UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q


(X)    QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
       EXCHANGE ACT OF 1934.

       For the quarterly period ended       June 30, 2002
                                            --------------

                                       OR

( )    THE 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 01-21617

                             THE QUIGLEY CORPORATION
                             -----------------------
             (Exact name of registrant as specified in its charter)


            Nevada                                       23-2577138
--------------------------------------------------------------------------------
(State or other  jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)


              (MAILING ADDRESS: PO Box 1349, Doylestown, PA 18901.)

          Kells Building, 621 Shady Retreat Road, Doylestown, PA 18901
          ------------------------------------------------------------
          (Address of principle executive offices)           (Zip Code)


       Registrant's telephone number, including area code: (215) 345-0919
       ------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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

Indicate  the  number of shares  outstanding  of each of the  issuer's  class of
Common  Stock,  as  of  the  latest  practicable  date.  The  number  of  shares
outstanding of each of the registrant's  classes of Common Stock, as of July 30,
2002, was 11,456,617 all of one class of $.0005 par value Common Stock.






                                TABLE OF CONTENTS

                                                                        Page No.

   PART I - Financial information

Item 1.     Consolidated Financial Statements                               3-18

Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of Operations                  19-23

Item 3.     Quantitative and Qualitative Disclosure About
            Market Risk                                                     23


   PART II - Other Information

Item 1.     Legal Proceedings                                               24

Item 2.     Changes in Securities                                           25

Item 3.     Defaults Upon Senior Securities                                 25

Item 4.     Submission of Matters to a
            Vote of Security Holders                                        25

Item 5.     Other Information                                               25

Item 6.     Exhibits and Reports on Form 8-K                                25

Signatures                                                                  26

                                       2




ITEM 1:  FINANCIAL INFORMATION


                             THE QUIGLEY CORPORATION
                           CONSOLIDATED BALANCE SHEETS



                  ASSETS                                                         June 30, 2002  December 31, 2001
                                                                                  (unaudited)
                                                                                 -------------  -----------------

CURRENT ASSETS:

    Cash and cash equivalents                                                   $ 12,839,166    $  9,740,840
    Accounts receivable - net of doubtful accounts of $736,486 and $719,310        1,784,407       4,425,291
    Inventory                                                                      6,620,129       6,507,746
    Prepaid expenses and other current assets                                        850,703       1,507,462
                                                                                ------------    ------------
       TOTAL CURRENT ASSETS                                                       22,094,405      22,181,339
                                                                                ------------    ------------

PROPERTY, PLANT AND EQUIPMENT - net                                                2,296,295       2,201,309
                                                                                ------------    ------------

OTHER ASSETS:

    Patent rights - net of accumulated amortization                                     --            21,940
    Excess of cost over net assets acquired - net of accumulated amortization        327,014         327,014
    Other assets                                                                      25,800          24,193
                                                                                ------------    ------------
       TOTAL OTHER ASSETS                                                            352,814         373,147
                                                                                ------------    ------------

TOTAL ASSETS                                                                    $ 24,743,514    $ 24,755,795
                                                                                ============    ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

    Accounts payable                                                            $    913,147    $    911,813
    Accrued royalties and sales commissions                                          466,592       1,005,594
    Accrued advertising                                                              234,517         668,792
    Other current liabilities                                                      1,402,971         969,321
                                                                                ------------    ------------
       TOTAL CURRENT LIABILITIES                                                   3,017,227       3,555,520
                                                                                ------------    ------------

COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST IN CONSOLIDATED AFFILIATES

STOCKHOLDERS' EQUITY:

    Common stock, $.0005 par value; authorized 50,000,000 shares;
      Issued:  16,102,670 and 15,321,206 shares                                        8,051           7,661
    Additional paid-in-capital                                                    32,592,222      28,915,612
    Retained earnings                                                             14,314,173      17,465,161
    Less: Treasury stock, 4,646,053 shares and 4,646,053 shares, at cost         (25,188,159)    (25,188,159)
                                                                                ------------    ------------
       TOTAL STOCKHOLDERS' EQUITY                                                 21,726,287      21,200,275
                                                                                ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $ 24,743,514    $ 24,755,795
                                                                                ============    ============

                 See accompanying notes to financial statements

                                       3




                             THE QUIGLEY CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                            Three Months Ended                 Six Months Ended
                                       June 30, 2002    June 30,  2001  June 30, 2002   June 30,  2001
                                       -------------    --------------  -------------   --------------

SALES:
  Sales                                 $  5,872,027    $  3,381,951    $ 11,646,072    $  8,580,488
  Co-operative advertising promotions        142,954          66,232         407,594         559,301
                                        ------------    ------------    ------------    ------------

NET SALES                                  5,729,073       3,315,719      11,238,478       8,021,187

LICENSING FEES                                  --         1,273,864         148,866       1,273,864
                                        ------------    ------------    ------------    ------------

TOTAL REVENUE                              5,729,073       4,589,583      11,387,344       9,295,051
                                        ------------    ------------    ------------    ------------

COST OF SALES                              3,618,080       1,774,606       6,361,665       3,655,255
                                        ------------    ------------    ------------    ------------

GROSS PROFIT                               2,110,993       2,814,977       5,025,679       5,639,796
                                        ------------    ------------    ------------    ------------


OPERATING EXPENSES:
  Sales and marketing                      1,048,573       1,029,158       2,373,801       2,374,480
  Administration                           1,929,751       2,381,700       4,653,950       4,168,866
  Research and development                   620,517         275,499       1,231,401         523,032
                                        ------------    ------------    ------------    ------------
TOTAL OPERATING EXPENSES                   3,598,841       3,686,357       8,259,152       7,066,378
                                        ------------    ------------    ------------    ------------

LOSS FROM OPERATIONS                      (1,487,848)       (871,380)     (3,233,473)     (1,426,582)

INTEREST and OTHER INCOME                     37,628         119,307          82,485         271,478
                                        ------------    ------------    ------------    ------------

LOSS BEFORE TAXES                         (1,450,220)       (752,073)     (3,150,988)     (1,155,104)
                                        ------------    ------------    ------------    ------------

INCOME TAXES                                    --              --              --              --

MINORITY INTEREST IN LOSS
 OF CONSOLIDATED AFFILIATE                      --            71,630            --            71,752
                                        ------------    ------------    ------------    ------------

NET LOSS                                ($ 1,450,220)   ($   680,443)   ($ 3,150,988)   ($ 1,083,352)
                                        ============    ============    ============    ============

Per common share:

   Basic                                ($      0.13)   ($      0.06)   ($      0.29)   ($      0.10)
                                        ============    ============    ============    ============

   Diluted                              ($      0.13)   ($      0.06)   ($      0.29)   ($      0.10)
                                        ============    ============    ============    ============

Weighted average common shares
outstanding:

   Basic                                  10,964,597      10,675,153      10,823,291      10,675,153
                                        ============    ============    ============    ============

   Diluted                                10,964,597      10,675,153      10,823,291      10,675,153
                                        ============    ============    ============    ============


                 See accompanying notes to financial statements

                                       4




                             THE QUIGLEY CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONDENSED)
                                   (Unaudited)

                                                                   Six Months Ended
                                                            June 30, 2002    June 30, 2001
                                                            -------------   --------------

NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES   $    128,843    ($ 2,204,065)
                                                            ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures                                           (280,517)       (307,983)
 Net cost of assets acquired                                        --          (128,493)
                                                            ------------   ------------

 NET CASH USED IN INVESTING ACTIVITIES                          (280,517)       (436,476)
                                                            ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from exercises of options and warrants               3,250,000            --
 Repurchase of Common Stock                                         --           (30,131)
                                                            ------------    ------------
 NET CASH FLOWS FROM FINANCING ACTIVITIES                      3,250,000         (30,131)
                                                            ------------    ------------

 NET INCREASE/(DECREASE) IN CASH                               3,098,326      (2,670,672)

CASH & CASH EQUIVALENTS, BEGINNING OF  PERIOD              9,740,840      11,365,843
                                                            ------------    ------------
CASH & CASH EQUIVALENTS, END OF  PERIOD                 $ 12,839,166     $ 8,695,171
                                                            ============    ============

                 See accompanying notes to financial statements

                                       5




                             THE QUIGLEY CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND BUSINESS

The Quigley  Corporation (the "Company"),  organized under the laws of the state
of Nevada, is engaged in the development, manufacturing, and marketing of health
and homeopathic  products that are being offered to the general public.  For the
fiscal periods  presented,  the majority of the Company's revenues come from the
Company's  proprietary  "Cold-Eeze(R)"  products  and the  Health  and  Wellness
business segment.

Darius International Inc., a wholly owned subsidiary of The Quigley Corporation,
was formed in January 2000 to introduce new products to the marketplace  through
a network of independent  distributors.  Darius is a direct selling organization
specializing  in  proprietary  health and  wellness  products,  which  commenced
shipping product to customers in the third quarter of 2000.

Effective  July 1,  2000,  The  Quigley  Corporation  acquired  a 60%  ownership
position in Caribbean Pacific Natural Products,  Inc. an Orlando,  Florida-based
company.  Caribbean  Pacific Natural  Products,  Inc. is a leading developer and
marketer of all-natural sun-care and skincare products for luxury resorts, theme
parks and spas.

The  formation  of Darius  International  Inc.,  and the  majority  ownership in
Caribbean Pacific Natural Products, Inc., provide diversification to the Company
in both the method of product  distribution  and the  broader  range of products
available to the marketplace.

In January 2001, the Company formed an Ethical  Pharmaceutical Unit which is now
Quigley Pharma Inc., a wholly-owned subsidiary of the Company, that is under the
direction of its Executive Vice  President and Chairman of its Medical  Advisory
Committee.  The formation of the Company's Ethical  Pharmaceutical  Unit follows
the Patent  Office of The  United  States  Commerce  Department  confirming  the
assignment  to  the  Company  of  a  Patent  Application  for  the  "Method  and
Composition  for the Topical  Treatment  of Diabetic  Neuropathy."  In September
2001,  the Patent  Office  confirmed  the  assignment to the Company of a Patent
Application  entitled the  "Medicinal  Composition  and Method of Using it" (for
Treatment of  Sialorrhea  and other  Disorders)  for a  prescription  product to
relieve  sialorrhea  (drooling) in patients  suffering from Amyotrophic  Lateral
Sclerosis (ALS),  otherwise known as Lou Gehrig's Disease. In November 2001, the
Company was assigned a Patent Application  entitled  "Composition and Method for
Prevention,  Reduction  and Treatment of Radiation  Dermatitis"  with the Patent
Office  of  The  United  States  Commerce  Department.  The  establishment  of a
dedicated  pharmaceutical  subsidiary  will enable the Company to diversify into
the  prescription  drug market and to ensure safe and effective  distribution of
these important potential new products currently under development.

Cold Remedy Products
--------------------

Cold-Eeze(R),  a zinc  gluconate  glycine  formulation  (ZIGG(TM))  is  sold  in
lozenge,  bubble gum and  sugar-free  tablet  forms.  In May 1992,  the  Company
entered into an exclusive agreement for worldwide representation, manufacturing,

                                       6





marketing  and  distribution   rights  to  a  zinc  gluconate   glycine  lozenge
formulation  which was patented in the United States,  United  Kingdom,  Sweden,
France,  Italy,  Canada,  Germany,  and is  pending  in Japan.  This  product is
presently being marketed by the Company and also through independent brokers and
marketers in the United States under the trade names Cold-Eeze(R),  Cold-Eeze(R)
Sugar  Free,  and  Cold-Eeze(R)  Bubble  Gum and in Canada  under the trade name
Zigg-Eeze(TM).

In 1996, the Company also acquired an exclusive  license to a zinc gluconate use
patent,  thereby  assuring  the Company  exclusivity  in the  manufacturing  and
marketing of zinc gluconate glycine lozenge formulated cold relief products.

In April 2002,  the Company was  assigned a Patent  Application  which was filed
with the Patent Office of the United States  Commerce  Department for the use of
Cold-Eeze(R) as a prophylactic for cold prevention.  The new patent  application
follows the results of an adolescent  study at the Heritage  School  facility in
Provo,  Utah, that found that the use of Cold-Eeze(R) is effective in preventing
a cold,  reduces the use of antibiotics and confirmed that Cold-Eeze(R)  reduces
the median duration of a cold by four days.

In the second half of 1998, the Company  launched  Cold-Eeze(R)  in a sugar free
version of the product to benefit  diabetics and other consumers  concerned with
their sugar intake.  Late in the fourth quarter of 1998, the Company  launched a
bubble gum version of Cold-Eeze(R).

Under a Food and Drug Administration  ("FDA") approved  Investigational New Drug
Application,   filed   by   Dartmouth   College,   a   randomized   double-blind
placebo-controlled  study,  conducted  at Dartmouth  College of Health  Science,
Hanover,  New  Hampshire,  concluded  that the  lozenge  formulation  treatment,
initiated within 48 hours of symptom onset,  resulted in a significant reduction
in the total duration of the common cold.

On May 22, 1992,  ZINC AND THE COMMON COLD, A  CONTROLLED  CLINICAL  STUDY,  was
published in England, in the "Journal of International Medical Research", Volume
20, Number 3, Pages 234-246. According to this publication,  (a) flavorings used
in  other  Zinc  lozenge  products  (citrate,   tartrate,   separate,   orotate,
picolinate,  mannitol or sorbitol)  render the Zinc inactive and  unavailable to
the patient's nasal passages,  mouth and throat,  where cold symptoms have to be
treated, (b) this patented  pleasant-tasting  formulation delivers approximately
93% of the active Zinc to the mucosal  surfaces and (c) the patient has the same
sequence of symptoms as in the absence of treatment, but goes through the phases
at an accelerated rate and with reduced symptom severity.

On July 15, 1996,  results of a new randomized  double-blind  placebo-controlled
study on the common cold were published, which commenced at the Cleveland Clinic
Foundation  on October 3, 1994.  The study called "Zinc  Gluconate  Lozenges for
Treating the Common Cold" was  completed and published in the Annals of Internal
Medicine - Vol. 125 No. 2. Using a 13.3mg  lozenge  (almost half the strength of
the  lozenge  used in the  Dartmouth  Study),  the  result  still  showed  a 42%
reduction in the duration of the common cold symptoms.

In April 2002, the Company announced the statistical  results of a retrospective
clinical  study that suggests that  Cold-Eeze(R)  is also an effective  means of
preventing  the common cold.  This  adolescent  study  indicated that when taken
daily,  Cold-Eeze(R)  statistically  lessens  the number of colds an  individual
suffers per year,  reducing the median from 1.5 to zero.  These findings are the
result of analyzing three years of clinical data at the Heritage School facility
in Provo,  Utah.  The study also found that the use of  Cold-Eeze(R)  to treat a
cold statistically reduces the use of antibiotics for respiratory illnesses from
39.3% to 3.0%  when  Cold-Eeze(R)  is  administered  as a first  line  treatment
approach to the common cold.  Additionally,  the study  reinforces  the original
clinical trials,  concluding that Cold-Eeze(R)  reduces the median duration of a
cold by four days.

The business of the Company is subject to federal and state laws and regulations
adopted  for  the  health  and  safety  of  users  of  the  Company's  products.
Cold-Eeze(R)  is a homeopathic  remedy that is subject to regulations by various
federal,  state  and  local  agencies,  including  the FDA  and the  Homeopathic
Pharmacopoeia of the United States.

The Company competes with suppliers varying in range and size in the cold remedy
products  arena.  Cold-Eeze(R),  which  has  been  clinically  proven,  offers a
significant  advantage over other suppliers in the over-the-counter  cold remedy
market.  The  management  of the  Company  believes  there  should  be no future
impediment on the ability to compete in the marketplace now, or in the immediate
future,  since factors concerning the product,  such as price,  product quality,
availability,  reliability, credit terms, name recognition, delivery and support
are all properly  positioned.  The Company has several  Broker,  Distributor and
Representative  Agreements,  both nationally and internationally and the product
is distributed  through numerous  independent and chain drug and discount stores
throughout the United States.

                                       7





The  Company  continues  to  use  the  resources  of  independent  national  and
international brokers complementing its own personnel to represent the Company's
over-the-counter products, thereby saving capital and other ongoing expenditures
that would otherwise be incurred.

Ethical Pharmaceutical Products
-------------------------------

The  establishment  of an  ethical  pharmaceutical  subsidiary  will  enable the
Company to diversify  into the  prescription  drug market and to ensure safe and
effective distribution of these important potential new products currently under
development.

Quigley  Pharma is currently  undergoing  research and  development  activity in
compliance with regulatory requirements. The Company is at the initial stages of
what  may be a  lengthy  process  to  develop  these  patent  applications  into
commercial products.

The formation of the Company's  Ethical  Pharmaceutical  Unit follows the Patent
Office of The United States Commerce Department confirming the assignment to the
Company of the following patent applications:

o     A Patent  Application  for the  "Method  and  Composition  for the Topical
      Treatment of Diabetic Neuropathy."

o     In September  2001,  the Patent  Office  confirmed  the  assignment to the
      Company of a Patent  Application  entitled the "Medicinal  Composition and
      Method of Using it" (for Treatment of Sialorrhea and other  Disorders) for
      a product to relieve  sialorrhea  (drooling)  in patients  suffering  from
      Amyotrophic  Lateral  Sclerosis  (ALS),  otherwise  known as Lou  Gehrig's
      Disease.

o     In November 2001, the Company was assigned a Patent  Application  entitled
      "Composition  and  Method  for  Prevention,  Reduction  and  Treatment  of
      Radiation Dermatitis" with the Patent Office of The United States Commerce
      Department.

The  pre-clinical  development,   clinical  trials,  product  manufacturing  and
marketing of Quigley Pharma's  potential new products are subject to federal and
state  regulation  in the  United  States  and other  countries.  Obtaining  FDA
regulatory  approval for these  pharmaceutical  products can require substantial
resources  and take several  years.  The length of this  process  depends on the
type,  complexity  and  novelty of the  product and the nature of the disease or
other  indications  to be  treated.  If the  Company  cannot  obtain  regulatory
approval  of these new  products  in a timely  manner,  it could have a material
effect on the business and financial condition of the Company.

In April 2002, the Company commenced a Phase II proof of concept study in France
for treatment of diabetic  neuropathy.  If the study is successful,  the Company
will apply for approval by the FDA to begin pivotal  Phase III clinical  trials.
Because  the  Company's  formulation  for relief of  diabetes-related  pain is a
topical  treatment and its  ingredients are GRAS listed  (Generally  Regarded As
Safe) as  identified  in the Code of Federal  Regulations,  FDA  approval  could
potentially be obtained within a two-year period.

In July 2002,  the Company  announced  the  commencement  of a Phase II clinical
trial on a new formulation  being developed and tested by the Company to relieve
Sialorrhea  (excess  secretions  of the salivary  glands,  causing  drooling) in
patients suffering from diseases including  Amyotrophic Lateral Sclerosis (ALS),
otherwise known as Lou Gehrig's Disease,  Cerebral Palsy,  Parkinson's  Disease,
and Muscular Dystrophy.

Health And Wellness Products
----------------------------

Darius International Inc., a wholly owned subsidiary, was formed in January 2000
for the purpose of introducing new products to the marketplace through a network
of independent  distributors.  On January 2, 2001, the Company  acquired certain
assets and assumed certain  liabilities of a privately held company  involved in
the direct marketing and distribution of health and wellness products. Darius is
a direct selling  organization  specializing in proprietary  health and wellness
products.  The  products  marketed  and sold by Darius are herbal  vitamins  and
dietary  supplements for the human condition,  in the area of health,  immunity,
energy and pain.

                                       8





Sun-care and Skincare Products
------------------------------

Caribbean Pacific Natural Products, Inc., is a leading developer and marketer of
all-natural,  eco-safe sun-care and skincare products for luxury resorts,  theme
parks and spas. Caribbean Pacific markets a line of natural protectors,  or "Sol
Cremes," that provide dual protection  against the damaging  effects of the sun,
along with various products rich in essential  nutrients and vitamins  necessary
for the skin.

Caribbean  Pacific  also  has  the  capability  to  make  available   customized
merchandise,  which complements the range of sun-care and skincare products that
it currently markets.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The Consolidated Balance Sheet at June 30, 2002, the Consolidated  Statements of
Operations  for the three and  six-months  periods ended June 30, 2002 and 2001,
and the  Consolidated  Statements of Cash Flows  (Condensed)  for the six-months
periods ended June 30, 2002 and 2001,  have been prepared  without audit. In the
opinion  of  management,   all  adjustments  necessary  to  present  fairly  the
consolidated   financial  position,   consolidated  results  of  operations  and
consolidated  cash flows,  for the periods  indicated,  have been made.  Certain
prior  period  amounts  have  been   reclassified   to  conform  with  the  2002
presentation.

All inter-company transactions and balances have been eliminated.

Effective July 1, 2000, the Company acquired a 60 percent ownership  position in
Caribbean Pacific Natural Products, Inc., which is accounted for by the purchase
method of accounting and accordingly,  the operating  results have been included
in the Company's consolidated financial Statements from the date of acquisition.
This majority  ownership  position  required a cash investment that approximated
$812,000  and  the  provision  for a $1  million  line  of  credit,  secured  by
inventory, accounts receivable and all other assets of Caribbean Pacific Natural
Products.   The  net  assets  of  Caribbean  Pacific  Natural  Products  at  the
acquisition  date  principally  consisted of a product license and  distribution
rights,  inventory and fixed assets of $312,915 and $510,000 of working  capital
with a contribution to minority interest of $329,166.

In the  past,  the 40  percent  ownership  position  representing  the  minority
interest has been  reflected in the  Consolidated  Statements of Operations  for
their  portion  of  losses,  and in the  Consolidated  Balance  Sheet  for their
ownership portion of accumulated  losses,  share of net assets and capital stock
at  acquisition  date.  At June 30, 2002,  accumulated  losses  associated  with
minority  interest have reduced minority  interest to zero on the Balance Sheet,
with excess  losses  amounting to $177,365  being  absorbed in the  Consolidated
Statement of Operations in 2002 and 2001, by the Company.

On January 2, 2001,  the Company  acquired  certain  assets and assumed  certain
liabilities of a privately held company, located in Utah, involved in the direct
marketing and  distribution of health and wellness  products.  This  acquisition
required  cash  payments  that  approximated  $110,000 and 50,000  shares of the
Company's stock issued to the former owners of the net assets acquired.  The net
assets acquired at acquisition principally consisted of intangibles,  inventory,
accounts  receivable,  bank  balances  and fixed  assets  totaling  $536,000 and
liabilities  assumed  approximating   $416,000.  Also  required  are  continuous
payments for the use of product  formulations;  consulting;  confidentiality and
non-compete  fees that are 12% on net sales  collected  until  $540,000 is paid,
then becoming 5% on net sales collected for the continuous applications of these
arrangements.  During March 2002,  the payout  level of $540,000  was  achieved,
whereupon the rate became 5%. This  acquisition is accounted for by the purchase
method of accounting and accordingly,  the operating  results have been included
in the  Company's  Consolidated  Statements  of  Operations  from  the  date  of
acquisition. The excess of cost over net assets acquired has been amortized on a
straight-line  basis over a period of 15 years.  Subsequent to 2001, the account
will only be reduced if the value becomes impaired.

PRINCIPLES OF ACCOUNTING

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and  disclosure  of  contingent  liabilities  at the  dates  of the

                                       9





financial  statements and the reported  amounts of revenues and expenses  during
the reporting periods. Actual results could differ from those estimates.

CASH EQUIVALENTS

The Company considers all highly liquid  investments with an initial maturity of
three  months  or less at the  time of  purchase  to be cash  equivalents.  Cash
equivalents  include cash on hand and monies invested in money market funds. The
carrying  amount  approximates  the  fair  market  value  due to the  short-term
maturity of these investments.

INVENTORIES

Inventories  are stated at the lower of cost or  market.  The  Company  uses the
first-in,  first-out  ("FIFO") method of determining  cost for all  inventories.
Inventories are primarily comprised of finished goods.

PROPERTY, PLANT AND EQUIPMENT

Property,  plant  and  equipment  is  recorded  at  cost.  The  Company  uses  a
combination of straight-line and accelerated  methods in computing  depreciation
for financial reporting purposes. The annual provision for depreciation has been
computed in  accordance  with the  following  ranges of  estimated  asset lives:
building and  improvements  - twenty  years;  machinery  and equipment - five to
seven years; computer software - three years; and furniture and fixtures - seven
years.

PATENT RIGHTS AND INTANGIBLES

Patent rights have been  amortized on a  straight-line  basis over the period of
the related licensing  agreements,  which  approximated 67 months.  Amortization
costs  incurred for the six months  periods  ended June 30, 2002 and 2001,  were
$21,940  and  $43,880,  respectively.  At March  31,  2002,  this item was fully
amortized.

Prior to January 1, 2002,  the excess of cost over net assets  acquired has been
subject to amortization on a straight-line basis over a period of 15 years.

In June 2001, SFAS No. 142, "Goodwill and Other Intangible Assets" was issued by
the FASB.  SFAS No. 142 changed the accounting for goodwill from an amortization
method to an  impairment-only  approach.  Amortization  of  goodwill,  including
goodwill  recorded in past business  combinations,  ceased upon adoption of this
statement. The Company implemented SFAS No. 142 on January 1, 2002.

Following the adoption of Statement 142, the amortization  expense, net loss and
earnings  per-share  of The  Quigley  Corporation  for the three  months and six
months periods ended June 30, 2002 and 2001 are as follows:


                                       Three Months Ended June 30       Six Months Ended June 30
-------------------------------------------------------------------------------------------------

                                            2002           2001         2002             2001
-------------------------------------------------------------------------------------------------

Reported net loss                       ($1,450,220)   ($680,443)   ($3,150,988)   ($  1,083,352)
Add back: Goodwill amortization                --          5,486           --             21,944
                                        -----------    ---------    -----------    -------------
Adjusted Net Loss                       ($1,450,220)   ($674,957)   ($3,150,988)   ($  1,061,408)
                                        ===========    =========    ===========    =============

Basic and Diluted earnings per share:

Reported net loss                       ($     0.13)   ($   0.06)   ($     0.29)   ($       0.10)
Goodwill amortization                          --           --             --               --
                                        -----------    ---------    -----------    -------------
Adjusted net loss - Basic               ($     0.13)   ($   0.06)   ($     0.29)   ($       0.10)
                                        ===========    =========    ===========    =============
Adjusted net loss - Diluted             ($     0.13)   ($   0.06)   ($     0.29)   ($       0.10)
                                        ===========    =========    ===========    =============

                                       10





Subsequent  to 2001,  excess of cost over net assets will only be reduced if the
value becomes impaired.

CONCENTRATION OF RISKS

Financial  instruments  that  potentially  subject  the  Company to  significant
concentrations of credit risk consist  principally of cash investments and trade
accounts receivable.

The Company  maintains  cash and cash  equivalents  with three  major  financial
institutions.  Since the  Company  maintains  amounts  in  excess of  guarantees
provided by the Federal Depository Insurance  Corporation,  the Company performs
periodic  evaluations  of  the  relative  credit  standing  of  these  financial
institutions and limits the amount of credit exposure with any one institution.

Trade accounts receivable  potentially  subjects the Company to credit risk. The
Company  extends  credit  to its  customers  based  upon  an  evaluation  of the
customer's financial condition and credit history and generally does not require
collateral.  The Company has historically  incurred  minimal credit losses.  The
Company's  broad  range of  customers  includes  many  large  wholesalers,  mass
merchandisers  and multi-outlet  pharmacy chains,  five of which account for 14%
and 25% of sales  volume,  for the six months  periods  ended June 30,  2002 and
2001, respectively.

The Company currently uses three separate  suppliers to produce  Cold-Eeze(R) in
lozenge,  bubble gum, and sugar-free  tablet form. A significant  portion of the
Company's  revenue  is  currently  generated  from the sale of the  Cold-Eeze(R)
product.  The lozenge form is  manufactured by a third party  manufacturer  that
produces  predominantly  for the Company.  The other forms are  manufactured  by
third  parties  that produce a variety of other  products  for other  customers.
Should these relationships  terminate or discontinue for any reason, the Company
has formulated a contingency plan in order to prevent such  discontinuance  from
materially  affecting  the  Company's  operations.  Any  such  termination  may,
however,  result  in a  temporary  delay in  production  until  the  replacement
facility is able to meet the Company's production requirements.

Raw material used in the  production  of the product is available  from numerous
sources. Currently, it is being procured from a single vendor in order to secure
purchasing economies. In a situation where this one vendor is not able to supply
the  contract  manufacturer  with  the  ingredients,  other  sources  have  been
identified.

Quigley  Pharma was formed in 2001 for the  purpose of  developing  prescription
drug  products.  These  potential new products are based on patent  applications
that the Company has acquired.  The Company's  potential  products are currently
undergoing  research  and  testing and will  require  substantial  resources  to
develop these applications into commercial products.  The successful  conclusion
of such research is dependent on regulatory approval and may take several years.

Darius'  products for resale are sourced from  several  suppliers.  In the event
that such sources were no longer in a position to supply  Darius with  products,
other vendors have been identified as reliable alternatives,  which could result
in a temporary delay in production or a minimal adverse loss of business.

Currently, the principal finished products relating to Caribbean Pacific Natural
Products are being  manufactured and blended by a single vendor. In the event of
difficulties with the current sources of raw material or finished product, other
suppliers have been identified.  However, this could result in a temporary delay
in production.

LONG-LIVED ASSETS

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets."  This  statement  supercedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed  Of." The  statement  retains  the  previously  existing  accounting
requirements  related to the  recognition  and  measurement of the impairment of
long-lived   assets  to  be  held  and  used  while  expanding  the  measurement
requirements  of  long-lived  assets  to be  disposed  of  by  sale  to  include
discontinued  operations.  It also  expands the  previously  existing  reporting
requirements  for  discontinued  operations  to include a component of an entity
that either has been disposed of or is classified as held for sale.  The Company
implemented SFAS No. 144 on January 1, 2002. The  implementation of SFAS 144 did
not have a material impact on the Company's  consolidated  financial position or
results of operations.

The Company  reviews its long-lived  assets for impairment on an exception basis
whenever events or changes in circumstances indicate that the carrying amount of
the assets may not be recoverable through future cash flows. If it is determined

                                       11





that an  impairment  loss has  occurred,  such  loss will be  recognized  in the
Statement of Operations as the difference  between the carrying  amount and fair
value of the asset.

REVENUE RECOGNITION

Sales are  recognized  at the time  ownership is  transferred  to the  customer.
Provisions  for  estimated  product  returns  are  accrued in the period of sale
recognition.

COUPONS, REBATES AND DISCOUNTS

In May 2000,  the Emerging  Issues Task Force  ("EITF")  issued EITF No.  00-14,
"Accounting for Coupons,  Rebates and Discounts"  that addressed  accounting for
sales  incentives.  The Task Force  concluded  that in accounting for cash sales
incentives  a  manufacturer  should  recognize  the  incentive as a reduction of
revenue  on the later date of the  manufacturer's  sale or the date the offer is
made to the public.  The reduction of revenues  should be measured  based on the
estimated  amount of  incentives to be claimed by the ultimate  customers.  This
pronouncement was adopted in the first quarter of fiscal 2001.

In August 2001, the EITF issued EITF No. 01-09,  "Accounting  for  Consideration
Given by a Vendor to a Customer or a Reseller  of the  Vendor's  Products"  that
codified and reconciled EITF No. 00-14, No. 00-22,  "Accounting for "Points" and
Certain Other Time-Based or Volume-Based  Sales Incentive Offers, and Offers for
Free Products or Services to be Delivered in the Future" and No. 00-25,  "Vendor
Income Statement  Characterization  of  Consideration  Paid to a Reseller of the
Vendor's  Products." EITF No. 01-09  addresses the accounting for  consideration
given  by  a  vendor  to  a  customer.   The  Task  Force  concluded  that  cash
consideration  (including a sales  incentive) given by a vendor to a customer is
presumed to be a reduction of the selling  prices of the vendor's  products and,
therefore,  should be characterized as a reduction of revenue when recognized in
the  vendor's   income   statement.   That   presumption  is  overcome  and  the
consideration  should be  characterized as a cost incurred if, and to the extent
that, a benefit is or will be received from the  recipient of the  consideration
that meets both of the following  conditions:  (1) The vendor receives,  or will
receive,  an  identifiable  benefit  (goods  or  services)  in  return  for  the
consideration.  The identified  benefit must be sufficiently  separable from the
recipient's  purchase of the vendor's  products  such that the vendor could have
entered into an exchange  transaction with a party other than a purchaser of its
products  in order to  receive  that  benefit;  (2) The  vendor  can  reasonably
estimate  the fair  value of the  benefit  identified.  This  pronouncement  was
adopted in the first quarter of 2002.

SHIPPING AND HANDLING

Product sales relating to Health and Wellness and Sun-care and Skincare products
carry  an  additional   identifiable  shipping  and  handling  charge  which  is
classified as revenue. For cold remedy products, such costs are included as part
of the invoiced  price.  In all cases costs related to this revenue are recorded
in costs of goods sold.

STOCK COMPENSATION

Stock options and warrants for purchase of the Company's  common stock have been
granted to both  employees  and  non-employees  since the date of the  Company's
public  inception.   Options  and  warrants  are  exercisable  during  a  period
determined  by the  Company,  but in no event later than ten years from the date
granted.

The Company's policy for stock and option grants follows APB No. 25 and FASB 123
which  clarifies the definition of employee for purposes of applying APB No. 25,
criteria for determining  whether a plan qualifies as a  non-compensatory  plan,
the  accounting  consequences  of  various  modifications  to  the  terms  of  a
previously  fixed option or award,  and the  accounting for an exchange of share
compensation awards in a business combination, among others. Under the intrinsic
value method  prescribed by APB No. 25, the Company has recorded no compensation
expense relating to option grants to employees in periods reported.

Expense  relating to warrants granted to  non-employees  has been  appropriately
recorded in the periods  presented  based on either fair values agreed upon with
the grantees or fair values as  determined  by the Black  Scholes  pricing model
dependent upon the circumstances relating to the specific grants.

ROYALTIES

The Company  includes  royalties  and founders  commissions  incurred as cost of
products sold based on agreement terms.

                                       12





ADVERTISING

Advertising  costs  are  expensed  within  the  period  to  which  they  relate.
Advertising expense is made up of media advertising,  presented as part of sales
and marketing  expense;  co-operative  advertising,  which is accounted for as a
deduction from sales;  and free product,  which is accounted for as part of cost
of sales.  Advertising  costs incurred for the six months periods ended June 30,
2002 and 2001 were $943,021 and  $1,180,102,  respectively.  Included in prepaid
expenses and other current assets was $240,000 and $419,000 at June 30, 2002 and
December 31, 2001,  respectively,  relating to prepaid advertising and promotion
expenses.

RESEARCH AND DEVELOPMENT

Research and  development  costs are charged to operations in the year incurred.
Expenditures  for the six  months  periods  ended  June 30,  2002 and 2001  were
$1,231,401 and $523,032, respectively. Principally, the increase of research and
development  costs in 2002 was due to  expenses  incurred as part of the product
research  costs  related  to  Quigley  Pharma and study  costs  associated  with
Cold-Eeze(R).   Quigley  Pharma  is  currently  involved  in  research  activity
following  patent  applications  that the Company has acquired and such research
and  development  costs relating to potential  products are expected to increase
significantly over time as product research and testing progresses.

INCOME TAXES

The  Company  utilizes  an asset  and  liability  approach  which  requires  the
recognition  of  deferred  tax  assets  and   liabilities  for  the  future  tax
consequences  of events that have been  recognized  in the  Company's  financial
statements or tax returns.  In estimating future tax  consequences,  the Company
generally  considers all expected future events other than enactments of changes
in the tax law or rates. See Note 5 for further discussion.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with accounting  principles generally accepted
in the United States of America have been condensed or omitted.  It is suggested
that  these  financial  statements  be read in  conjunction  with the  financial
statements and  accompanying  notes for the fiscal year ended December 31, 2001,
in the Company's Form 10-K.

NOTE 3 - SEGMENT INFORMATION

The basis for presenting  segment  results  generally is consistent with overall
Company   reporting.   The  primary   difference   relates  to  presentation  of
partially-owned  operations,  which  are  presented  as if  owned  100%  in  the
operating  segments.  The adjustment to ownership basis is included in Corporate
& Other.

The Company  has  divided its  operations  into four  reportable  segments:  The
Quigley Corporation (Cold Remedy Products),  whose main product is Cold-Eeze(R),
a proprietary zinc gluconate glycine lozenge for the common cold; Darius (Health
and  Wellness)  whose  business is the sale and direct  marketing  of a range of
health and wellness products; Caribbean Pacific Natural Products, Inc. (Sun-care
and Skincare Products), a leading developer and marketer of all-natural sun-care
and  skincare  products  for luxury  resorts,  theme  parks and spas and Quigley
Pharma (Ethical  Pharmaceutical  Products),  currently  involved in research and
development   activity   to  develop   patent   applications   into   commercial
pharmaceutical products.

                                       13





Financial information by business segment follows:

-----------------------------------------------------------------------------------------------------------------------------------
  For the three                    Cold                           Sun-care and           Ethical
  months ended                    Remedy         Health and         Skincare          Pharmaceutical        Corporate and
  June 30, 2002                  Products         Wellness          Products             Products               Other         Total
-----------------------------------------------------------------------------------------------------------------------------------

Net Sales
 Customers                      $1,113,717      $3,939,906          $675,450                -                    -       $5,729,073
 Inter-segment                        -               -                 -                   -                    -             -
Licensing fees                        -               -                 -                   -                    -             -
Segment operating
 profit (loss)                 ($1,417,941)       $369,533         ($116,226)          ($337,440)              $14,226  ($1,487,848)

-----------------------------------------------------------------------------------------------------------------------------------
  As of and for the                Cold                           Sun-care and           Ethical
  six months ended                Remedy        Health and          Skincare          Pharmaceutical        Corporate and
  June 30, 2002                  Products        Wellness           Products             Products               Other         Total
-----------------------------------------------------------------------------------------------------------------------------------
Net Sales
 Customers                      $3,743,640      $6,294,514         $1,200,324               -                     -     $11,238,478
 Inter-segment                        -               -                  -                  -                     -            -
Licensing fees                     148,866            -                  -                  -                     -         148,866
Segment operating
 profit (loss)                  (2,945,105)        421,592            (87,726)         ($648,481)               26,247   (3,233,473)
Total Assets                   $25,604,612      $1,539,252         $1,132,601               -              ($3,532,951) $24,743,514
-----------------------------------------------------------------------------------------------------------------------------------
  For the three                    Cold                           Sun-care and           Ethical
  months ended                    Remedy        Health and          Skincare          Pharmaceutical        Corporate and
  June 30, 2001                  Products        Wellness           Products             Products                Other        Total
-----------------------------------------------------------------------------------------------------------------------------------
Net Sales
 Customers                        $982,417      $1,585,461           $747,841               -                     -      $3,315,719
 Inter-segment                    (115,673)       (117,790)              -                  -                 $233,463         -
Licensing fees                   1,273,864            -                  -                  -                     -       1,273,864
Segment operating
 profit (loss)                   ($578,242)       ($98,958)         ($199,009)         ($121,848)             $126,677    ($871,380)
-----------------------------------------------------------------------------------------------------------------------------------
  As of and for the                Cold                           Sun-care and            Ethical
  six months ended                Remedy        Health and          Skincare           Pharmaceutical       Corporate and
  June 30, 2001                  Products        Wellness           Products              Products               Other       Total
-----------------------------------------------------------------------------------------------------------------------------------

Net Sales
 Customers                      $4,268,588      $2,360,979         $1,391,620               -                     -      $8,021,187
 Inter-segment                    (116,385)        176,412               -                  -                 ($60,027)        -
Licensing fees                   1,273,864            -                  -                  -                     -       1,273,864
Segment operating
 Profit (loss)                    (896,620)       (291,881)          (201,027)         ($154,474)              117,420   (1,426,582)
Total Assets                   $23,453,032      $1,147,363         $1,392,623               -              ($3,033,077) $22,959,941

Costs attributable to Quigley Pharma relating to 2002 and 2001 research activity
have  been  disclosed  above  in the  segment  caption  "Ethical  Pharmaceutical
Products".

                                       14





NOTE 4 - TRANSACTIONS AFFECTING STOCKHOLDERS' EQUITY

Since the inception of the stock buy-back program in January 1998, the Board has
subsequently  increased  the  authorization  on  five  occasions,  for  a  total
authorized  buy-back of 5,000,000  shares or  approximately  38% of the previous
shares outstanding.

Such shares are  reflected as treasury  stock and will be available  for general
corporate purposes.  From the initiation of the plan, 4,159,191 shares have been
repurchased at a cost of $24,042,801 or an average cost of $5.78 per share.

As a result of the  litigation  relating to the case against  Nutritional  Foods
Corporation,  in March of 1998, a subsequent  order of the Court of Common Pleas
of Bucks County  modified the decree of January 23, 1997 to provide for a return
to treasury of 604,928  shares to the  Company.  As payment for legal  services,
118,066 of these  shares  were  reissued  with a market  value of  approximately
$1,145,358.  This value, the cost of reacquiring  these shares,  then became the
value of the net treasury stock ($2.35 per share)  represented by 486,862 shares
returned to treasury.

On April 9,  2002,  The  Quigley  Corporation  entered  into an  agreement  with
Forrester  Financial  LLC,  ("Forrester")  providing  for  Forrester to act as a
financial consultant to the Company. The consulting agreement commenced on March
7, 2002 and has a term of twelve months, but may be terminated by the Company in
its sole discretion at any time. As compensation  for services to be provided by
Forrester to the Company,  the Company  granted to Forrester,  or its designees,
warrants to purchase up to a total of 1,000,000  shares of the Company's  common
stock. The warrants have three distinct  exercise  prices,  500,000 warrants are
exercisable at $6.50 per share,  250,000  warrants are  exercisable at $8.50 per
share,  and 250,000  warrants are exercisable at $11.50 per share.  The warrants
are  exercisable  until  the  earlier  to occur of (i) March 6, 2003 or (ii) the
termination of the Consulting Agreement.  In the six months ended June 30, 2002,
the Company recorded an expense of $700,000  relating to the grant. In May 2002,
Forrester Financial exercised 500,000 warrants at an exercise price of $6.50 per
share resulting in cash received by the Company in the amount of $3,250,000 with
a correlating increase to additional paid-in-capital.

At June 30,  2002,  there were  3,803,000  unexercised  and vested  options  and
warrants of the Company's stock available for exercise.

                                       15





NOTE 5 - INCOME TAXES

Certain  exercises  of options and  warrants,  and  restricted  stock issued for
services that became  unrestricted  resulted in  reductions  to taxes  currently
payable and a  corresponding  increase to  additional-paid-in-capital  for years
prior to 1999. The tax benefit  effects of option and warrant  exercises  during
the period 1999 to 2002 were $1,756,383.  However,  these benefits were deferred
because of a net operating  loss  carry-forward  for tax purposes  ("NOLs") that
occurred during the fourth quarter of 1999,  resulting from a cumulative  effect
of deducting a total value of $42,800,364 attributed to these options,  warrants
and unrestricted  stock deductions from taxable income during the tax years 1997
and 1998. The net operating loss carry-forwards arising from the option, warrant
and stock  activities  approximate  $12.7 million for federal tax  purposes,  of
which $3.5 million will expire in 2019, $9.2 million in 2020 and thereafter; and
$17.9  million for state  purposes,  of which $9.7  million will expire in 2009,
$3.3 million in 2010 and $4.9 million in 2011 and thereafter.  Until  sufficient
taxable  income to offset  the  temporary  timing  differences  attributable  to
operations  and the tax  deductions  attributable  to option,  warrant and stock
activities are assured,  a valuation  allowance  equaling the total deferred tax
asset is being provided.

NOTE 6 - EARNINGS PER SHARE

Basic earnings per share ("EPS")  excludes  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
that could occur if  securities  or other  contracts  to issue Common Stock were
exercised or  converted  into Common Stock or resulted in the issuance of Common
Stock that then shared in the earnings of the entity.  Diluted EPS also utilizes
the treasury stock method that prescribes a theoretical  buy-back of shares from
the  theoretical  proceeds of all options and  warrants  outstanding  during the
period. Since there are 3,803,000 options and warrants outstanding, fluctuations
in the  actual  market  price  can have a varying  of  results  for each  period
presented.  For the periods  presented that reflect losses,  no effect was given
for options and warrants because the result would be anti-dilutive.

A  reconciliation  of the applicable  numerators and  denominators of the income
statement periods presented is as follows  (millions,  except earnings per share
amounts):

                    Three Months Ended       Six Months Ended       Three Months Ended       Six Months Ended
                       June 30, 2002            June 30, 2002          June 30, 2001           June 30, 2001
                    Loss    Shares  EPS     Loss    Shares  EPS     Loss   Shares   EPS     Loss    Shares   EPS
                    -----------------------------------------------------------------------------------------------

Basic EPS          ($ 1.5)   11.0 ($0.13) ($ 3.2)   10.8   ($0.29) ($0.7)   10.7   ($0.06) ($1.1)   10.7    ($0.10)
Dilutives:
Options/Warrants      --      --       --     --      --       --     --      --              --      --       --
                   ------------------------------------------------------------------------------------------------

Diluted EPS        ($ 1.5)   11.0 ($0.13) ($ 3.2)   10.8   ($0.29) ($0.7)   10.7   ($0.06) ($1.1)   10.7    ($0.10)
                  =================================================================================================

                                       16





NOTE 7 - RELATED PARTY TRANSACTIONS

In the ordinary  course of business,  the Company has sales  brokerage and other
arrangements with entities whose major stockholders are also stockholders of The
Quigley  Corporation,  or are  related  to major  stockholders  of the  Company.
Commissions and other items paid or payable under such arrangements  amounted to
approximately $33,525 and $69,000 respectively, for the six-months periods ended
June 30, 2002 and 2001.

The Company is in the process of acquiring licenses in certain countries through
related party entities. For the six-months periods ended June 30, 2002 and 2001,
fees  amounting  to $140,993  and  $150,470,  respectively,  have been paid to a
related entity to assist with the regulatory aspects of obtaining such licenses.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

The Company  maintains certain royalty and founders  commission  agreements with
the  developers,  licensors,  founders,  and  consultants  for the  Cold-Eeze(R)
products.  Up to March 5, 2002,  these payments were 13% of sales collected less
certain  deductions and thereafter at 10%. Of the 13%, up to March 2002, a three
percent  royalty on sales  collected less certain  deductions was payable to the
patent holder whose agreement  expired on March 5, 2002. A three percent royalty
of sales  collected  less certain  deductions is payable to the developer of the
product  formulation  together  with a two  percent  consulting  fee based on an
agreement that expires in 2007. Additionally,  a founders' commission is payable
totaling 5% of sales collected less certain  deductions,  which is shared by two
of the officers whose agreements expire in 2005.

Also, required for the acquisition of certain assets of a privately held company
involved  in the  direct  marketing  and  distribution  of health  and  wellness
products  are  continuous   payments  for  the  use  of  product   formulations;
consulting;  confidentiality  and  non-compete  fees  that  are 5% on net  sales
collected for the continuous applications of these arrangements.

On April 9,  2002,  The  Quigley  Corporation  entered  into an  agreement  with
Forrester  Financial  LLC,  providing  for  Forrester  to  act  as  a  financial
consultant to the Company.  The consulting  agreement commenced on March 7, 2002
and has a term of twelve  months,  but may be  terminated  by the Company in its
sole  discretion  at any time.  As  compensation  for services to be provided by
Forrester to the Company,  the Company  granted to Forrester,  or its designees,
warrants to purchase up to a total of 1,000,000  shares of the Company's  common
stock at three specific exercise prices.  The warrants are exercisable until the
earlier to occur of (i) March 6, 2003 or (ii) the  termination of the Consulting
Agreement.  In the six months  ended June 30,  2002,  the  Company  recorded  an
expense of $700,000  relating  to the grant.  In May 2002,  Forrester  Financial
exercised  500,000 warrants at an exercise price of $6.50 per share resulting in
cash received by the Company in the amount of $3,250,000.

The Company has  anticipated  commitments  for  advertising  and other purchases
amounting to approximately $1,400,000.

A Special Meeting of the Quigley  stockholders  was held on October 15, 1999, at
which a majority of the shares  entitled  to vote  adopted a  Corrective  Action
Proposal  (initially  reported in the Company's Form 10-Q for the quarter ending
June 30, 1999) to ratify actions previously taken by the Company relating to the
1990 1 for 2.74 reverse  split,  the 1995 1 for 10 reverse  split (the  "Reverse
Splits") and the 1997 1 for 2 forward split (the "Forward  Split").  Pursuant to
the October 15, 1999 Special  Meeting,  the Company  authorized  the filing of a
declaratory  judgment  action in Nevada to determine  the  effectiveness  of the
Corrective Action.

In August 2000,  the District  Court of Clark County,  Nevada,  held that it had
jurisdiction to decide the Company's declaratory judgment action filed in April,
2000,  against two putative  shareholders  (Thomas Goldblum and Alan Wayne),  in
which the  Company  seeks a  judicial  declaration  that,  based on  stockholder
approval of the Corrective Action Proposal, the Reverse Splits and Forward Split
satisfy  and/or  comply with Nevada law and that the  capitalization  of Quigley
evidenced by the issued and outstanding  shares of common stock and common stock
warrants is as reflected on Quigley's  stock  transfer  ledger on September  10,
1999, the record date of the Special Meeting. The District Court of Clark County
held a  hearing  on this  matter  on March  19,  2002 and  ruled in favor of The
Quigley Corporation. A final judgment has been entered of record by the Court on
June 21, 2002.  The period for appeal of this order to the Nevada  Supreme Court
has expired.

                                       17





An underlying  claim filed by Goldblum and Wayne in the Court of Common Pleas of
Montgomery  County,  Pennsylvania on March 17, 1996 alleging that the plaintiffs
became owners of 500,000  shares each of the Company's  common stock in or about
1990 and  requested  damages in excess of $100,000  for breach of  contract  and
conversion.

The Company is vigorously defending this lawsuit and has denied any liability to
the plaintiffs. The Company also believes that the plaintiffs' claims are barred
by the applicable  statutes of limitations,  and that the plaintiffs are, in any
event,  limited to claims for approximately 36,000 shares. The Company continues
to believe that the plaintiffs'  claims are without merit but certain  pre-trial
discovery remains  incomplete and no prediction can be made as to the outcome of
this case.

An action was filed by Intervention, Inc. on July 2, 2002 in Contra Costa County
Superior  Court  under the  California  Unfair  Competition  Law,  Business  and
Professions Code, Section 17200. The Complaint claims that COLD-EEZE(R) does not
contain  ionic zinc and therefore  does not have the unique  quality the Company
asserts for it. The  Complaint  purports to attack The  Cleveland  Clinic  Study
titled Zinc  Gluconate  Lozenges for Treating the Common Cold and the  Dartmouth
Study,  Zinc  Gluconate and The Common Cold: A Controlled  Clinical  Study.  The
plaintiff  claims  that  the  Dartmouth  Study  is not  double-blind  and is not
randomized.  The plaintiff also claims that The Cleveland Clinic Study is untrue
and deceptive  because it did not conclude that patients  "starting  treatments"
with zinc had a 42% reduction in duration of the common cold and, also,  because
the 42%  reduction in common cold duration is not a reference to average of cold
duration but rather is a reference to the reduction in median duration. There is
also a claim by the plaintiff that there is an implied claim that the results in
the studies have been confirmed by repetition which plaintiff contests.

The  plaintiff is requesting  attorney's  fees and costs,  corrective  equitable
relief including restitution and an injunction.

The Company  believes  plaintiff's  claim is completely  without  merit,  has no
scientific  basis and is  vigorously  defending  the  lawsuit and has denied any
liability to the plaintiff. Certain pre-trial discovery and motions remain to be
completed and no prediction can be made as to the outcome of this case.

On April 12, 2002,  the Company  commenced a complaint in Equity in the Court of
Common   Pleas  of  Bucks  County   against  the  former   President  of  Darius
International Inc., its wholly owned subsidiary,  following  termination of such
President.  The allegations in the complaint include, but are not limited to, an
alleged  breach of fiduciary  duty owed to the  Company.  The Company is seeking
both  injunctive  and monetary  relief.  On or about May 1, 2002,  the defendant
filed a counterclaim  requesting  that the Court declare him the lawful owner of
55,000 stock options,  unspecified  damages  relating to an alleged breach of an
oral contract and for  commissions  allegedly  owed. In addition,  the Defendant
requests  the return of  certain  intellectual  property  used to  commence  and
continue Darius' operations.

The  Corporation  believes  Defendant's  claims are without merit, is vigorously
defending the counterclaims  and is prosecuting its action on its complaint.  No
assessment as to the outcome of this action can be made at this time.

NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS

SFAS 143

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations." This statement  addresses  financial  accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. The Company is required to implement SFAS No.
143 on January 1, 2003.  Management  does not expect  this  statement  to have a
material impact on the Company's  consolidated  financial position or results of
operations.

                                       18





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

In addition to  historical  information,  this Report  contains  forward-looking
statements.  These  forward-looking  statements are subject to certain risks and
uncertainties  that could cause actual results to differ  materially  from those
reflected in these forward-looking  statements.  Factors that might cause such a
difference  include,  but are not limited to management of growth,  competition,
pricing pressures on the Company's product, industry growth and general economic
conditions.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking  statements,  which reflect management's opinions only as of the
date hereof.  The Company undertakes no obligation to revise or publicly release
the results of any revision to these forward-looking  statements. The Company is
subject to a variety of factors  more fully  described in the  Company's  Annual
Report on Form 10-K filed with the Securities and Exchange Commission.

Overview
--------

Revenues  for the  three  and six  months  periods  ended  June  30,  2002  were
$5,729,073  and  $11,387,344,   respectively,  as  compared  to  $4,589,583  and
$9,295,051 for the comparable  2001 periods.  Revenue for the six months periods
ended June 30,  2002 and 2001  include  an amount of  $148,866  and  $1,273,864,
respectively,  relating  to  licensing  fees  from the  settlement  of a lawsuit
following the filing by The Quigley  Corporation of a patent  infringement  suit
against Gel Tech, LLC, the developer of Zicam(TM),  and Gum Tech  International,
Inc., its distributor, in November 1999. Under the agreement, Gum Tech agreed to
pay The Quigley  Corporation  $1,137,500  for a limited  license  for  Quigley's
patent  on the use of zinc  gluconate  for the  treatment  of the  duration  and
symptoms  of the common  cold.  Gum Tech was also  required  to pay The  Quigley
Corporation  an ongoing  royalty of 5.5 percent from April 1, 2001 through March
5,  2002 on all  Zicam  cold  relief  sales  receipts.  In  addition,  Gum  Tech
guaranteed to pay Quigley a minimum of $500,000 in ongoing royalties  regardless
of sales receipts  through March 5, 2002, that actually totaled $557,957 for the
period.  Legal and other  expenses  associated  with this  lawsuit  approximated
$700,000.

Darius  International,  Inc., and Caribbean Pacific Natural Products,  Inc., had
combined  revenues for the three and six months  periods  ended June 30, 2002 of
$4,615,356 and $7,494,838 with the comparable 2001 revenues being $2,333,302 and
$3,752,599,  respectively.  The increased  revenues for these  entities  reflect
improved performance from the Company's diversification strategy that started in
the second half of 2000 into other Health and Wellness and Sun-Care and Skincare
business segments to augment the Company's core business of cold remedy products
where the majority of these revenues  generally result during the second half of
the year.

Net sales of the  Cold-Eeze(R)  products  were reduced in the six months  period
ended June 30, 2002 over the comparable 2001 period by  approximately  $525,000.
Consumer  demand for cold remedies  generally  was reduced  during the past cold
season  despite the increase in the  incidence  of illnesses  during the period.
Additionally,  due to the  weakness  in the  economy  our  customers  are better
managing   inventory  levels  which  impacts  the  size  and  frequency  of  the
Cold-Eeze(R) orders placed.

The Company  continues  to support  Cold-Eeze(R)  through  ongoing  co-operative
advertising with our customers with strong  promotional  activity at store level
and directly with our consumer at the point of purchase.

The  consolidated  Gross Profit  margin was reduced in 2002 due to the licensing
fee income in 2001 along with the higher  proportion  of sales  attributable  to
Darius,  the  products  of which  carry a lower  margin  compared  to the  other
business segments of the Company.

Net loss for the three and six months periods ended June 30, 2002 was $1,450,220
and $3,150,988,  respectively,  the  comparative  2001 net loss was $680,443 and
$1,083,352.  Net loss in 2002 increased during the second quarter and during the
first six  months as a result  of  additional  research  and  development  costs
associated with Quigley Pharma and other clinical studies;  fees associated with
consulting  duties;  and  the  decrease  in  net  licensing  fees  from  settled
litigation  that occurred  during the second quarter of 2001.  These  additional
losses  were  mitigated  by net  profits  reflected  in 2002 from the Health and
Wellness business segment.

The  Company  continues  to use the  resources  of  contract  manufacturers  and
independent national and international brokers to represent and compliment sales
of the Company's Cold-Eeze(R) products, thereby saving capital and other ongoing
expenditures that would otherwise be incurred.

                                       19





The Company currently uses three separate  suppliers to produce  Cold-Eeze(R) in
lozenge,  bubble gum, and sugar free tablet form.  Other products of the Company
and its subsidiaries are manufactured by third parties that produce a variety of
other  products for other  customers.  Should these  relationships  terminate or
discontinue  for any reason,  the Company has  formulated a contingency  plan in
order to prevent such  discontinuance  from  materially  affecting the Company's
operations.  Any such termination may,  however,  result in a temporary delay in
production  until  the  replacement  facility  is  able to  meet  the  Company's
production requirements.

Raw material  used in the  production  of certain  products are  available  from
numerous sources. Currently,  certain materials are being procured from a single
source vendor in order to secure purchasing economies.  In a situation where one
vendor is not able to supply the  contract  manufacturer  with the  ingredients,
other sources have been identified. All manufacturing sites have the capacity to
respond quickly to market requirements.

Effect of Recent Accounting Pronouncements
------------------------------------------

SFAS 143

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations." This statement  addresses  financial  accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. The Company is required to implement SFAS No.
143 on January 1, 2003.  Management  does not expect  this  statement  to have a
material impact on the Company's  consolidated  financial position or results of
operations.

Significant Accounting Policies
-------------------------------

As   previously   described,   the  Company  is  engaged  in  the   development,
manufacturing,  and marketing of health and homeopathic  products that are being
offered to the general public. Due to the nature of the business, it is unlikely
that any  accounting  policies,  that are open to  interpretation,  could have a
material effect on the Company's  results of operations.  Certain key accounting
policies  that may affect the  results of the  Company are the timing of revenue
recognition and sales incentives (including coupons, rebates and discounts); the
classification  of  advertising  expenses;  and the fact that all  research  and
development  expenses  are  expensed  as  incurred.  Note 1 to the  consolidated
financial  statements  describes  the  Company's  other  significant  accounting
policies.

REVENUE RECOGNITION

Sales are  recognized  at the time  ownership is  transferred  to the  customer.
Provisions  for  estimated  product  returns  are  accrued in the period of sale
recognition.

COUPONS, REBATES AND DISCOUNTS

In May 2000,  the Emerging  Issues Task Force  ("EITF")  issued EITF No.  00-14,
"Accounting for Coupons,  Rebates and Discounts"  that addressed  accounting for
sales  incentives.  The Task Force  concluded  that in accounting for cash sales
incentives  a  manufacturer  should  recognize  the  incentive as a reduction of
revenue  on the later date of the  manufacturer's  sale or the date the offer is
made to the public.  The reduction of revenues  should be measured  based on the
estimated  amount of  incentives to be claimed by the ultimate  customers.  This
pronouncement was adopted in the first quarter of fiscal 2001.

In August 2001, the EITF issued EITF No. 01-09,  "Accounting  for  Consideration
Given by a Vendor to a Customer or a Reseller  of the  Vendor's  Products"  that
codified and reconciled EITF No. 00-14, No. 00-22,  "Accounting for "Points" and
Certain Other Time-Based or Volume-Based  Sales Incentive Offers, and Offers for
Free Products or Services to be Delivered in the Future" and No. 00-25,  "Vendor
Income Statement  Characterization  of  Consideration  Paid to a Reseller of the
Vendor's  Products." EITF No. 01-09  addresses the accounting for  consideration
given  by  a  vendor  to  a  customer.   The  Task  Force  concluded  that  cash

                                       20





consideration  (including a sales  incentive) given by a vendor to a customer is
presumed to be a reduction of the selling  prices of the vendor's  products and,
therefore,  should be characterized as a reduction of revenue when recognized in
the  vendor's   income   statement.   That   presumption  is  overcome  and  the
consideration  should be  characterized as a cost incurred if, and to the extent
that, a benefit is or will be received from the  recipient of the  consideration
that meets both of the following  conditions:  (1) The vendor receives,  or will
receive,  an  identifiable  benefit  (goods  or  services)  in  return  for  the
consideration.  The identified  benefit must be sufficiently  separable from the
recipient's  purchase of the vendor's  products  such that the vendor could have
entered into an exchange  transaction with a party other than a purchaser of its
products  in order to  receive  that  benefit;  (2) The  vendor  can  reasonably
estimate  the fair  value of the  benefit  identified.  This  pronouncement  was
adopted in the first quarter of 2002.

ADVERTISING

Advertising  costs  are  expensed  within  the  period  to  which  they  relate.
Advertising expense is made up of media advertising,  presented as part of sales
and marketing  expense;  co-operative  advertising,  which is accounted for as a
deduction from sales;  and free product,  which is accounted for as part of cost
of sales.  Advertising  costs incurred for the six months periods ended June 30,
2002 and 2001 were $943,021 and  $1,180,102,  respectively.  Included in prepaid
expenses and other current assets was $240,000 and $419,000 at June 30, 2002 and
December 31, 2001,  respectively,  relating to prepaid advertising and promotion
expenses.

RESEARCH AND DEVELOPMENT

Research and  development  costs are charged to operations in the year incurred.
Expenditures  for the six  months  periods  ended  June 30,  2002 and 2001  were
$1,231,401 and $523,032, respectively. Principally, the increase of research and
development  costs in 2002 was due to  expenses  incurred as part of the product
research  costs  related  to  Quigley  Pharma and study  costs  associated  with
Cold-Eeze(R).   Quigley  Pharma  is  currently  involved  in  research  activity
following  patent  applications  that the Company has acquired and such research
and  development  costs relating to potential  products are expected to increase
significantly over time as product research and testing progresses.

                                       21





RESULTS OF OPERATIONS

Three months ended June 30, 2002 compared to three months ended June 30, 2001
-----------------------------------------------------------------------------

For the three  months  ended June 30,  2002,  the Company  reported  revenues of
$5,729,073  and a net loss of  $1,450,220  as compared to revenues of $4,589,583
and a net loss of  $680,443,  for the  comparable  period  ended June 30,  2001.
Cold-Eeze(R)  sales were reduced in 2002 due to the variable  nature of consumer
demand in the off-peak  cough/cold season. In this economy,  it appears that our
customers are managing their inventory  levels to achieve  maximum  efficiencies
resulting  in  reduced  order  frequency.   Darius  and  Caribbean  Pacific  had
consolidated  sales  in the  three  months  ended  June  30,  2002  and  2001 of
$4,615,356 and $2,333,302,  respectively,  reflecting the  effectiveness  of the
Company's  diversification  strategy to augment the  Company's  core business of
cold remedy  products  where the  majority of these  revenues  generally  result
during the second half of the year.

Cost  of  Sales  as  a  percentage  of  sales  before  co-operative  advertising
promotions  for the three months ended June 30, 2002 was 61.6% compared to 52.5%
for the comparable period ended June 30, 2001. The 2002 results reflect a higher
cost of sales due to the greater  proportion of sales  represented  by Darius in
2002 (67% of consolidated  2002 sales as compared to 46.8% of consolidated  2001
sales).   The  Darius  cost  of  goods  is  significantly   higher  relative  to
Cold-Eeze(R) and Caribbean Pacific products, thereby increasing the overall 2002
percentage.

For the  three  months  ended  June 30,  2002,  total  operating  expenses  were
$3,598,841 compared to $3,686,357 for the comparable period ended June 30, 2001.
The 2002 expenditures  reflects  increased  clinical trial costs associated with
Quigley Pharma of  approximately  $209,000,  along with additional  Cold-Eeze(R)
trial and study costs  approximating  $175,000.  Comparative  operating expenses
were affected by the legal costs,  approximating  $700,000,  incurred in 2001 in
relation to the lawsuit with Gel Tech, LLC.

As  compared  to 2001,  net loss for the three  months  ended June 30,  2002 was
negatively  impacted  by  the  reduction  in net  licensing  fees  from  settled
litigation  along  with  increased  research  and  development  costs  primarily
associated with Quigley Pharma and other clinical studies.

During the three  months ended June 30, 2002,  the major  operating  expenses of
salaries,  brokerage commissions,  promotion, media advertising, and legal costs
accounted  for  $2,018,714  (56%)  of  total  operating  costs.   These  expense
categories for the comparable  period in 2001 accounted for $2,422,836  (65%) of
total operating  costs. The remaining items for the periods were of a semi-fixed
nature in that they do not strictly follow sales trends.

Six months ended June 30, 2002 compared to six months ended June 30, 2001
-------------------------------------------------------------------------

For the six  months  ended June 30,  2002,  the  Company  reported  revenues  of
$11,387,344  and a net loss of  $3,150,988 as compared to revenues of $9,295,051
and a net loss of  $1,083,352,  for the  comparable  period ended June 30, 2001.
Cold-Eeze(R)  sales were  reduced in 2002 due to a  slowdown  in demand  despite
increases in cough/cold illnesses. The diversification strategy that the Company
started in 2000 into  other  Health  and  Wellness  and  Sun-Care  and  Skincare
business  segments  made a  significant  contribution  to  revenues  with  these
segments  having  combined  revenues of $7,494,838 as compared to $3,752,599 for
the same period 2001. This diversification  augments the Company's core business
of cold remedy  products where the majority of these revenues  generally  result
during the second  half of the year.  Revenues  for the first six months of 2001
include an amount of  $1,273,864 in the  settlement  of a lawsuit  following the
filing by the Quigley  Corporation  of a patent  infringement  suit  against Gel
Tech,  LLC, the developer of Zicam(TM)  and Gum Tech  International,  Inc.,  its
distributor.

Cost  of  Sales  as  a  percentage  of  sales  before  co-operative  advertising
promotions  for the six months  ended June 30, 2002 was 54.6%  compared to 42.6%
for the comparable period ended June 30, 2001. The 2002 results reflect a higher
cost of sales due to the greater  proportion of sales  represented  by Darius in
2002 (54% of consolidated  2002 sales as compared to 27.5% of consolidated  2001

                                       22





sales).   The  Darius  cost  of  goods  is  significantly   higher  relative  to
Cold-Eeze(R)  and Caribbean  Pacific  products,  thereby  increasing the overall
percentage.

For the six months ended June 30, 2002, total operating expenses were $8,259,152
compared to $7,066,378 for the  comparable  period ended June 30, 2001. The 2002
expenditures  reflects  increased research and development costs associated with
Quigley Pharma of  approximately  $450,000,  along with additional  Cold-Eeze(R)
trial and study costs approximating $90,000. Comparative operating expenses were
affected by reduced legal costs in 2002 of approximately $450,000, however, 2002
administration  costs included a charge of $700,000  relating to the granting of
1,000,000  warrants to  Forrester  Financial,  LLC in March 2002  providing  for
Forrester to act as a financial consultant to the Company.

Net loss for the six months ended June 30, 2002 was  negatively  impacted by the
reduced net licensing  fees that  commenced  during the second  quarter of 2001,
increased  research and  development  costs in 2002  primarily  associated  with
Quigley  Pharma and other  clinical  studies  and fees in 2002  associated  with
consulting services.

During the six months  ended June 30,  2002,  the major  operating  expenses  of
salaries,  brokerage commissions,  promotion, media advertising, and legal costs
accounted  for  $5,246,452  (63.5%)  of total  operating  costs.  These  expense
categories for the comparable  period in 2001 accounted for $4,688,378  (66%) of
total operating  costs. The remaining items for the periods were of a semi-fixed
nature in that they do not strictly follow sales trends.

LIQUIDITY AND CAPITAL RESOURCES

The total  assets of the  Company at June 30,  2002 and  December  31, 2001 were
$24,743,514  and  $24,755,795,   respectively.   Working  capital  increased  to
$19,077,178 from $18,625,819 during the period. The significant  movement within
total assets represents the decrease in accounts receivable of $2,640,884,  cash
and cash equivalents increased by $3,098,326, prepaid expenses and other current
assets decreased by $656,759,  inventory  increased by $112,383.  From a working
capital perspective,  accounts payable increased by $1,334 and accrued royalties
and  sales  commissions   decreased  over  the  period  by  $539,002  while  the
advertising accrual decreased by $434,275.  Total cash balances at June 30, 2002
were $12,839,166,  as compared to $9,740,840 at December 31, 2001. In June 2002,
Forrester  Financial,  LLC exercised  500,000  warrants at an exercise  price of
$6.50 per share,  resulting  in cash  received  by the  Company in the amount of
$3,250,000.

The Company believes that its increased marketing efforts and national publicity
concerning the Cold-Eeze(R) products, the Company's manufacturing  availability,
newly  available  products,  growth in  international  sales  together  with its
current working capital should provide an internal source of capital to fund the
Company's  business   operations.   In  addition  to  anticipated  funding  from
operations,  the  Company  may raise  capital  through  the  issuance  of equity
securities to finance anticipated growth.

Notwithstanding previous period negative cash flows from operations,  management
believes  amounts  of cash on hand as  well  as  those  current  assets  readily
convertible  to  cash  will  provide   adequate   liquidity  to  support  future
operations.  Any challenge to the Company's  patent rights could have a material
adverse effect on future liquidity of the Company;  however,  the Company is not
aware of any condition that would make such an event probable.

CAPITAL EXPENDITURES

Since the  Company's  products  are  manufactured  by outside  sources,  capital
expenditures during the remainder of 2002 are not anticipated to be material.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

                                       23





                           Part II. Other Information
                           --------------------------

ITEM 1. LEGAL PROCEEDINGS

                               GOLDBLUM AND WAYNE

A Special Meeting of the Quigley  stockholders  was held on October 15, 1999, at
which a majority of the shares  entitled  to vote  adopted a  Corrective  Action
Proposal  (initially  reported in the Company's Form 10-Q for the quarter ending
June 30, 1999) to ratify actions previously taken by the Company relating to the
1990 1 for 2.74 reverse  split,  the 1995 1 for 10 reverse  split (the  "Reverse
Splits") and the 1997 1 for 2 forward split (the "Forward  Split").  Pursuant to
the October 15, 1999 Special  Meeting,  the Company  authorized  the filing of a
declaratory  judgment  action in Nevada to determine  the  effectiveness  of the
Corrective Action.

In August 2000,  the District  Court of Clark County,  Nevada,  held that it had
jurisdiction to decide the Company's declaratory judgment action filed in April,
2000,  against two putative  shareholders  (Thomas Goldblum and Alan Wayne),  in
which the  Company  seeks a  judicial  declaration  that,  based on  stockholder
approval of the Corrective Action Proposal, the Reverse Splits and Forward Split
satisfy  and/or  comply with Nevada law and that the  capitalization  of Quigley
evidenced by the issued and outstanding  shares of common stock and common stock
warrants is as reflected on Quigley's  stock  transfer  ledger on September  10,
1999, the record date of the Special Meeting. The District Court of Clark County
held a  hearing  on this  matter  on March  19,  2002 and  ruled in favor of The
Quigley Corporation. A final judgment has been entered of record by the Court on
June 21, 2002.  The period for appeal of this order to the Nevada  Supreme Court
has expired.

An underlying  claim filed by Goldblum and Wayne in the Court of Common Pleas of
Montgomery  County,  Pennsylvania on March 17, 1996 alleging that the plaintiffs
became owners of 500,000  shares each of the Company's  common stock in or about
1990 and  requested  damages in excess of $100,000  for breach of  contract  and
conversion.

The Company is vigorously defending this lawsuit and has denied any liability to
the plaintiffs. The Company also believes that the plaintiffs' claims are barred
by the applicable  statutes of limitations,  and that the plaintiffs are, in any
event,  limited to claims for approximately 36,000 shares. The Company continues
to believe that the plaintiffs'  claims are without merit but certain  pre-trial
discovery remains  incomplete and no prediction can be made as to the outcome of
this case.

                               INTERVENTION, INC.

An action was filed by Intervention, Inc. on July 2, 2002 in Contra Costa County
Superior  Court  under the  California  Unfair  Competition  Law,  Business  and
Professions Code, Section 17200. The Complaint claims that COLD-EEZE(R) does not
contain  ionic zinc and therefore  does not have the unique  quality the Company
asserts for it. The  Complaint  purports to attack The  Cleveland  Clinic  Study
titled Zinc  Gluconate  Lozenges for Treating the Common Cold and the  Dartmouth
Study,  Zinc  Gluconate and The Common Cold: A Controlled  Clinical  Study.  The
plaintiff  claims  that  the  Dartmouth  Study  is not  double-blind  and is not
randomized.  The plaintiff also claims that The Cleveland Clinic Study is untrue
and deceptive  because it did not conclude that patients  "starting  treatments"
with zinc had a 42% reduction in duration of the common cold and, also,  because
the 42%  reduction in common cold duration is not a reference to average of cold
duration but rather is a reference to the reduction in median duration. There is
also a claim by the plaintiff that there is an implied claim that the results in
the studies have been confirmed by repetition which plaintiff contests.

The  plaintiff is requesting  attorney's  fees and costs,  corrective  equitable
relief including restitution and an injunction.

The Company  believes  plaintiff's  claim is completely  without  merit,  has no
scientific  basis and is  vigorously  defending  the  lawsuit and has denied any
liability to the plaintiff. Certain pre-trial discovery and motions remain to be
completed and no prediction can be made as to the outcome of this case.

                                       24



                          LITIGATION - FORMER EMPLOYEE

On April 12, 2002,  the Company  commenced a complaint in Equity in the Court of
Common   Pleas  of  Bucks  County   against  the  former   President  of  Darius
International Inc., its wholly owned subsidiary,  following  termination of such
President.  The allegations in the complaint include, but are not limited to, an
alleged  breach of fiduciary  duty owed to the  Company.  The Company is seeking
both  injunctive  and monetary  relief.  On or about May 1, 2002,  the defendant
filed a counterclaim  requesting  that the Court declare him the lawful owner of
55,000 stock options,  unspecified  damages  relating to an alleged breach of an
oral contract and for  commissions  allegedly  owed. In addition,  the Defendant
requests  the return of  certain  intellectual  property  used to  commence  and
continue Darius' operations.

The  Corporation  believes  Defendant's  claims are without merit, is vigorously
defending the counterclaims  and is prosecuting its action on its complaint.  No
assessment as to the outcome of this action can be made at this time.

ITEM 2. CHANGES IN SECURITIES

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            The  annual  meeting  of the  Company  was held on May 1,  2002 with
10,675,153 shares eligible to vote. The presence of a quorum was reached and the
following proposals were approved by the stockholders:

     (i)    To elect a Board of  Directors  to serve for the ensuing  year until
            the next Annual Meeting of Stockholders  and until their  respective
            successors have been duly elected and qualified.

    (ii)    To  ratify  the   appointment  of   PricewaterhouseCoopers   LLP  as
            independent auditors for the year ending December 31, 2002.

For proposals (i) and (ii) above, the votes were cast as follows:


        Proposal                            Position                                For       Against       Withheld    Abstentions
-----------------------------------------------------------------------------------------------------------------------------------
(i)  By nominee:
     Guy J. Quigley              Chairman of the Board, President, CEO          9,245,837         -          22,368            -
     Charles A. Phillips         Executive Vice President, COO and Director     9,245,837         -          22,368            -
     George J. Longo             Vice President, CFO and Director               9,245,837         -          22,368            -
     Eric H. Kaytes              Vice President, CIO and Director               9,245,837         -          22,368            -
     Jacqueline F. Lewis         Director                                       9,245,837         -          22,368            -
     Rounsevelle W. Schaum       Director                                       9,245,837         -          22,368            -
     Charles A. Grenuardi        Director                                       9,245,837         -          22,368            -
-----------------------------------------------------------------------------------------------------------------------------------
(ii) PricewaterhouseCoopers LLP  Independent Auditors                           9,247,940       10,997           -           9,268
-----------------------------------------------------------------------------------------------------------------------------------


ITEM 5. OTHER INFORMATION
None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      (1)  99.1
      (2)  99.2

(b)   The Company reported under:

      Item 5.  Other Events

      On April 9, 2002, the Company signed a Consulting  Agreement effective
      March 7, 2002 with Forrester Financial,  LLC, ("Forrester")  providing
      for  Forrester to act as a financial  consultant  to the Company.  The
      Consulting  Agreement  commenced on March 7, 2002 and has a term of 12
      months but may be terminated by the Company, in its sole discretion at
      any time.

      There  were no other  Current  Reports  on Form 8-K filed  during  the
      quarter ended June 30, 2002.

                                       25





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.


                                         THE QUIGLEY CORPORATION



                                     By: /s/ George J. Longo
                                         -----------------------------
                                             George J. Longo
                                             Vice President,
                                             Chief Financial Officer

Date: August 9, 2002

                                       26