ended June 30, 1999 was  $1,354,999,  as
compared to a non-catalog net loss of $448,323 for the six months ended June 30,
1998.  The  catalog's  net income for the three  months  ended June 30, 1999 was
$46,822, as compared to the catalog's net income of $27,137 for the three months
ended June 30, 1998.  The catalog's net income for the six months ended June 30,
1999 was $88,069, as compared to the catalog's net income of $77,129 for the six
months ended June 30, 1998.

Liquidity and Financial Resources

The Company's  overall  financial  condition  remains strong as reflected in the
Condensed  Consolidated  Balance  Sheets at June 30, 1999 and December 31, 1998.
Working  capital at June 30, 1999 and December 31, 1998 was  approximately  $2.9
million and $3.7 million,  respectively,  including cash and cash equivalents of
approximately  $1.5  million  and  $2.1  million,  respectively.  The  Company's
decrease in cash and cash equivalents of  approximately  $649,000 was the result
primarily of costs  associated  with the  litigation  settlement  and employment
contract termination, which included cash payments of approximately $300,000 and
$88,000, respectively.

                                  Page 13 of 18


<PAGE>

Liquidity and Financial Resources (continued)

There were no  investing  activities  during the six months ended June 30, 1999.
Investing  activities  generated  approximately  $276,000  during the six months
ended June 30, 1998, consisting primarily of a distribution of $275,000 received
from New Hydromercial Partners, the Company's joint venture with QVC.

There were no financing activities during the six months ended June 30, 1999 and
1998.

Based on the Company's present cash position,  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 thirty day
payment  terms in  connection  with sales to QVC and  anticipated  sales to Home
Shopping, management does not anticipate any difficulty in financing foreseeable
inventory  requirements.  However, since sales to QVC represented  approximately
68% of the  Company's  net sales for the six months ended June 30, 1999,  if the
company fails to consummate the Home Shopping Agreement,  the termination of the
Former License  Agreement would have a material  adverse effect on the Company's
business,  financial  condition and results of operations.  Although the Company
and Home  Shopping are in the final stages of  negotiation  of the Home Shopping
Agreement,  there can be no assurance  that the Home Shopping  Agreement will be
concluded.

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 the date on which  Hydron  products  first  air 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.

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

                                  Page 14 of 18


<PAGE>

Liquidity and Financial Resources (continued)

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

                                  Page 15 of 18


<PAGE>

Liquidity and Financial Resources (continued)

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.

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 16 of 18


<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 2, 1999), reporting items 5
    and 7.

                                  Page 17 of 18


<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: August 23, 1999

                                  Page 18 of 18