U.S.
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
                    March 31,
2008


OR





 ̈
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE


ACT OF
1934





For
      the transition period from
                        
                        to





Commission File Number
                    1-6436





FRAWLEY CORPORATION(EXACT
      NAME OF REGISTRANT AS SPECIFIED IN ITS
CHARTER)





Delaware
                          95-2639686(STATE
      OR OTHER JURISDICTION OF INCORPORATION)
                          (I.R.S.
      EMP I.D. NO)5737
      Kanan Rd. PMB # 188, Agoura Hills, California
                          91301(ADDRESS
      OF PRINCIPAL EXECUTIVE OFFICES)
                          (ZIP
      CODE)(818)735-6640(REGISTRANT'S
      TELEPHONE NUMBER, INCLUDING AREA CODE)(FORMER
      NAME, ADDRESS AND FISCAL YEAR, IF CHANGED SINCE LAST
    REPORT)





Indicated
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.


YESxNO ̈





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.):





YES ̈NOx





Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the close of
the latest practicable date.





Common stock, par value $1
              
              1,222,900(Class)
              
              Outstanding
      at March 31, 2008





Total
Number of Pages13









FRAWLEY
CORPORATION AND SUBSIDIARIES





INDEX





PAGE
      NO.PART
      I:  FINANCIAL INFORMATIONItem
      1:  Financial StatementsConsolidated
      Balance SheetsMarch
      31, 2008 and December 31, 2007
                            
                            3Consolidated
      Statements of OperationsThree
      Months Ended March 31, 2008 and 2007
                            
                            4Consolidated
      Statements of Cash FlowsNine
      Months Ended March 31, 2008 and 2007
                            
                            5Notes
      to Consolidated Financial Statements
                            
                            6Item
      2:  Management's Discussion and Analysisof
      Financial Condition and Results of Operations
                            
                            7PART
      II:  OTHER INFORMATIONItem
      1:  Legal Proceedings
                            
                            8-9Item
      5:  Other Information
                            
                            9Item
      6:  Exhibits and Reports on Form 8-K
                            
                            9SIGNATURES
                            
                            10




2




ITEM
I:  FINANCIAL STATEMENTS


FRAWLEY
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS





MARCH
      31,
                                          
                                          
                                          DECEMBER
      31,2008
                                          
                                          
                                          2007(Unaudited)CURRENT
      ASSETSCash
                                          
                                          $
                                          4,000
                                          
                                          
                                          $
                                          14,000Accounts
      receivable, net
                                          
                                          
                                          4,000
                                          
                                          
                                          
                                          4,000Prepaid
      expenses and other current assets
                                          
                                          
                                          5,000
                                          
                                          
                                          
                                          18,000TOTAL
      CURRENT ASSETS
                                          
                                          
                                          13,000
                                          
                                          
                                          
                                          36,000Real
      estate investments, net
                                          
                                          
                                          457,000
                                          
                                          
                                          
                                          457,000Investment
      in partnership
                                          
                                          
                                          16,000
                                          
                                          
                                          
                                          16,000TOTAL
      ASSETS
                                          
                                          $
                                          486,000
                                          
                                          
                                          $
                                          509,000LIABILITIES AND STOCKHOLDERS’
      DEFICITCURRENT
      LIABILITIESNotes
      payable to stockholders
                                          
                                          $
                                          2,397,000
                                          
                                          
                                          $
                                          2,387,000Accounts
      payable and accrued expenses
                                          
                                          
                                          169,000
                                          
                                          
                                          
                                          173,000Interest
      payable to related parties
                                          
                                          
                                          2,112,000
                                          
                                          
                                          
                                          2,050,000Deposits
                                          
                                          
                                          374,000
                                          
                                          
                                          
                                          374,000TOTAL
      CURRENT LIABILITIES
                                          
                                          
                                          5,052,000
                                          
                                          
                                          
                                          4,984,000LONG
      TERM LIABILITIESLong
      term note payable
                                          
                                          
                                          160,000
                                          
                                          
                                          
                                          160,000TOTAL
      LIABILITIES
                                          
                                          
                                          5,212,000
                                          
                                          
                                          
                                          5,144,000STOCKHOLDERS’
      DEFICIT:Preferred
      stock, par value $1 per share:Authorized,
      1,000,000 shares; none issuedCommon
      stock, par value $1 per share;Authorized,
      6,000,000 shares, issued1,414,217
      shares
                                          
                                          
                                          1,414,000
                                          
                                          
                                          
                                          1,414,000Capital
      surplus
                                          
                                          
                                          17,209,000
                                          
                                          
                                          
                                          17,209,000Accumulated
      deficit
                                          
                                          
                                          (22,588,000
                                          )
                                          
                                          
                                          (22,497,000
                                          )(3,965,000
                                          )
                                          
                                          
                                          (3,874,000
                                          )Less
      common stock in treasury,191,312
      shares (at cost)
                                          
                                          
                                          (761,000
                                          )
                                          
                                          
                                          (761,000
                                          )TOTAL
      STOCKHOLDERS’ DEFICIT
                                          
                                          
                                          (4,726,000
                                          )
                                          
                                          
                                          (4,635,000
                                          )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                                          
                                          $
                                          486,000
                                          
                                          
                                          $
                                          509,000





See notes
to consolidated financial statements.




3




FRAWLEY
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


(UNAUDITED)





Three
      Months Ended
                            MARCH
      31,2008
                          
                          
                          2007REVENUES:Other
      income
                          
                          $
                          -
                          
                          
                          $
                          -COSTS
      AND EXPENSES:Selling,
      general and administrativeexpenses
                          
                          
                          29,000
                          
                          
                          
                          62,000Interest
      expense
                          
                          
                          62,000
                          
                          
                          
                          52,000TOTAL
      COSTS AND EXPENSES
                          
                          
                          91,000
                          
                          
                          
                          114,000NET
      LOSS
                          
                          $
                          (
      91,000
                          )
                          
                          $
                          (114,000
                          )NET
      LOSS PER SHARE, COMMON
                          
                          $
                          (0.07
                          )
                          
                          $
                          (0.09
                          )FULLY
      DILUTED
                          
                          $
                          (0.07
                          )
                          
                          $
                          (0.09
                          )Weighted
      average number ofCommon
      shares outstanding
                          
                          
                          1,222,900
                          
                          
                          
                          1,222,900





See notes
to consolidated financial statements.




4




FRAWLEY
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(UNAUDITED)





Three
      Months EndedMARCH
      31,2008
                      
                      
                      2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                      
                      $
                      (
      91,000
                      )
                      
                      $
                      (114,000
                      )Adjustments
      to reconcile net loss to netcash
      used in operating activities:Changes
      in operating assets and liabilities:Short
      and long-term accounts receivable, net
                      
                      
                      -
                      
                      
                      
                      -Prepaid
      expenses and other current assets
                      
                      
                      13,000
                      
                      
                      
                      16,000Accounts
      payable and accrued liabilities
                      
                      
                      58,000
                      
                      
                      
                      31,000TOTAL
      ADJUSTMENTS
                      
                      
                      71,000
                      
                      
                      
                      47,000NET
      CASH USED IN OPERATINGACTIVITIES
                      
                      
                      (
      20,000
                      )
                      
                      
                      (
      67,000
                      )CASH
      FLOWS FROM FINANCING ACTIVITIES:Short-term
      debt borrowings from related party
                      
                      
                      10,000
                      
                      
                      
                      78,000NET
      CHANGE IN CASH AND CASH EQUIVALENTS
                      
                      
                      (10,000
                      )
                      
                      
                      11,000CASH,
      BEGINNING OF PERIOD
                      
                      
                      14,000
                      
                      
                      
                      7,000CASH,
      END OF PERIOD
                      
                      $
                      4,000
                      
                      
                      $
                      18,000





See notes
to consolidated financial statements.




5




FRAWLEY
CORPORATION AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE
      1:
            In
      the opinion of management, the accompanying unaudited consolidated
      financial statements contain all adjustments necessary to present fairly
      the financial position as of March 31, 2008, and the results of operations
      and changes in cash flows for the three months then
  ended.





NOTE
      2:
            The
      results of operations for the three months ended March 31, 2008 as
      compared to the results of 2007 are not necessarily indicative of results
      to be expected for the full year.




6




FRAWLEY
CORPORATION AND SUBSIDIARIES


ITEM 2:
              MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF
      OPERATIONS





Real
Estate





For the
quarter ended March 31, 2008, the real estate operating loss was $74,000
compared to a loss of $88,000 for the same period in 2007. However, real estate
losses will continue as the Company incurs carrying costs and improvements
required to sell the remaining properties.





In
February 2004, the Company received notice from Los Angeles County that the
county intends to severely restrict grading permits and may require condition
use permits for grading on the Company’s property.  In addition, the
County of Los Angeles announced its intention to restrict the building of
residences on three of the Company’s six parcels of land because of new
ridgeline building ordinances. Prior to the ordinance deadline, the Company
received grandfathering status on three of its remaining parcels. Because the
grandfathering clause is conditional, it is unclear whether or not the Company
will be able to take advantage of this grandfathering status until the Company
completes the permit process.  The above regulations potentially
require multi-year processing to reach the point that a parcel can be sold to a
third party.





If an
agreement cannot be reached with Los Angeles County, these new regulations may
force the Company to liquidate its real estate, make settlements with its
lenders and close down its real estate development business.  As of
March 31, 2008, no decision has been made by management regarding liquidation,
nor can they determine the potential financial impact to the
Company.  Accordingly, the March 31, 2008 financial statements do not
reflect any adjustments that might result from these new and more stringent
regulations.





Subsequent
to March 31, 2008, the Company received rough grading sign off for one of the
three parcels that the Company had previously received grandfathering status on.
The Company is currently marketing this property for sale. The Company’s real
estate broker has informed the Company there are no current lenders for real
estate sales involving land-only sales.   As a result, the
Company will have to seek a cash buyer or possibly discount the potential sales
price.





Liquidity and Capital
Resources





The
Company’s recurring losses from continuing operations and difficulties in
generating cash flow sufficient to meet its obligations raise substantial doubt
about its ability to continue as a going concern.





Real
Estate and Corporate overhead are producing losses that the real-estate business
is unable to absorb. The required investments in real estate are currently
funded from loans.





The
Company intends to meet its obligations through real estate
sales.  The limited resources available to the Company will be
directed at reducing operating expenses and selling real estate.




7




PART
II - OTHER INFORMATION





ITEM
1: Legal
Proceedings





The
Company is named as a defendant in the Chatham Brothers Toxic Waste cleanup
lawsuit.  In February 1991, the Company was identified as one of many
“Potentially Responsible Parties” (PRPS) in the Chatham Brothers toxic waste
cleanup site case, filed by the State of California – Environmental Protection
Agency, Department of Toxic Substances Control (DTSC) and involved the Harley
Pen Company previously owned by the Company.





On
December 31, 1991, the Company and approximately 90 other companies were named
in a formal complaint.  The Company joined a group of defendants, each
of whom was so notified and which is referred to as Potentially Responsible
Parties (PRPs) for the purpose of negotiating with the DTSC and for undertaking
remediation of the site. Between 1995 and 1998, the State of California adjusted
the estimated cost of remediation on several occasions.  As a result,
the Company has increased their recorded liability to reflect their share. In
January, 1999, the PRP’s consent decree was approved by the Court. As of March
31, 2008 the Company had paid into the PRP Group approximately $1,040,000, which
includes the assignment of a $250,000 note receivable with
recourse.





During
the past several years, the Company had requested a Hardship Withdrawal
Settlement with the PRP group due to the Company’s financial
condition.  The PRP group had continually denied the Company’s
request.  In December 2003, the Company again formally requested a
Hardship Withdrawal Settlement with the PRP Group.  The Company’s
proposal was for payment of $240,000 over four years in exchange for complete
release from all further legal and financial responsibility related to the
environmental liability.





On July
16, 2004, the Company entered in a settlement agreement with the Chatham Site
PRP Group Trust for a $240,000 payment to be paid as follows: $100,000 on
December 31, 2004, $50,000 on December 31, 2005, $50,000 on December 31, 2006
and $40,000 on December 31, 2007.  The Company would not be fully
released from the environmental liability until the settlement agreement note of
$240,000 and the assigned note in the amount of $250,000 were paid in full.
During 2007, the assigned note was paid in full.





In March
2006, the Company made a payment in the amount of $150,000 related to the
settlement agreement note representing the payments due on December 31, 2004 and
December 31, 2005.  The Company did not make the scheduled payment on
December 31, 2006.  As of December 31, 2006, the Company owed late
payment penalties totaling approximately $20,000 for the years 2004, 2005 and
2006.  These penalties were recognized as interest expense for the
year ended December 31, 2006 and the liability was accrued as a portion of the
environmental reserve included in current liabilities.  In December
2007, the Company made a final payment in the amount of $112,000, of which
$90,000 represented payment towards the accrued liability and $22,000
represented payment of additional interest for late payments.  As a
result of this payment and pursuant to the settlement agreement, the Company is
not responsible for any additional liability related to this site, other than
any new claims.  Therefore, the Company removed the remaining
liability from its books as of December 31, 2007 and recognized a gain on
extinguishment of this debt in the amount of $1,107,000.




8




Complying
with the terms of the note relieves Frawley Corporation from  any
liability related to the Chatham Site action approved by the State of California
in 1999. However, the PRP Group did not indemnify Frawley Corporation for any
third party lawsuits related to the Chatham Site cleanup that are not considered
in the remediation action plan approved in 1999.





In June
2004 the Corporation received a new environmental claim against its former
Harley pen division in the amount of approximately $99,000.  The claim
has been made by the United States Environmental Toxic Agency concerning the
Company’s alleged responsibility for the Omega Chemical Superfund
Site.  During 2006, the Company agreed to pay the liability in
installment payments through January 2007.  The Company made payments
of approximately $52,000 during 2006 and of approximately $26,000 during 2007.
In September 2007, the Company was granted a postponement of the additional
payments due until March 2009.  The balance of approximately $21,000
is included in current liabilities.





ITEM
      5:
            Other
      Information








Related Party
Transactions





During
the first quarter ended March 31, 2008, the Company borrowed approximately
$10,000 from the Frawley Family Trust.  These loans are secured by
Deeds of trust on the Company’s real estate property.





ITEM
      6:
            Exhibits and Reports
      on Form 8-K





Exhibit
31.1 – Sarbanes-Oxley Act Section 302 Certification


Exhibit
32.1 – Certification of CEO and CFO





No
reports on Form 8-K were filed during the quarter ended March 31,
2008.




9




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.





FRAWLEY
      CORPORATION(REGISTRANT)





Date:
                        July
      2, 2009
                        
                        By
                        /s/
      Michael P FrawleyMICHAEL
      P. FRAWLEY, President(Authorized
      Officer andChief
      Financial Officer)




10