UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington D.C. 20549
                                    ---------

                                   FORM 10-QSB

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the quarter ended  December 31, 1998    Commission File Number   000-28876

                            CHEM INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

                         Delaware                           13-3035216       
            (State or other jurisdiction of              (I.R.S. Employer
            incorporation or organization)              Identification No.)

                  201 Route 22
              Hillside, New Jersey                             07205   
            (Address of principal executive offices)        (Zip code)

Registrant's telephone number, including area code:        (973) 926-0816
                                                        --------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the  Securities  and  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.

                              Yes   X        No       

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


             Class                        Outstanding as of February 10, 1999
----------------------------------        -----------------------------------

Common Stock, Par Value                                  5,178,300


<PAGE>



CHEM INTERNATIONAL, INC.
------------------------------------------------------------------------------


INDEX
------------------------------------------------------------------------------




Part I: Financial Information

Item 1: Consolidated Financial Statements

        Consolidated Balance Sheet as of December 31, 1998 [Unaudited] 1...2

        Consolidated Statements of Operations for the three and six months
        ended December 31, 1998 and 1997 [Unaudited].................. 3

        Consolidated Statement of Stockholders' Equity for the six months
        ended December 31, 1998 [Unaudited]........................... 4

        Consolidated Statements of Cash Flows for six months ended
        December 31, 1998 and 1997 [Unaudited]........................ 5.....6

        Notes to Consolidated Financial Statements [Unaudited]........ 7.....14

Item 2: Management's Discussion and Analysis of Financial Condition
        and Results of Operations.................................... 15.....18

Part II: Other Information........................................... 19

Signature............................................................ 20




                          .   .   .   .   .   .   .   .


<PAGE>



CHEM INTERNATIONAL, INC.
------------------------------------------------------------------------------


CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1998.
[UNAUDITED]
------------------------------------------------------------------------------


<TABLE>


Assets:
Current Assets:
<S>                                                                     <C>        
  Cash and Cash Equivalents                                             $   388,366
  Accounts Receivable - Net                                               2,012,882
  Deferred Income Taxes                                                      85,000
  Inventories                                                             3,899,020
  Prepaid Expenses and Other Current Assets                                 221,309
  Refundable Federal Income Taxes                                           196,645
                                                                        -----------

  Total Current Assets                                                    6,803,222

Property and Equipment - Net                                              1,615,762
                                                                        -----------

Other Assets:
  Deferred Income Taxes                                                      49,000
  Security Deposits and Other Assets                                        107,067

  Total Other Assets                                                        156,067

  Total Assets                                                          $ 8,575,051
                                                                        ===========




The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

</TABLE>
                                         1

<PAGE>



CHEM INTERNATIONAL, INC.
------------------------------------------------------------------------------


CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1998.
[UNAUDITED]
------------------------------------------------------------------------------

<TABLE>



Liabilities and Stockholders' Equity:
Current Liabilities:
<S>                                                                     <C>        
  Accounts Payable                                                      $ 2,283,423
  Notes Payable                                                             549,562
  Accrued Expenses and Other Current Liabilities                            234,929
  Accrued Expenses - Related Party                                           55,000
  Capital Lease Obligation                                                   35,582
                                                                        -----------

  Total Current Liabilities                                               3,158,496

Non-Current Liabilities:
  Notes Payable                                                             161,370
  Notes Payable - Related Party                                             699,811
  Capital Lease Obligation                                                   49,350
                                                                        -----------

  Total Non-Current Liabilities                                             910,531

Commitments and Contingencies [9]                                                --

Stockholders' Equity:
  Preferred Stock - Authorized 1,000,000 Shares,
   $.002 Par Value, No Shares Issued                                             --

  Common Stock - Authorized 25,000,000 Shares,
   $.002 Par Value, 5,178,300 Shares Issued and Outstanding                  10,357

  Additional Paid-in Capital                                              4,847,405

  Accumulated [Deficit]                                                    (351,738)

  Total Stockholders' Equity                                              4,506,024

  Total Liabilities and Stockholders' Equity                            $ 8,575,051
                                                                        ===========



The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
</TABLE>

                                         2

<PAGE>



CHEM INTERNATIONAL, INC.
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------

<TABLE>


                                 Three months ended            Six months ended
                                    December 31,                 December 31,
                                    ------------                 ------------
                                 1 9 9 8      1 9 9 7        1 9 9 8       1 9 9 7
                                 -------      -------        -------       -------

<S>                           <C>           <C>            <C>          <C>        
Sales                         $ 2,839,762   $2,618,510     $5,063,494   $ 4,970,100

Cost of Sales                   2,777,609    2,192,211      4,910,204     4,214,963
                              -----------   ----------     ----------   -----------

  Gross Profit                     62,153      426,299        153,290       755,137

Selling and Administrative
  Expenses                      1,001,359      719,969      1,684,299     1,315,725
                              -----------   ----------     ----------   -----------

  Operating [Loss]               (939,206)    (293,670)    (1,531,009)     (560,588)
                              -----------   ----------     ----------   -----------

Other Income [Expense]:
  Interest Expense -
      Related Party               (18,807)          --        (37,614)           --
  Interest Expense                (15,862)     (16,784)       (28,405)      (27,981)
  Interest and Investment
      Income                          131        2,819            348        19,435
  Loss on Investment in
      Partnership                      --       (1,497)            --        (5,000)
                               ----------   ----------     ----------   -----------

  Total Other [Expense]           (34,538)     (15,462)       (65,671)      (13,546)
                              -----------   ----------     ----------   -----------

  [Loss] Before Income Taxes     (973,744)    (309,132)    (1,596,680)     (574,134)

Federal and State Income
  Tax Expense [Benefit]           (15,594)    (103,046)      (215,779)     (185,746)
                              -----------   ----------     ----------   -----------

  Net [Loss]                  $  (958,150)  $ (206,086)    $(1,380,901) $  (388,388)
                              ===========   ==========     ===========  ===========

  Net [Loss] Per Common Share
   [Basic and Diluted]        $      (.19)  $     (.05)    $     (.27)  $      (.09)
                              ===========   ==========     ==========   ===========

  Average Common Shares
   Outstanding                  5,178,300    4,335,000      5,178,300     4,335,000
                              ===========   ==========     ==========   ===========



The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

                                         3
</TABLE>

<PAGE>



CHEM INTERNATIONAL, INC.
------------------------------------------------------------------------------


CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE SIX MONTHS
ENDED DECEMBER 31, 1998.
[UNAUDITED]
------------------------------------------------------------------------------


<TABLE>


                                                     Additional                  Total
                            Common Stock    Preferred  Paid-in   Accumulated   Stockholders'
                          Shares  Par Value   Stock    Capital    [Deficit]      Equity

<S>            <C>       <C>       <C>       <C>      <C>        <C>         <C>        
Balance - July 1, 1998   5,178,300 $ 10,357  $     -- $4,847,405 $1,029,163  $ 5,886,925

Net [Loss] for the six
 months ended
 December 31, 1998              --        --       --        --  (1,380,901)  (1,380,901)
                         ---------  -------- -------- ---------  ----------  -----------

Balance -
 December 31, 1998       5,178,300  $ 10,357 $     -- $4,847,405 $ (351,738) $ 4,506,024
                         =========  ======== ======== ========== =========== ===========




The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

</TABLE>
                                         4

<PAGE>



CHEM INTERNATIONAL, INC.
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
------------------------------------------------------------------------------
<TABLE>


                                                               Six months ended
                                                                 December 31,
                                                             1 9 9 8       1 9 9 7
                                                             -------       -------
Operating Activities:
<S>                                                        <C>          <C>         
  Net [Loss]                                               $(1,380,901) $   (388,388)
                                                           -----------  ------------
  Adjustments to Reconcile Net [Loss] to Net Cash
   [Used for] Operating Activities:
   Depreciation and Amortization                               200,961       157,933
   Amortization of Discount on Note Payable                     11,364            --
   Deferred Income Taxes                                       (34,000)      (22,000)
   Imputed Interest on Note Payable - Related Party                 --         7,051
   Loss on Investment in Partnership                                --         5,000
   Interest Income on Note Receivable                               --       (11,627)
   Bad Debt Expense                                              5,000            --
   Writeoff of Note Receivable                                      --        33,058
   Writeoff of Goodwill                                        275,891            --

  Changes in Assets and Liabilities:
   [Increase] Decrease in:
     Accounts Receivable                                     1,443,055       675,094
     Inventories                                              (377,210)   (1,208,900)
     Refundable Federal Income Taxes                          (196,645)     (170,000)
     Prepaid Expenses and Other Current Assets                 (43,953)       16,455
     Security Deposits and Other Assets                         (2,060)      (23,938)

   Increase [Decrease] in:
     Accounts Payable                                         (553,619)      479,773
     Federal and State Income Taxes Payable                    (40,000)      (41,416)
     Accrued Expenses and Other Liabilities                    139,490        (2,238)
                                                            ----------   -----------

   Total Adjustments                                           828,274      (105,755)
                                                            ----------   -----------

  Net Cash - Operating Activities                             (552,627)     (494,143)
                                                            ----------   -----------

Investing Activities:
  Repayment of Note Receivable                                      --       250,000
  Purchase of Property and Equipment                          (165,367)     (361,975)
  Loans to Stockholders'                                       (13,017)           --
  Loan to Related Company                                           --         2,500
                                                            ----------   -----------

  Net Cash - Investing Activities                             (178,384)     (109,475)
                                                            ----------   -----------

Financing Activities:
  Proceeds from Notes Payable                                  670,000            --
  Repayment of Notes Payable                                  (507,026)      (24,798)
                                                            ----------   -----------

  Net Cash - Financing Activities                              162,974       (24,798)
                                                            ----------   -----------

  Net [Decrease] in Cash and Cash Equivalents                 (568,037)     (628,416)

Cash and Cash Equivalents - Beginning of Periods               956,403     1,010,256
                                                            ----------   -----------

  Cash  and  Cash  Equivalents  -  End  of  Periods         $  388,366   $   381,840

The Accompanying  Notes  are  an  Integral  Part  of  These  Consolidated  Financial Statements.

                                         5
</TABLE>

<PAGE>



CHEM INTERNATIONAL, INC.
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
------------------------------------------------------------------------------


<TABLE>


                                                               Six months ended
                                                                 December 31,
                                                             1 9 9 8       1 9 9 7
                                                             -------       -------

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the periods for:
<S>                                                        <C>          <C>        
   Interest                                                $   38,913   $    20,825
   Income Taxes                                            $   51,047   $    66,045



The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
</TABLE>

                                         6

<PAGE>



CHEM INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
------------------------------------------------------------------------------



[1] Business

Chem  International,  Inc.  [the  "Company"]  is engaged  primarily  in the
manufacturing,  marketing  and sales of vitamins,  nutritional  supplements  and
herbal  products.  Its customers  are located  primarily  throughout  the United
States and Europe.

[2] Summary of Significant Accounting Policies

Principles of Consolidation - The accompanying consolidated financial statements
include  the  accounts  of the  Company  and its  subsidiaries  all of which are
wholly-owned.  Intercompany  transactions  and balances have been  eliminated in
consolidation.

Basis of Reporting - The accompanying  unaudited  interim  financial  statements
have been prepared in accordance with generally accepted  accounting  principles
for interim  financial  information and with the instructions to Form 10-QSB and
Item  310(b)of  Regulation  S-B.  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,  such interim
statements  include all adjustments  which are considered  necessary in order to
make the interim financial statements not misleading. It is suggested that these
financial  statements be read in conjunction  with the financial  statements and
notes thereto,  together with management's  discussion and analysis of financial
condition and results of operations, contained in the Company's annual report to
stockholders  incorporated  by reference in the Company's  annual report on Form
10-KSB for the fiscal year ended June 30, 1998.  The results of  operations  for
the six months ended  December 31, 1998 are not  necessarily  indicative  of the
results for the entire fiscal year ending June 30, 1999.

Cash and Cash  Equivalents - Cash  equivalents  are comprised of certain  highly
liquid investments with a maturity of three months or less when purchased.

Inventories - The inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out method.

Depreciation - The Company follows the general policy of  depreciating  the cost
of property and equipment over the following estimated useful lives:

Leasehold Improvements                              15 Years
Machinery and Equipment                              7 Years
Machinery and Equipment Under Capital Leases         7 Years
Transportation Equipment                             5 Years

Machinery  and  equipment  are  depreciated  using  accelerated   methods  while
leasehold  improvements  are amortized on a  straight-line  basis.  Depreciation
expense was $194,967 and $151,939 for the six months ended December 31, 1998 and
1997,  respectively.  Amortization of equipment under capital leases is included
with depreciation expense.

Goodwill - At December 31,  1998,  goodwill  with a carrying  value of $275,891,
which  arose in  connection  with the  acquisition  of the  Company's  principal
operating business subsidiary,  was written down to zero due to impairment.  The
writeoff of goodwill is included in the  December  31, 1998 income  statement as
part of selling and administrative expenses.

Amortization  expense was $5,994 for each of the six months  ended  December 31,
1998 and 1997.

                                        7

<PAGE>



CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #2
[UNAUDITED]
------------------------------------------------------------------------------



[2] Summary of Significant Accounting Policies [Continued]

Estimates - The preparation of financial statements in conformity with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Net [Loss] Per Share -The FASB  issued SFAS No.  128,  "Earnings  Per Share," in
February  1997.   SFAS  No.  128  simplifies  the  earnings  per  share  ["EPS"]
calculations required by Accounting Principles Board ["APB"] Opinion No. 15, and
related  interpretations,  by replacing the  presentation  of primary EPS with a
presentation of basic EPS. SFAS No. 128 requires dual  presentation of basic and
diluted EPS by entities with complex capital  structures.  Basic EPS includes no
dilution and is computed by dividing income available to common  stockholders by
the weighted-average number of common shares outstanding for the period. Diluted
EPS  reflects  the  potential  dilution  of  securities  that could share in the
earnings of an entity,  similar to the fully  diluted EPS of APB Opinion No. 15.
SFAS No. 128 is effective for  financial  statements  issued for periods  ending
after December 15, 1997,  including interim periods;  earlier application is not
permitted.  The Company has adopted SFAS No. 128 in these financial  statements.
Basic EPS is based on average common shares  outstanding and diluted EPS include
the  effects of  potential  common  stock,  such as,  options and  warrants,  if
dilutive. Potential common shares of 150,000 are not currently dilutive, but may
be in the future. Adoption of SFAS No. 128 is not material to the Company.

Revenue Recognition - The Company generally  recognizes revenue upon shipment of
the product.

Impairment  - Certain  long-term  assets of the  Company's  principal  operating
business  subsidiary are reviewed at least annually as to whether their carrying
value has become  impaired,  pursuant to guidance  established  in  Statement of
Financial  Accounting Standards ["SFAS"] No. 121, "Accounting for the Impairment
of Long-Lived  Assets and for Long-Lived  Assets to Be Disposed Of."  Management
considers  assets to be  impaired  if the  carrying  value  exceeds  the  future
projected cash flows from related operations  [undiscounted and without interest
charges].  If impairment is deemed to exist,  the assets will be written down to
fair value which  represents  the projected  discounted  cash flows from related
operations.   Management  also  re-evaluates  the  periods  of  amortization  to
determine whether subsequent events and circumstances  warrant revised estimates
of useful lives. As of December 31, 1998,  management expects these assets to be
fully recoverable.

Advertising - Costs  incurred for producing and  communicating  advertising  are
expensed when  incurred.  Advertising  expense was $173,280 and $129,708 for the
six months ended December 31, 1998 and 1997, respectively.

[3] Inventories

Inventories consist of the following at December 31, 1998:

Raw Materials                 $ 2,331,431
Work-in-Process                   763,864
Finished Goods                    803,725
                              -----------

  Total                       $ 3,899,020
  -----                       ===========




                                        8

<PAGE>



CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #3
[UNAUDITED]
------------------------------------------------------------------------------



[4] Property and Equipment

Property and equipment comprise the following at December 31, 1998:

Leasehold Improvements                            $1,083,816
Machinery and Equipment                            2,406,865
Machinery and Equipment Under Capital Leases         109,545
Transportation Equipment                              32,152

Total                                              3,632,378
Less:  Accumulated Depreciation and Amortization   2,016,616

  Total                                           $1,615,762

[5] Notes Payable

Notes payable are summarized as follows at December 31, 1998:

                                                         Related Party
                                           Notes Payable Note Payable    Total
Notes Payable:
  Bio Merieux Vitek, Inc. (a)               $   55,099   $        --  $   55,099
  President and Chief Executive Officer (b)         --       699,811     699,811
  First Union National Bank:
   Revolving Line-of-Credit (c)                500,000            --     500,000
   Equipment Term Loan (d)                     155,833            --     155,833
                                            ----------   -----------  ----------

  Totals                                       710,932       699,811   1,410,743
  Less:  Current Portion                       549,562            --     549,562
                                            ----------   -----------  ----------

   Noncurrent Portion                       $  161,370   $   699,811  $  861,181
   ------------------                       ==========   ===========  ==========

(a)Five year 10%  equipment  note  dated  April 1, 1997  providing  for  monthly
   payments of $1,698 for principal and interest.  The note is collateralized by
   laboratory equipment.

(b)Three year  non-collaterized  7%  promissory  note for $750,000  with related
   party providing for quarterly payments of $13,125 representing interest only.
   The note matures on March 12, 2001. As additional  consideration for the loan
   and in the  light of the  below  market  interest  rate and  uncollateralized
   nature of the loan,  the  Corporation  issued a Class C Warrant  to  purchase
   150,000  shares of common stock at the aggregate  purchase price of $1.75 per
   share.  The note is recorded net of $68,182,  which represents the fair value
   of the Class C warrant. The amortization at December 31, 1998 was $11,364 and
   is classified as interest expense in the Company's financial statements.  The
   warrant is exercisable  for a four year period  commencing one year after the
   issuance of the note and expires on March 12, 2003.

(c)Under the terms of a revolving line of credit which expires on July 27, 1999,
   the Company may borrow up to  $500,000 at 1% above the bank's  prime  lending
   rate. The loan is collateralized by the assets of Manhattan Drug Company. The
   loan has been guaranteed by the Company's principal stockholder.  At December
   31, 1998, the interest rate was 8.75%.




                                        9

<PAGE>



CHEM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #4
[UNAUDITED]
------------------------------------------------------------------------------



[5] Notes Payable [Continued]

(d)Under the terms of a five year equipment term loan,  dated July 27, 1998, the
   Company  may borrow up to $395,000  at 1.5% above the bank's  prime  interest
   rate. The term loan provides for monthly payments of $2,834 for principal and
   monthly payments for interest.  The loan is  collateralized  by the assets of
   Manhattan  Drug  Company.  The  loan  has been  guaranteed  by the  Company's
   principal stockholder. At December 31, 1998, the interest rate was 9.25%.

The loan  agreement with First Union  National Bank contains  certain  financial
covenants relating to the maintenance of specified liquidity, debt to equity and
debt coverage  ratios and requires  that the  Company's  president and principal
stockholder  maintain a minimum stock ownership  percentage of the Company.  The
Company was not in  compliance  with its debt coverage  ratio on a  consolidated
basis at December 31, 1998.

The following are maturities of long-term debt for each of the next five years:

                                                         Related Party
                                           Notes Payable Note Payable    Total
December 31,
  1999                                      $  549,562   $        --  $  549,562
  2000                                          51,192            --      51,192
  2001                                          52,992       699,811     752,803
  2002                                          37,353            --      37,353
  2003                                          19,833            --      19,833
                                            ----------   -----------  ----------

  Totals                                    $  710,932   $   699,811  $1,410,743
  ------                                    ==========   ===========  ==========

[6] Capital Lease

The Company  acquired  equipment under the provision of a long-term  lease.  The
lease  expires  in March  2001.  The  equipment  under the  capital  lease as of
December  31, 1998 had a cost of $109,545  accumulated  depreciation  of $29,068
with a net book value of $80,477

The future minimum lease payments under capital leases and the net present value
of the future minimum lease payments at December 31, 1998 are as follows:

Total Minimum Lease Payments                $  104,900
Amount Representing Interest                   (19,968)
                                            ----------

Present Value of Net Minimum Lease Payments     84,932
Current Portion                                (35,582)

  Long-Term Capital Lease Obligation        $   49,350

[7] Significant Risks and Uncertainties

[A]  Concentrations  of Credit Risk - Cash - The Company  maintains  balances at
several financial institutions.  Accounts at each institution are insured by the
Federal Deposit Insurance  Corporation up to $100,000. At December 31, 1998, the
Company's uninsured cash balances totaled  approximately  $112,000.  The Company
does not require collateral in relation to cash credit risk.

                                       10

<PAGE>



CHEM INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #5
[UNAUDITED]
------------------------------------------------------------------------------



[7] Significant Risks and Uncertainties [Continued]

[B] Concentrations of Credit Risk - Receivables - The Company routinely assesses
the financial strength of its customers and, based upon factors  surrounding the
credit  risk  of its  customers,  establishes  an  allowance  for  uncollectible
accounts and, as a  consequence,  believes that its accounts  receivable  credit
risk exposure  beyond such  allowances is limited.  The Company does not require
collateral in relation to its trade accounts  receivable credit risk. The amount
of the allowance for uncollectible accounts at December 31, 1998 is $30,750.

[8] Major Customer

For the six months ended December 31, 1998 and 1997,  approximately  40% and 45%
of revenues were derived from one customer. The loss of this customer would have
an adverse affect on the Company's operations.  In addition,  for the six months
ended  December 31, 1998 and 1997,  an aggregate of  approximately  18% and 15%,
respectively,  of  revenues  were  derived  from two other  customers;  no other
customers  accounted for more than 10% of consolidated  sales for the six months
ended  December  31, 1998 and 1997.  Accounts  receivable  from these  customers
comprised approximately 64% and 57% of total accounts receivable at December 31,
1998 and 1997, respectively.

[9] Commitments and Contingencies

[A] Leases

Related Party Leases - Certain  manufacturing  and office  facilities are leased
from Gerob Realty  Partnership  ["Gerob"] whose partners are stockholders of the
Company.  The lease, which expires on December 31, 1999,  provides for a minimum
annual  rental of $60,000 plus payment of all real estate  taxes.  Rent and real
estate tax expense for the six months  ended  December 31, 1998 and 1997 on this
lease was  approximately  $41,000  and  $58,000,  respectively.  Unpaid  rent of
$55,000  due to Gerob at  December  31, 1998 has been  separately  disclosed  as
accrued expenses on the consolidated balance sheet.

Other warehouse and office facilities are leased from Vitamin Realty Associates,
L.L.C.,  a  limited  liability  company,  which is 90%  owned  by the  Company's
president and principal  stockholder and certain family members and 10% owned by
the Company's  Chief Financial  Officer.  The lease was effective on January 10,
1997 and provides for minimum annual rental of $346,000 through January 10, 2002
plus  increases  in real estate taxes and building  operating  expenses.  At its
option, the Company has the right to renew the lease for an additional five year
period. Rent expense for the six months ended December 31, 1998 and 1997 on this
lease was approximately $230,000 and $202,000, respectively.

Other Lease Commitments - The Company leases warehouse equipment for a five year
period providing for an annual rental of $15,847 and office equipment for a five
year period providing for an annual rental of $8,365.

The Company leases automobiles under  non-cancelable  operating lease agreements
which expire through 2001.

                                       11

<PAGE>



CHEM INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #6
[UNAUDITED]
------------------------------------------------------------------------------



[9] Commitments and Contingencies [Continued]

Other  Lease  Commitments  [Continued]  -  The  minimum  rental  commitment  for
long-term non-cancelable leases is as follows:

                                              Related
                                 Lease      Party Lease
December 31,                  Commitment    Commitment       Total

   1999                       $   53,382     $ 346,000    $  399,382
   2000                           35,935       346,000       381,935
   2001                           24,212       346,000       370,212
   2002                            7,594         9,609        17,203
   2003                               --            --            --
   Thereafter                         --            --            --
                              ----------     ---------    ----------

   Total                      $  121,123     $1,047,609   $1,168,732
   -----                      ==========     ==========   ==========

Total rent expense,  including real estate taxes and  maintenance  charges,  was
approximately  $270,000 and $260,000 for the six months ended  December 31, 1998
and 1997,  respectively.  Rent  expense  is  stated  net of  sublease  income of
approximately $13,000 and $11,000 for the six months ended December 31, 1998 and
1997, respectively.

[B] Employment  Agreements - Effective  July 1, 1996,  the Company  entered into
three year  employment  agreements  with its president  and four other  officers
which provide for aggregate annual salaries of $580,000 for the year ending June
30,  1997,   and  $680,000  for  the  years  ending  June  30,  1998  and  1999,
respectively. These agreements are subject to annual increases equal to at least
the increase in the consumer price index for the Northeastern area.

[C]  Investment in and Royalties  Receivable  from Martin Health Care  Products,
Inc. - On February  10,  1998,  the  Company  signed an  exclusive  manufacturer
agreement  with Martin  Health Care  Products,  Inc. to provide to Martin Health
Care certain  products for a ten year period.  In connection with the agreement,
the Company also agreed to forgive from Martin Health Care outstanding  invoices
totaling  $22,000.  In return for the  forgiveness,  Martin agreed to pay to the
Company a  royalty  on sales of  certain  products  and to issue to the  Company
15,000 shares of common stock in Martin Health Care  Products,  Inc. The Company
has  recorded  the cost for the  common  stock at $1,000  and has  recorded  the
royalties as a  non-current  asset in the amount of $21,000.  No royalties  have
been paid as of December 31, 1998.

[D]  Litigation  - The  Company  is unable to  predict  its  ultimate  financial
exposure  with  respect  to its prior sale of  certain  products  which may have
contained  allegedly  contaminated  Tryptophan  which is the subject of numerous
lawsuits against unrelated manufacturers, distributors, suppliers, importers and
retailers of that product.  However,  management does not presently  believe the
outcome of these actions will have a material adverse effect on the Company.

On July 7, 1997, the Company was informed by one of its suppliers of a recall of
the supplier's raw material which was used in  manufacturing  of tablets sold by
the Company.  On July 17, 1997, the Company  issued a voluntary  recall to three
customers  affected by this and,  accordingly,  reduced  its sales and  accounts
receivable at June 30, 1997 by $127,000. The Company believes they have recourse
against the  supplier  for the full value of the  tablets  sold  containing  the
recalled  raw  material.  The  Company  does  not  believe  there  will  be  any
significant additional costs relating to this recall. On September 30, 1997, the
Company instituted suit to recover all damages. The case continues in settlement
negotiations,  whereby,  no estimate  can be made as to the  amount,  if any, of
ultimate recovery.

                                       12

<PAGE>



CHEM INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #7
[UNAUDITED]
------------------------------------------------------------------------------



[9] Commitments and Contingencies [Continued]

[E] Consulting Agreements - The Company entered into a consulting agreement with
a financial  advisory group  ["Consultants"]  commencing on March 20, 1998 until
February 28, 1999. The Company is obligated to pay $2,500 for services  rendered
at the end of each month that  services  are  provided  during the terms of this
agreement.  In addition, the Company has issued to the Consultants three options
for 45,000 shares of common stock.  Each option is exercisable for 15,000 shares
at exercise prices of $1.125, $2.50 and $4.00,  respectively.  These options are
exercisable until March 20, 2003.

[F]  Development  and Supply  Agreement - On April 9,1998,  the Company signed a
development and supply agreement with Herbalife  International of America,  Inc.
["Herbalife"]  whereby the Company will develop,  manufacture and supply certain
nutritional products to Herbalife through December 31, 2000.

[G]  Manufacturing  Agreement  - On February  14,  1998,  the  Company  signed a
manufacturing agreement with Pilon International,  PLC., a company that supplies
Zepter  International,   a  world-wide  direct  sales  distributor  of  consumer
products.  The Company will manufacture and develop dietary  supplements through
the year 2001.

[10] Related Party Transactions

During the year ended June 30,  1997,  the  Company  entered  into a  consulting
agreement with the brother of the Company's  president on a month to month basis
for $1,100 per month.  The total  consulting  expense  recorded  per this verbal
agreement  for the six months ended  December 31, 1998 and 1997,  by the Company
was $6,600 and $6,000, respectively.

[11] Fair Value of Financial Instruments

Generally  accepted  accounting  principles require disclosing the fair value of
financial  instruments to the extent practicable for financial instruments which
are  recognized  or  unrecognized  in the balance  sheet.  The fair value of the
financial instruments disclosed herein is not necessarily  representative of the
amount  that  could be  realized  or  settled,  nor does the fair  value  amount
consider the tax consequences of realization or settlement.

In assessing the fair value of financial instruments, the Company uses a variety
of methods and  assumptions,  which are based on estimates of market  conditions
and risks existing at the time. For certain instruments, including cash and cash
equivalents,  accounts  receivable,  notes  receivable,  accounts  payable,  and
accrued  expenses,  it was estimated that the carrying amount  approximated fair
value because of the short maturities of these instruments.  Short-term debt and
long-term debt  including  long-term debt to a related party is based on current
rates at which the Company could borrow funds with similar remaining  maturities
and approximates fair value.



                                       13

<PAGE>



CHEM INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #8
[UNAUDITED]
------------------------------------------------------------------------------



[12] New Authoritative Pronouncements

The FASB has issued SFAS No. 130,  "Reporting  Comprehensive  Income." SFAS
No. 130 is  effective  for fiscal  years  beginning  after  December  15,  1997.
Reclassification  of  financial  statements  for earlier  periods  provided  for
comparative purposes is required. The Company adopted SFAS No. 130 as of July 1,
1998. SFAS No. 130 does not have a material impact on the Company.

The FASB has  issued  SFAS  No.  131,  "Disclosures  About  Segments  of an
Enterprise and Related Information." SFAS No. 131 changes how operating segments
are  reported in annual  financial  statements  and  requires  the  reporting of
selected  information  about  operating  segments in interim  financial  reports
issued to shareholders.  SFAS No. 131 was effective for periods  beginning after
December  15,  1997,  and  comparative  information  for earlier  years is to be
restated.  SFAS No. 131 does not apply to interim  financial  statements  in the
initial year of its application. SFAS No. 131 does not have a material impact on
the Company.

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities."  SFAS No. 133  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts and for hedging activities. SFAS No. 133
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities in the statement of financial position and measure those instruments
at fair value.  The  accounting  for  changes in the fair value of a  derivative
depends on the intended use of the  derivative  and how it its  designated,  for
example, gain or losses related to changes in the fair value of a derivative not
designated  as a hedging  instrument  is recognized in earnings in the period of
the  change,  while  certain  types of hedges  may be  initially  reported  as a
component  of  other   comprehensive   income   [outside   earnings]  until  the
consummation of the underlying transaction.

SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning
after June 15,  1999.  Initial  application  of SFAS No. 133 should be as of the
beginning  of a fiscal  quarter;  on that date,  hedging  relationships  must be
designated  anew and  documented  pursuant  to the  provisions  of SFAS No. 133.
Earlier application of all of the provisions of SFAS No. 133 is encouraged,  but
it is permitted only as of the beginning of any fiscal quarter.  SFAS No. 133 is
not to be applied  retroactively to financial  statements of prior periods.  The
Company does not currently have any derivative  instruments and is not currently
engaged in any hedging activities.

[13] Equity Transactions

[A] Incentive  Stock Options - On October 7, 1998, the Company  granted  219,998
incentive stock options for a term of ten years commencing on October 7, 1998 to
its officers at the exercise  price of $1.50 per share and 60,606 shares at 110%
of the exercise price for a term of five years commencing on October 7, 1998. No
options have been exercised as of December 31, 1998.

[B]  Non-Statutory  Options - On October 7, 1998,  the  Company  granted  40,000
non-statutory  stock options to the members of its Scientific  Advisory Board at
the  exercise  price of $1.50 per share  for a term of ten years  commencing  on
October 7, 1998. No options have been exercised as of December 31, 1998.



                        . . . . . . . . . . . . . . . . .

                                       14

<PAGE>



Item 2.

CHEM INTERNATIONAL, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------




The  following  discussion  should be read in  conjunction  with the  historical
information of the Company and notes thereto.

Six months ended December 31, 1998 Compared to December 31, 1997

Results of Operations

The  Company's  net losses for the six months  ended  December 31, 1998 and 1997
were  $(1,380,901)  and $(388,388),  respectively.  This increase in net loss of
approximately  $990,000  is  primarily  the  result of a  $970,000  increase  in
operating loss resulting from a corresponding  $600,000 decrease in gross profit
and a $370,000 increase in selling and administrative  expenses. The decrease in
gross  profit is due to an  increase  in  manufacturing  expenses as the Company
hired  additional  direct labor and  increased  its  production  capacity in the
fourth  quarter of fiscal 1998 in  anticipation  of  increased  orders.  Product
launches  expected  during the six months  ended  December  31,  1998 in eastern
Europe have been delayed because of the  uncertainties in the European  markets.
The Company cannot anticipate when these product launches will eventually occur.

Sales for the six months ended  December 31, 1998 and 1997 were  $5,063,494  and
$4,970,100, respectively, an increase of $93,394 or 2%. For the six months ended
December 31, 1998, the Company had sales to one customer,  who accounted for 40%
of net sales in the six month period ended  December 31, 1998 and 45% in the six
month period ended  December 31, 1997.  The loss of this customer  would have an
adverse affect on the Company's operations. The Company is continually trying to
reduce its  dependency  on any one customer and  diversifying  its customer base
with the development new product lines and increasing its contract sales.

Retail and mail order sales for the six months  ended  December 31, 1998 totaled
$367,495 as compared to $549,679 for the six months  ended  December 31, 1997, a
decrease of $182,184 or 33% due  primarily to the closing of the retail store on
November 13, 1998 for approximately 9 weeks for renovations.  The store reopened
on January 7,1999. The Company anticipates retail and mail order sales returning
to their fiscal 1998 levels,

On February 17, 1997,  the Company  signed a  distribution  agreement with Roche
Vitamins,  Inc. to service  and supply  Roche  products  to a select  segment of
Roche's food, nutrition and cosmetic accounts. The agreement has initial term of
two years and shall be renewable  for an additional  term of one year each.  The
Company  expects to renew the agreement  for the coming year.  Sales for the six
months  ended  December  31, 1998 were  $654,777 as  compared  to  $537,272,  an
increase of $117,505 or 22%.

Cost of sales increased to $4,910,204 for the six months ended December 31, 1998
as compared to $4,214,693  for the six months ended  December 31, 1997.  Cost of
sales  increased  as a  percentage  of  sales  to 97% for the six  months  ended
December  31, 1998 from 85% for the six months  ended  December  31,  1997.  The
increase in cost of sales is due to an increase in manufacturing costs and fixed
overhead costs.

Selling and  administrative  expenses for the six months ended December 31, 1998
were $1,684,299  versus  $1,315,725 for the same period a year ago. The increase
of  $368,574  was  primarily  attributable  to the  writeoff  of the  balance of
goodwill  at December  31, 1998 of  $275,891,  an  increase  in  advertising  of
approximately $44,000 over the comparative period last year as the Company tries
to generate new sales and  customers,  including  hiring a consulting  group and
signing a  professional  services  contract  with Allan  Houston of the New York
Knicks to be the Company's spokesman for its Vitality Medicine line of products.
There  was also an  increase  in  professional  fees of  approximately  $33,000.
Selling and  administrative  expenses have stabilized at approximately  $700,000
per quarter.

                                       15

<PAGE>



CHEM INTERNATIONAL, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Six months ended December 31, 1998 Compared to December 31, 1997

Results of Operations

Other income  [expense] was $(65,671) for the six months ended December 31, 1998
as compared to  $(13,546)  for the six months  ended  December  31,  1997.  This
increase  in net expense of $52,125 is  attributable  to an increase in interest
expense of $38,038 due to an increase in borrowings  under the Company's line of
credit,  a decrease in interest and investment  income of $19,087 and a decrease
in a partnership loss of $5,000.

On July 7, 1997, the Company was informed by one of its suppliers of a recall of
the supplier's raw material which was used in  manufacturing  of tablets sold by
the Company.  On July 17, 1997, the Company  issued a voluntary  recall to three
customers  affected by this,  and  accordingly,  reduced its sales and  accounts
receivable  at June 30,  1997 by $  127,000.  The  Company  believes  they  have
recourse  against the supplier for the full value of the tablets sold containing
the  recalled  material.  The Company  does not  believe  that there will be any
significant  additional costs relating to this recall. On September 30, 1997 the
Company  instituted  suit to recover all  damages.  The case is currently in the
discovery  stage.  The Company expects that the case will proceed to non-binding
arbitration in February 1999. No estimate can be made at December 31, 1998 as to
the amount,  if any, of ultimate  recovery.  The case  continues  in  settlement
negotiations,  whereby,  no estimate  can be made as to the  amount,  if any, of
ultimate recovery.

Three months ended December 31, 1998 Compared to the Three months ended December
31, 1997

The Company's  net losses for the three months ended  December 31, 1998 and 1997
were  $(958,150)  and  $(206,086),  respectively.  This  increase in net loss of
approximately  $750,000 is primarily the result of an increase in operating loss
of $370,000 as sales were  uneven  from month to month and  overhead  costs were
fixed, the writeoff of goodwill,  and a decrease in Federal and state income tax
benefits of approximately $ 90,000.  The increase in operating loss results from
a corresponding $364,000 decrease in gross profit.

Sales for the three months ended December 31, 1998 and 1997 were  $2,839,762 and
$2,618,510,  respectively  an increase  of $221,252 or 8%. For the three  months
ended  December 31, 1998 the Company had sales to one customer who accounted for
36% of net sales in 1998 and 50% in 1997.

Retail and mail order sales for the three months ended December 31, 1998 totaled
$169,376 as compared to $275,930 for the three months ended December 31, 1997, a
decrease of $106,554 or 39% due to the store being  closed for  renovations  for
approximately 7 weeks.

Sales under the Roche Vitamins, Inc. distribution agreement totaled $344,756 for
the three months  ended  December 31, 1998 as compared to $262,140 for the three
months ended December 31, 1997 an increase of $82,616 or 32%.

Cost of sales  increased to $2,777,609  for the three months ended  December 31,
1998 as compared to  $2,192,211  for the three months  ended  December 31, 1997.
Cost of sales  increased as a percentage  of sales to 98% as compared to 84% for
the three months ended  December 31, 1997.  The increase in cost of sales is due
to an increase in manufacturing expenses, including fixed overhead costs.

Selling and administrative expenses for the three months ended December 31, 1998
were  $1,001,359 as compared to $719,619 for the three months ended December 31,
1997, an increase of $281,740 due primarily to the writeoff of goodwill. Selling
and  administrative  expenses  have  stabilized  at  approximately  $700,000 per
quarter.

                                       16

<PAGE>



CHEM INTERNATIONAL, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Three months ended December 31, 1998 Compared to the Three months ended December
31, 1997

Other income  [expense] was  $(34,538)  for the three months ended  December 31,
1998 as compared to $(15,462) for the three months ended December 31, 1997. This
increase  in net expense of $19,076 is  attributable  to an increase in interest
expense of $17,885, a decrease of interest and investment income of $2,688 and a
decrease in partnership loss of $1,497.

Liquidity and Capital Resources

At December 31, 1998 the Company's  working capital was $3,644,726 a decrease of
$1,116,785 over working capital at June 30, 1998. Cash and cash equivalents were
$388,366 at December  31, 1998 a decrease of $568,037  from June 30,  1998.  The
Company  utilized  $552,627 and $494,143 for operations for the six months ended
December 31, 1998.

The primary  reasons for the cash  utilized  for  operations  for the six months
ended  December  31,  1998  are  (a)  a  decrease  in  accounts   receivable  of
approximately  $1,440,000,  (b) an  increase  in  inventories  of  approximately
$377,000,  (c) an increase in refundable income taxes of approximately  $200,000
and (d) a decrease in accounts  payable of approximately  $550,000.  The Company
believes that the anticipated  sales for the third and fourth quarters of fiscal
1999  including  retail and mail order sales and new  product  lines with higher
gross profit margins, will improve the cash needs for operations in the next six
months.  The Company  has drawn down its entire line of credit and  consequently
will be looking for additional sources of financing to meet its liquidity needs.

The Company utilized  $178,384 and $109,475 in investing  activities for the six
months ended December 31, 1998 and 1997, respectively. The Company generated net
cash of  $162,974  from  debt  financing  activities  for the six  months  ended
December  31, 1998 and  utilized  $24,798 in  financing  activities  for the six
months ended December 31, 1997.

The Company has a $500,000  revolving line of credit agreement with a bank which
bears  interest at 1.0% above the bank's prime  lending rate and expires on July
27,  1999.  At December  31, 1998 the  balance due under the  revolving  line of
credit was $500,000.  The Company has additionally secured a five year equipment
term loan with interest at 1.5% above the bank's prime lending rate. At December
31, 1998 the balance due under the equipment loan was $155,833.  The Company was
not in  compliance  with its debt  coverage  ratio  on a  consolidated  basis at
December 31, 1998.

The Company's  total annual  commitments  at December 31, 1998 for the next five
years  of  $1,168,732   consists  of  obligations  under  operating  leases  for
facilities and lease  agreements for the rental of warehouse  equipment,  office
equipment and automobiles.

Effective July 1, 1996, the Company entered into employment agreements with each
of its five  executive  officers  providing  for aggregate  compensation  in the
amount of $680,000 for the fiscal year ending June 30, 1999.

                                       17

<PAGE>



CHEM INTERNATIONAL, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Liquidity and Capital Resources [Continued]

The Company expects to spend  approximately  $55,000 through 1999 to modify it's
computer information systems enabling proper processing of transactions relating
to the year 2000 ["Y2K"] and beyond.  The Company installed a new network system
in  October  of 1998 at a cost  of  approximately  $20,000  whose  hardware  and
software is Y2K compliant. The Company has contracted with a computer consulting
firm to provide  the  necessary  upgrades  and  modifications  to the  Company's
existing  manufacturing program to insure Y2K compliance.  The total cost of the
upgrades is approximately  $33,000 and should be completed by June 30, 1999. The
Company's  suppliers and vendors have been  contacted,  and most have  responded
with  their  intent to be Y2K  compliant  by the year 2000.  At this  time,  the
Company believes, based on their responses,  that there will be no disruption of
their business.  The Company does not expect the amounts required to be expended
over the next twelve months to have a material effect on its financial  position
or results of  operations.  The amount  expended  as of  December  31,  1998 was
$20,543.

New Authoritative Pronouncements

The FASB has issued SFAS No. 130,  "Reporting  Comprehensive  Income." SFAS
No. 130 is  effective  for fiscal  years  beginning  after  December  15,  1997.
Reclassification  of  financial  statements  for earlier  periods  provided  for
comparative purposes is required. The Company adopted SFAS No. 130 as of July 1,
1998. SFAS No. 130 does not have a material impact on the Company.

The FASB has  issued  SFAS  No.  131,  "Disclosures  About  Segments  of an
Enterprise and Related Information." SFAS No. 131 changes how operating segments
are  reported in annual  financial  statements  and  requires  the  reporting of
selected  information  about  operating  segments in interim  financial  reports
issued to shareholders.  SFAS No. 131 was effective for periods  beginning after
December  15,  1997,  and  comparative  information  for earlier  years is to be
restated.  SFAS No. 131 does not apply to interim  financial  statements  in the
initial year of its application. SFAS No. 131 does not have a material impact on
the Company.

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities."  SFAS No. 133  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts and for hedging activities. SFAS No. 133
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities in the statement of financial position and measure those instruments
at fair value.  The  accounting  for  changes in the fair value of a  derivative
depends on the intended use of the  derivative  and how it its  designated,  for
example, gain or losses related to changes in the fair value of a derivative not
designated  as a hedging  instrument  is recognized in earnings in the period of
the  change,  while  certain  types of hedges  may be  initially  reported  as a
component  of  other   comprehensive   income   [outside   earnings]  until  the
consummation of the underlying transaction.

SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning
after June 15,  1999.  Initial  application  of SFAS No. 133 should be as of the
beginning  of a fiscal  quarter;  on that date,  hedging  relationships  must be
designated  anew and  documented  pursuant  to the  provisions  of SFAS No. 133.
Earlier application of all of the provisions of SFAS No. 133 is encouraged,  but
it is permitted only as of the beginning of any fiscal quarter.  SFAS No. 133 is
not to be applied  retroactively to financial  statements of prior periods.  The
Company does not currently have any derivative  instruments and is not currently
engaged in any hedging activities.

Impact of Inflation

The Company  does not believe  that  inflation  has  significantly  affected its
results of operations.

                                       18

<PAGE>



Part II: Other Information

CHEM INTERNATIONAL, INC.
------------------------------------------------------------------------------



Item 1:  Legal Proceeding

            None

Item 2:  Changes in Securities

            None

Item 3:  Defaults Upon Senior Securities

            None

Item 4:  Submission of Matters to a Vote of Security Holders

            None

Item 5:  Other Information

            None

Item 6:  Exhibits and Reports on Form 8K

            None

                                       19

<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.

                                   CHEM INTERNATIONAL, INC.

Date:  February 10, 1999           By:/s/ E. Gerald Kay                      
                                      E. Gerald Kay,
                                       President and Chief Executive Officer

Date:  February 10, 1999           By:/s/ Eric Friedman                      
                                      Eric Friedman,
                                       Chief Financial Officer

                                       20

<PAGE>