10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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  MARCH 31, 2004
                                      ---------------

                                       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 Principal Executive Offices)                  (Zip Code)

                                 (215) 345-0919
                       ----------------------------------
                         (Registrant's Telephone Number,
                              Including Area Code)

                                       N/A
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

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  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of the latest  practicable  date (all of one class of $.0005 par
value Common Stock). As of April 28, 2004 there were 11,515,255 shares of common
stock outstanding.






                                TABLE OF CONTENTS


                                                                       PAGE NO.
        PART I - FINANCIAL INFORMATION

Item 1.     Consolidated Financial Statements                            3-17

Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of Operations               18-22

Item 3.     Quantitative and Qualitative Disclosure About
            Market Risk                                                    22

Item 4.     Controls and Procedures                                        22

        PART II - OTHER INFORMATION

Item 1.     Legal Proceedings                                           22-23

Item 2.     Changes in Securities and Use of Proceeds                      23

Item 3.     Defaults Upon Senior Securities                                23

Item 4.     Submission of Matters to a
            Vote of Security Holders                                       23

Item 5.     Other Information                                              23

Item 6.     Exhibits and Reports on Form 8-K                               23

Signatures                                                                 24


                                      -2-




                             THE QUIGLEY CORPORATION
                           CONSOLIDATED BALANCE SHEETS


                             ASSETS                                           March 31, 2004    December 31,
                                                                                (Unaudited)        2003
                                                                              --------------    -------------
CURRENT ASSETS:

   Cash and cash equivalents                                                   $ 15,586,602      $ 11,392,089
   Accounts receivable (net of doubtful accounts of $515,753 and $808,812)        2,077,575         7,861,883
   Inventory                                                                      3,954,475         3,752,903
   Prepaid expenses and other current assets                                        464,772           733,597
                                                                               ------------      ------------
       TOTAL CURRENT ASSETS                                                      22,083,424        23,740,472
                                                                               ------------      ------------

PROPERTY, PLANT AND EQUIPMENT - net                                               2,337,791         2,418,159
                                                                               ------------      ------------


OTHER ASSETS:
   Goodwill                                                                          30,763            30,763
   Other assets                                                                     133,326            80,365
                                                                               ------------      ------------
       TOTAL OTHER ASSETS                                                           164,089           111,128
                                                                               ------------      ------------

TOTAL ASSETS                                                                   $ 24,585,304      $ 26,269,759
                                                                               ============      ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

   Accounts payable                                                            $    670,978      $    524,136
   Accrued royalties and sales commissions                                          845,347         1,594,457
   Accrued advertising                                                              846,608         1,354,536
   Other current liabilities                                                      2,145,787         2,009,989
                                                                               ------------      ------------
       TOTAL CURRENT LIABILITIES                                                  4,508,720         5,483,118
                                                                               ------------      ------------

 MINORITY INTEREST                                                                   57,563              --

COMMITMENTS AND CONTINGENCIES  (NOTE 11)

STOCKHOLDERS' EQUITY:

   Common stock, $.0005 par value; authorized 50,000,000;
     Issued: 16,161,308 and 16,149,079 shares                                         8,080             8,074
   Additional paid-in-capital                                                    34,295,454        34,281,449
   Retained earnings                                                             10,903,646        11,685,277
   Less: Treasury stock, 4,646,053 and 4,646,053 shares, at cost                (25,188,159)      (25,188,159)
                                                                               ------------      ------------
       TOTAL STOCKHOLDERS' EQUITY                                                20,019,021        20,786,641
                                                                               ------------      ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     $ 24,585,304      $ 26,269,759
                                                                               ============      ============

           See accompanying notes to consolidated financial statements

                                       -3-





                             THE QUIGLEY CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                      Three Months Ended
                                               March 31, 2004    March 31, 2003
                                               --------------    --------------

NET SALES                                        $  9,605,617      $  8,191,092
                                                 ------------      ------------

COST OF SALES                                       5,085,374         4,496,982
                                                 ------------      ------------

GROSS PROFIT                                        4,520,243         3,694,110
                                                 ------------      ------------

OPERATING EXPENSES:
      Sales and marketing                           1,623,066         1,527,530
      Administration                                2,750,499         2,441,720
      Research and development                        947,002           646,969
                                                 ------------      ------------
TOTAL OPERATING EXPENSES                            5,320,567         4,616,219
                                                 ------------      ------------

LOSS FROM OPERATIONS                                 (800,324)         (922,109)

INTEREST AND OTHER INCOME                              18,693            29,897
                                                 ------------      ------------


LOSS FROM CONTINUING OPERATIONS BEFORE TAXES         (781,631)         (892,212)
                                                 ------------      ------------

INCOME TAXES                                             --                --
                                                 ------------      ------------


LOSS FROM CONTINUING OPERATIONS                      (781,631)         (892,212)

DISCONTINUED OPERATIONS:
  Loss from discontinued operations                      --             (54,349)

                                                 ------------      ------------
NET LOSS                                         ($   781,631)     ($   946,561)
                                                 ============      ============

BASIC EARNINGS PER COMMON SHARE:
  Loss from continuing operations                ($      0.07)     ($      0.08)
  Loss from discontinued operations                      --                --
                                                 ------------      ------------
  Net loss                                       ($      0.07)     ($      0.08)
                                                 ============      ============
                                                 ============      ============

DILUTED EARNINGS PER COMMON SHARE:
  Loss from continuing operations                ($      0.07)     ($      0.08)
  Loss from discontinued operations                      --                --
                                                 ------------      ------------
  Net loss                                       ($      0.07)     ($      0.08)
                                                 ============      ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
      Basic                                        11,510,687        11,456,617
                                                 ============      ============

      Diluted                                      11,510,687        11,456,617
                                                 ============      ============

           See accompanying notes to consolidated financial statements

                                       -4-




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


                                                         Three Months Ended
                                                    March 31, 2004    March 31, 2003
                                                    --------------    --------------


NET CASH PROVIDED BY OPERATING ACTIVITIES            $  4,218,445      $    342,843
                                                     ------------      ------------

INVESTING ACTIVITIES:
  Capital expenditures                                    (37,943)          (58,603)
                                                     ------------      ------------

NET CASH FLOWS USED IN INVESTING
  ACTIVITIES                                              (37,943)          (58,603)
                                                     ------------      ------------

FINANCING ACTIVITIES:
  Proceeds from exercise of options and warrants           14,011
                                                     ------------      ------------

NET CASH FLOWS PROVIDED BY FINANCING
  ACTIVITIES                                               14,011
                                                     ------------      ------------

NET CASH PROVIDED BY DISCONTINUED
  OPERATIONS                                                 --             133,714
                                                     ------------      ------------


NET INCREASE IN CASH                                    4,194,513           417,954

CASH & CASH EQUIVALENTS, BEGINNING OF
  PERIOD                                               11,392,089        12,897,080
                                                     ------------      ------------

CASH & CASH EQUIVALENTS,
  END OF PERIOD                                      $ 15,586,602      $ 13,315,034
                                                     ============      ============


           See accompanying notes to consolidated 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,  and the
research and  development  of potential  prescription  products.  The Company is
organized  into three  business  segments  which are,  Cold  Remedy,  Health and
Wellness,  and Ethical  Pharmaceutical.  For the fiscal periods  presented,  the
Company's revenues have come from the Company's Cold Remedy business segment and
the Health and Wellness business segment.

Darius International Inc.,  ("Darius") a wholly owned subsidiary of the Company,
the Health and Wellness  segment,  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. 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.

The formation of Darius has provided  diversification to the Company in both the
method of product  distribution  and the broader range of products  available to
the  marketplace  serving as a balance  to the  seasonal  revenue  cycles of the
Cold-Eeze(R) branded products.

In January 2001, the Company formed an Ethical  Pharmaceutical Unit which is now
Quigley Pharma Inc.  ("Pharma"),  a wholly-owned  subsidiary of the Company, the
Ethical  Pharmaceutical  segment,  that is under the  direction of its Executive
Vice President and Chairman of its Medical Advisory Committee.  The formation of
Pharma  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"  which was
issued and extends  through  March 27, 2021.  The  establishment  of a dedicated
pharmaceutical   subsidiary  may  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.  At this time,
three  patents  have been  issued and  assigned to the  Company  resulting  from
research activity of Pharma.

During 2000, the Company acquired a 60% ownership  position in Caribbean Pacific
Natural Products, Inc. ("CPNP"), a leading developer and marketer of all-natural
sun-care and  skincare  products for luxury  resorts,  theme parks and spas.  In
December  2002,  the Board of Directors  of the Company  approved a plan to sell
CPNP. On January 22, 2003,  the Company  completed the sale of the Company's 60%
equity interest in CPNP to Suncoast Naturals, Inc. ("Suncoast").  See discussion
in Notes to Financial Statements, Note 3 - Discontinued Operations.

COLD REMEDY

Cold-Eeze(R),   a  zinc   gluconate   glycine   formulation   (ZIGG(TM))  is  an
over-the-counter  consumer  product  used to reduce the duration and severity of
the common cold and is sold in lozenge, sugar-free tablet and nasal spray forms.
During 2003 the Company  launched a Cold-EEZE(R)  nasal spray and  Kidz-EEZE(TM)
Sore Throat Pops. The nasal spray product,  a nasal spray  containing the active
ingredient  Zinc  Gluconate and also  containing  Aloe Vera,  began  shipping to
retail during the second half of 2003.

In May 1992,  the Company  entered into an  exclusive  agreement  for  worldwide
representation,  manufacturing,  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 and extensions are presently being marketed by the Company and also
through  independent  brokers and marketers in the United States under the trade
name Cold-Eeze(R). 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 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.


                                       -6-




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. 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 the adolescent study at the Heritage
School  facility.  In May 2003,  the Company  announced the study  findings of a
prospective study,  conducted at the Heritage School facility in Provo, Utah, in
which 178 children  ages 12 to 18 years were given  Cold-Eeze(R)  lozenges  both
symptomatically and  prophylactically  from October 5, 2001 to May 30, 2002. The
study found a 54% reduction in the most frequently observed cold duration. Those
subjects not receiving treatment most frequently experienced symptom duration at
11 days compared with 5 days when lozenges were  administered,  a reduction of 6
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.

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 United States Food and Drug
Administration ("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.  Because  Cold-Eeze(R) has been clinically  proven,  it offers a
significant  advantage over other suppliers in the over-the-counter  cold remedy
market.  Management of the Company believes there should be no 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.

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.

HEALTH AND WELLNESS

Darius,  through  Innerlight  Inc.,  its wholly  owned  subsidiary,  is a direct
selling company  specializing in the development and distribution of proprietary
health  and  wellness  products  primarily  within the  United  States  with the
commencement  of  international  business  activity during the second quarter of
2003.  The  Company   develops  and  markets  products  that  are  suitable  for
distribution within a direct selling business environment. The products marketed
and sold by Darius are herbal  vitamins  and dietary  supplements  for the human
condition.

Within the framework of a direct selling business environment,  Darius sells its
products through a network of independent representatives, who are not employees
of Darius.  These purchases by the independent  representatives  may be used for
personal   consumption  or  used  for  resale  to  consumers.   The  independent
representatives receive compensation for sales achieved by means of a commission
structure  or  compensation  plan  based on their  product  sales  and  those of
independent   representatives   within  their  down-line  network.   Independent
representatives  pay for product prior to shipment therefore accounts receivable
balances at any time are negligible.

                                       -7-




The continued  success of this segment is dependent,  among other things, on the
Company's ability:

o    To maintain existing  independent  representatives  and recruit  additional
     successful  independent  representatives.  Additionally,  the  loss  of key
     high-level distributors could negatively impact future growth and revenues;

o    To continue to develop and make available new and desirable  products at an
     acceptable cost;

o    To maintain  safe and  reliable  multiple-location  sources for product and
     materials;

o    To  maintain  a  reliable   information   technology  system  and  internet
     capability.  The  Company has  expended  significant  resources  on systems
     enhancements  in the past  and  will  continue  to do so to  ensure  prompt
     customer  response  times,   business  continuity  and  reliable  reporting
     capabilities.  Any  interruption to computer systems for an extended period
     of time could be harmful to the business;

o    To execute  conformity  with various  federal,  state and local  regulatory
     agencies both within the United States and abroad. With the commencement of
     international  business,  difficulties with foreign regulatory requirements
     could have a significant  negative  impact on future growth.  Any inquiries
     from  government  authorities  relating to our business and compliance with
     laws and regulations could be harmful to the Company;

o    To compete with larger more mature organizations  operating within the same
     market and to remain competitive in terms of product relevance and business
     opportunity;

o    To  successfully  implement  methods  for  progressing  the direct  selling
     philosophy internationally; and

o    To plan strategically for general economic conditions.

Any or all of the above risks could result in significant reductions in revenues
and profitability of the Health and Wellness segment.

ETHICAL PHARMACEUTICAL

Pharma's current activity is the development of  naturally-derived  prescription
drugs with the goal to improve  the  quality of life and health of those in need
through scientific research and development. Research and development will focus
on the identification,  isolation and direct use of active medicinal substances.
One aspect of Pharma's research will focus on the combination of isolated active
constituents and whole plant  components.  The search for new natural sources of
medicinal  substances  will  focus not only on world  plants,  fungi,  and other
natural substances, but an intense investigation into traditional medicinals and
historic therapeutics.

Pharma is currently  undergoing research and development  activity in compliance
with regulatory requirements. During the course of its research and development,
certain  formulae  have led to three  patents and several  patent  applications,
which the Patent Office of the United States  Commerce  Department has confirmed
the assignment to the Company.  The Company,  through Pharma,  is at the initial
stages of what may be a lengthy  process to  develop  these  patents  and patent
applications into commercial products.

The  pre-clinical  development,   clinical  trials,  product  manufacturing  and
marketing  of 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 or if the patents are not granted or if the patents
are subsequently challenged,  these possible events could have a material effect
on the business  and  financial  condition  of the Company.  The strength of the
Company's patent position may be important to its long-term  success.  There can
be no assurance  that these  patents and patent  applications  will  effectively
protect the Company's products from duplication by others.

Since the majority of the Company's  formulations'  components  are derived from
natural sources or are GRAS listed (Generally Regarded As Safe) as identified in
the Code of Federal  Regulations,  FDA approval  could  potentially  be obtained
earlier than what is normally required in the FDA process.

                                       -8-





The areas of focus are:

     o    A Patent (No.  6,555,573 B2) entitled  "Method and Composition for the
          Topical Treatment of Diabetic  Neuropathy." The patent extends through
          March 27, 2021.

     o    A Patent (No. 6,592,896 B2) entitled "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. The patent extends through August 6, 2021.

     o    A Patent (No.  6,596,313  B2)  entitled  "Nutritional  Supplement  and
          Method of Using It" for a product to relieve sialorrhea  (drooling) in
          patients suffering from Amyotrophic Lateral Sclerosis (ALS), otherwise
          known as Lou Gehrig's  Disease.  The patent extends  through April 15,
          2022.

     o    A Patent Application entitled  "Composition and Method for Prevention,
          Reduction  and Treatment of Radiation  Dermatitis"  was filed with the
          Patent Office of the United  States  Commerce  Department.  In January
          2004,  the Company  announced that it received a "Notice of Allowance"
          from the United  States  Patent and  Trademark  Office  following  the
          patent application.  A "Notice of Allowance" is sent by the Patent and
          Trademark  Office "if, on examination,  it appears that an application
          is entitled to a patent under the law"

     o    In September  2002,  the Company  filed a foreign  patent  application
          entitled "Method and Composition for the Topical Treatment of Diabetic
          Neuropathy" in Europe and other foreign markets.

In April 2002, the Company initiated a Phase II Proof of Concept Study in France
for treatment of diabetic neuropathy, which was concluded in 2003. In April 2003
the Company announced that an independently  monitored  analysis of the Phase II
Proof of Concept Study concluded that subjects using this formulation had 67% of
their  symptoms  improve,  suggesting  efficacy.  In  March  2004,  the  Company
announced  that it had completed its first meeting at the United States Food and
Drug  Administration  ("FDA") prior to submitting the Company's  Investigational
New Drug ("IND") application for the relief of symptoms of diabetic  symmetrical
peripheral  neuropathy.  The FDA's  pre-IND  meeting  programs  are  designed to
provide sponsors with advance guidance and input on drug development programs.

In July  2002,  the  Company  announced  the  commencement  of  testing on a new
formulation  being  developed  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.
In January 2004, a broad  anti-viral  compound was determined to be effective in
in-vitro and in-vivo studies for  applications  such as Influenza A&B, SARS, and
Herpes Simplex 1 and since this Sialorrhea  formulation is a derivative compound
of the anti-viral  formulation,  ongoing testing for this Sialorrhea compound is
being reconsidered and probably will be discontinued.

In September 2003, the Company announced its intention to file for permission to
study its  patent  pending  potential  treatment  for  psoriasis  and other skin
disorders.  Continued  testing will therefore have to be conducted  under an IND
application following positive preliminary results.

In December 2003, the Company  announced  positive test results of a preliminary
independent  in vitro  study  indicating  that a test  compound  of the  Company
previously tested on the Influenza virus showed "significant  virucidal activity
against a strain of the Severe  Acute  Respiratory  Syndrome  (SARS)  virus." In
January  2004 the  Company  announced  that it intends to  conduct  two  further
studies. The first study is intended to repeat the previously announced results,
which  demonstrated  the  compound to be 100  percent  effective  in  preventing
non-infected  ferrets in close  proximity  to an infected  ferret from  becoming
infected with the influenza A virus. The second study is a dose ranging study on
the test compound.  Upon dosage determination and confirmation results from this
forthcoming  animal  model study,  a human proof of concept  study using a virus
challenge with  Influenza A virus in a quarantine  unit can be the next step. In
January 2004 the Company also reported that its compound has shown virucidal and
virustatic  activity against the strain 3B of the Human  Immunodeficiency  Virus
Type 1 (HIV-1) in an in-vitro study. Based on these results, the Company intends
to proceed with a confirmatory in-vitro study with additional dilution levels to
fully explore the capabilities of the compound. Should the new study confirm the
previous results,  animal model studies will be considered as a next step in the
developmental process.

In April 2004, the Company announced the results of a preliminary,  pre-clinical
animal study,  which measured the effect of its proprietary,  patent applied for
formulation  against  the effects of ionizing  (nuclear)  radiation.  This study
determined that parenteral (injection)  administration of the study compound was
protective against the effects of a lethal,  whole body ionizing radiation dose,
in a mouse model. This compound is being  investigated to potentially reduce the
effects of radiation on humans.

                                       -9-




NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The Consolidated  Financial  Statements  include the accounts of the Company and
its wholly owned subsidiaries.  All inter-company transactions and balances have
been  eliminated.  Effective  March 31, 2004, the financial  statements  include
consolidated  variable  interest  entities  ("VIEs") of which the Company is the
primary beneficiary (See Note 7).

These financial  statements  have been prepared by management  without audit and
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto  included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2003. In the opinion of management, all adjustments necessary
for a fair  presentation of the consolidated  financial  position,  consolidated
results of operations and consolidated  cash flows,  for the periods  indicated,
have been made. Prior period amounts have been reclassified to conform with this
presentation.

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  included  assets  totaling  $536,000 and  liabilities  assumed
approximating  $416,000.  Also required were payments  totaling $540,000 for the
use of  product  formulations;  consulting;  confidentiality  and a  non-compete
agreement. To maintain the continuous application of these arrangements, fees of
5% on net sales  collected must be paid to the former owners and are expensed as
incurred. The operating results have been included in the Company's Consolidated
Statements of Operations from the date of acquisition. Prior to January 1, 2002,
the excess of cost over net assets  acquired had been subject to amortization on
a straight-line basis over a period of 15 years. Subsequent to 2001, the account
will only be reduced if the carrying amount becomes impaired.

During 2000, the Company acquired a 60% ownership  position in CPNP. In December
2002,  the Board of  Directors of the Company  approved a plan to sell CPNP.  On
January 22, 2003,  the Board of Directors of the Company  completed  the sale of
the Company's 60% equity interest in CPNP to Suncoast.  Results of CPNP prior to
January 22, 2003 are presented as  discontinued  operations in the  Consolidated
Statements of Operations. See discussion in Notes to Financial Statements,  Note
3 - Discontinued Operations.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent liabilities at the dates of the 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 included raw material amounts of approximately $485,000 and $729,000
at March 31, 2004 and December 31, 2003, respectively.

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.

                                      -10-




GOODWILL

Goodwill is not amortized but reviewed for impairment on an annual basis or when
events and circumstances indicate the carrying amount may not be recoverable.

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 four  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 a
significant percentage of sales volume, representing 18% and 23% of sales volume
for the three months periods ended March 31, 2004 and 2003, respectively.

Customers  comprising the five largest accounts receivable balances  represented
46% and 34% of total trade  receivable  balances at March 31, 2004 and  December
31, 2003, respectively.  During the three month period ended March 31, 2004, 92%
of the Company's net sales originated in the United States.

The Company uses separate  suppliers to produce  Cold-Eeze(R) in lozenge,  nasal
spray and sugar-free tablet form. The Company's revenues are currently generated
from the sale of Cold Remedy products and the Health and Wellness  segment.  The
lozenge form of Cold-Eeze(R)  is  manufactured  by a third party  manufacturer a
significant  amount of whose revenues are from 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 materials used in the production of the products are available from numerous
sources.  For the Cold-Eeze(R) lozenge product they are currently 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.

Darius' product for resale is sourced from several suppliers.  In the event that
such sources were no longer in a position to supply Darius with  product,  other
vendors have been identified as reliable  alternatives with minimal adverse loss
of business.

LONG-LIVED ASSETS

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
that an impairment  loss has occurred  based on the expected cash flows compared
to the related asset value, an impairment loss is recognized in the Statement of
Operations.

REVENUE RECOGNITION

Sales are recognized at the time ownership is transferred to the customer, which
for the Cold Remedy segment is the time the shipment is received by the customer
and for the  Health and  Wellness  segment,  when the  product is shipped to the
customer.  Sales returns and  allowances are provided for in the period that the
related  sales  are  recorded.  Provisions  for  these  reserves  are  based  on
historical experience.

                                      -11-




SHIPPING AND HANDLING

Product sales  relating to the Health and Wellness  products carry an additional
identifiable shipping and handling charge to the purchaser,  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 cost
of sales.

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. Stock options granted to employees vest immediately.

The Company  applies  Accounting  Principles  Board Opinion No. 25 ("APB 25") in
accounting  for its grants of options to employees.  Under the  intrinsic  value
method  prescribed  by APB 25, no  compensation  expense  relating  to grants to
employees  has been  recorded by the Company in periods  reported.  Compensation
expense for awards made during any periods  presented would be determined  under
the fair value method of Statement of Financial  Accounting Standards (SFAS) No.
123, "Accounting for Stock-Based Compensation."

Expense relating to warrants granted to  non-employees  have been  appropriately
recorded,  which  have been 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.

No stock  options were granted to  employees in the three months  periods  ended
March 31, 2004 or March 31,  2003.  During the first  quarter of 2003 a total of
250,000  warrants were granted to Forrester  Financial as part of an Amended and
Restated  Warrant  Agreement,  relating to consulting  services.  These warrants
expired  in  March  2004  without  being  exercised,  see  Note 6,  Transactions
Affecting Stockholders' Equity for further information.

ROYALTIES AND COMMISSIONS

The Company  includes  royalties  and founders  commissions  incurred as cost of
sales for the Cold Remedy segment and in administration  expenses for the Health
and  Wellness  segment  based on  agreement  terms.  Independent  representative
commissions  incurred by the Health and Wellness segment are included in cost of
sales.  Commission  expense related to independent  brokers  associated with the
Cold Remedy segment is included in administration expenses.

ADVERTISING

Advertising  costs are  expensed  within the period in which they are  utilized.
Advertising  expense is  comprised  of media  advertising,  presented as part of
sales and marketing expense; co-operative advertising, which is accounted for as
a deduction  from sales;  and bonus  product,  which is accounted for as part of
cost of sales.  Advertising  costs  incurred for the three months  periods ended
March 31, 2004 and 2003 were $1,209,572 and $1,116,019,  respectively.  Included
in prepaid  expenses and other  current  assets was $28,125 and $68,000 at March
31, 2004 and December 31, 2003,  respectively,  relating to prepaid  advertising
expenses.

RESEARCH AND DEVELOPMENT

Research and development costs are charged to operations in the period incurred.
Expenditures  for the three  months  periods  ended March 31, 2004 and 2003 were
$947,002 and $646,969, respectively. Principally, research and development costs
are related to Pharma's study activities and costs associated with Cold-Eeze(R).

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 discussion in Notes to Financial Statements, Note 8
- - Income Taxes.

                                      -12-





NOTE 3 - DISCONTINUED OPERATIONS

Effective  July 1, 2000, the Company  acquired a 60% ownership  position of CPNP
and was accounted for by the purchase  method of  accounting.  Accordingly,  the
operating  results  were  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, collateralized by inventory, accounts receivable and all
other assets of CPNP. The net assets of CPNP at the acquisition date principally
consisted of a product license and  distribution  rights with no recorded value,
inventory  and fixed assets of $312,915  and $510,000 of working  capital with a
contribution to minority interest of $329,166.

In December 2002, the Board of Directors of the Company  approved a plan to sell
CPNP. On January 22, 2003,  the Board of Directors of the Company  completed the
sale of the Company's 60% equity  interest in CPNP to Suncoast.  In exchange for
its 60% equity  interest in CPNP,  the Company  received:  (i) 750,000 shares of
Suncoast's  common stock,  which Suncoast has agreed,  at its cost and within 60
days from the closing,  to register  for public  resale  through an  appropriate
registration  statement  (this  registration  statement  has not  been  declared
effective by the Securities and Exchange  Commission) and (ii) 100,000 shares of
Suncoast's Series A Redeemable  Preferred Stock,  which bears interest at a rate
of 4.25% per annum and which is  redeemable  from time to time  after  March 31,
2003 in such  amounts  as is equal  to 50% of the free  cash  flow  reported  by
Suncoast in the immediately  preceding quarterly financial statements divided by
the redemption  price of $10.00 per share.  The Company owns 19.5% of Suncoast's
issued and  outstanding  capital  stock valued at $79,365,  which  investment is
accounted for on the cost basis method,  representing the Company's share of the
fair value of Suncoast at the time the transaction was recorded,  this amount is
included in Other Assets in the Consolidated Balance Sheets. During August 2003,
a  registration  statement  was  filed  but  an  effective  date  has  not  been
determined.  The disposal of CPNP was completed in order to allow the Company to
focus resources on other activities and clinical research and development.

Net Sales for CPNP for the three months ended March 31, 2003 were $59,824 with a
net loss of $54,349.

NOTE 4 - SEGMENT INFORMATION

The basis for  presenting  segment  results is consistent  with overall  Company
reporting.  The Company  reports  information  about its  operating  segments in
accordance  with  Financial   Accounting   Standard  Board  Statement  No.  131,
"Disclosure  About  Segments of an Enterprise  and Related  Information,"  which
establishes  standards for  reporting  information  about a company's  operating
segments. All consolidating items are included in Corporate & Other.

The  Company  has  divided  its  operations  into three  reportable  segments as
follows:   The  Quigley  Corporation  (Cold  Remedy),   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,   and  Quigley  Pharma  (Ethical
Pharmaceutical),  currently  involved in research  and  development  activity to
develop potential pharmaceutical products.

As discussed in Notes to Financial Statements, Note 3 - Discontinued Operations,
the Company disposed of its Sun-care and Skincare segment in January 2003.

Financial information relating to 2004 and 2003 operations, by business segment,
follows:

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

AS OF AND FOR THE THREE               Cold         Health and          Ethical          Corporate and
MONTHS ENDED MARCH 31, 2004          Remedy         Wellness        Pharmaceutical          Other                   Total
- --------------------------------------------------------------------------------------------------------------------------------

Net Sales
 Customers                         $4,113,592      $5,492,025             -                   -                   $9,605,617
Segment operating profit (loss)      (301,756)        436,780        ($935,348)               -                     (800,324)
Total Assets                      $23,035,977      $3,480,270             -             ($1,930,943)             $24,585,304

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

FOR THRE THREE MONTHS ENDED           Cold         Health and          Ethical          Corporate and
MARCH 31, 2003                       Remedy         Wellness        Pharmaceutical          Other                   Total
- --------------------------------------------------------------------------------------------------------------------------------

Net Sales
 Customers                         $3,258,267      $4,932,825             -                   -                   $8,191,092
Segment operating profit (loss)    (1,019,085)        663,253        ($566,277)               -                     (922,109)

TOTAL ASSETS AT DECEMBER 31,
2003                              $24,892,338      $3,881,970             -             ($2,504,549)             $26,269,759

                                      -13-




NOTE 5 - OTHER CURRENT LIABILITIES

Included in other  current  liabilities  are $750,310  and  $458,359  related to
accrued compensation at March 31, 2004 and December 31, 2003, respectively.

NOTE 6 - TRANSACTIONS AFFECTING STOCKHOLDERS' EQUITY

On  September 8, 1998,  the  Company's  Board of  Directors  declared a dividend
distribution of Common Stock Purchase Rights (the "Rights"),  thereby creating a
Stockholder  Rights  Plan  (the  "Plan").   The  dividend  was  payable  to  the
stockholders   of  record  on  September  25,  1998.  Each  Right  entitles  the
stockholder  of record to purchase from the Company that number of Common Shares
having a combined  market value equal to two times the Rights  exercise price of
$45. The Rights are not exercisable  until the distribution  date, which will be
the earlier of a public  announcement  that a person or group of  affiliated  or
associated persons has acquired 15% or more of the outstanding common shares, or
the announcement of an intention to make a tender or exchange offer resulting in
the  ownership of 15% or more of the  outstanding  common  shares by a similarly
constituted  party.  The dividend has the effect of giving the stockholder a 50%
discount on the share's  current market value for exercising  such right. In the
event of a cashless  exercise of the Right,  and the acquirer has acquired  less
than a 50% beneficial  ownership of the Company,  a stockholder may exchange one
Right for one common share of the Company.  The Final  Expiration of the Plan is
September 25, 2008.

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 until
March 31, 2004,  4,159,191 shares have been repurchased at a cost of $24,042,801
or an average cost of $5.78 per share. No shares were repurchased during 2004 to
date or 2003.

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 as of
March 7, 2002 for 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 Company's  financial  statements reflect a $1,125,000 non-cash charge
in 2002  resulting  from the  granting and  exercising  of these  warrants.  The
warrants have three exercise prices,  500,000 warrants  exercisable at $6.50 per
share,  which were exercised in May 2002 resulting in cash to the Company in the
amount of  $3,250,000,  250,000  warrants  exercisable  at $8.50 per share,  and
250,000  warrants  exercisable at $11.50 per share.  The warrants were initially
exercisable  until  the  earlier  to  occur  of (i)  March  6,  2003 or (ii) the
termination of the Consulting Agreement.

On December 7, 2002, Forrester commenced an action by a Writ of Summons filed in
the Court of Common Pleas of Bucks County,  PA against The Quigley  Corporation.
No Complaint  was filed  detailing  the claim of  Forrester  against The Quigley
Corporation.  This action was terminated  with prejudice by Forrester as part of
its Amended and Restated  Warrant  Agreement (the "Amended  Agreement)  with The
Quigley  Corporation  on February 2, 2003  whereby  certain  warrants  that were
scheduled to expire on March 7, 2003 were extended to March 7, 2004 (warrants to
purchase 250,000 shares at $8.50; warrants to purchase 250,000 shares at $11.50)
and are no longer  cancelable  by the  Company.  As an  additional  part of this
agreement, Forrester was granted warrants to purchase 250,000 shares at any time
until March 7, 2004 at the price of $9.50 a share.  As a result of this  Amended
Agreement  the  Company  recorded a further  non-cash  charge of $975,000 in the
fourth quarter of 2002,  amounting to a total expense of $2,100,000,  classified
as administrative expense in the Consolidated Statement of Operations,  relating
to this warrant agreement in 2002.  Additionally,  $975,000 was reflected in the
Consolidated  Balance Sheet at December 31, 2002, which represented the value of
the  unexercised  warrants and is included in accrued  liabilities.  On March 7,
2003 this liability was converted to equity. All warrants subject to the Amended
Agreement expired unexercised on March 7, 2004.


                                      -14-




NOTE 7 - VARIABLE INTEREST ENTITY

In December, 2003 the Financial Accounting Standards Board (FASB or the "Board")
issued FASB  Interpretation  No. 46 (revised  December 2003),  CONSOLIDATION  OF
VARIABLE INTEREST ENTITIES (FIN 46R), to address certain  implementation issues.
FIN 46R varies  significantly from FASB Interpretation No. 46,  CONSOLIDATION OF
VARIABLE  INTEREST  ENTITIES ("VIE") (FIN  46),  which  it  supersedes.  FIN 46R
requires the application of either FIN 46 or FIN 46R by "Public Entities" to all
Special  Purpose  Entities  ("SPEs")  at the end of the first  interim or annual
reporting  period ending after  December 15, 2003.  FIN 46R is applicable to all
non-SPEs created prior to February 1, 2003 by Public Entities that are not small
business  issuers  at the end of the first  interim or annual  reporting  period
ending after March 15, 2004.

Effective  March 31, 2004, the Company adopted FIN 46R for VIE's formed prior to
February 1, 2003. As a result of  consolidating  the VIE of which the Company is
the primary  beneficiary,  in the first quarter of 2004 the Company recognized a
minority interest of approximately  $58,000 in the Consolidated Balance Sheet at
March 31, 2004 which  represents  the  difference  between the fair value of the
assets and the liabilities recorded upon the consolidation of the VIE.

The liabilities recognized as a result of consolidating the VIE do not represent
additional claims on the Company's general assets, rather, they represent claims
against  the  specific  assets  of  the  consolidated  VIE.  Conversely,  assets
recognized as a result of  consolidating  this VIE do not  represent  additional
assets  that could be used to  satisfy  claims  against  the  Company's  general
assets.  Reflected in the Company's  March 31, 2004 balance sheet are $81,000 of
VIE assets,  representing  all of the  assets of the VIE.  The VIE  assists  the
Company in acquiring licenses and research and development activities in certain
countries.

NOTE 8 - 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 prior
years. Certain tax benefits for option and warrant exercises totaling $1,880,390
are 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 $47,520,526  attributed to options,  warrants and
unrestricted  stock  deductions  from taxable  income.  The net  operating  loss
carry-forwards arising from the option, warrant and stock activities approximate
$14.3 million for federal  purposes,  of which $3.5 million will expire in 2019,
$4.0 million in 2020, $6.8 million in 2022 and $14.5 million for state purposes,
of which $9.7  million  will  expire in 2009,  $3.0  million  in 2010,  and $1.8
million in 2012. 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 9 - 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  shared in the  earnings  of the  entity.  Diluted  EPS also
utilizes the treasury  stock method which  prescribes a theoretical  buy back of
shares from the  theoretical  proceeds of all options and  warrants  outstanding
during  the  period.  Since  there is a large  number of  options  and  warrants
outstanding,  fluctuations  in the  actual  market  price can have a variety  of
results for each period presented.

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

                                  Three Months Ended                    Three Months Ended
                                    March 31, 2004                         March 31, 2003
                              ------------------------------------------------------------------
                               Loss       Shares        EPS          Loss      Shares       EPS
                              ------------------------------------------------------------------

Basic EPS                     ($0.8)       11.5       ($0.07)       ($0.9)      11.5      ($0.08)
Dilutives:
Options/Warrants                 -           -                         -          -

                              ------------------------------------------------------------------
Diluted EPS                   ($0.8)       11.5       ($0.07)       ($0.9)      11.5      ($0.08)
                              ==================================================================

Options and warrants  outstanding  at March 31, 2004 and 2003 were 3,837,500 and
4,512,500,  respectively.  They were not included in the  computation of diluted
earnings for periods reporting losses because the effect would be anti-dilutive.

                                      -15-




NOTE 10 - RELATED PARTY TRANSACTIONS

An  agreement  between the Company and the  founders  Mr. Guy J. Quigley and Mr.
Charles A. Phillips,  both officers,  directors and stockholders of the Company,
was  entered  into  on June 1,  1995.  The  founders,  in  consideration  of the
acquisition  of the  Cold-Eeze(R)  cold  therapy  product,  are to share a total
commission of five percent (5%), on sales  collected,  less certain  deductions,
until the  termination  of this  agreement on May 31, 2005.  The amounts paid or
payable for the three  months  periods  ended March 31, 2004 and 2003 under such
founder's commission agreements were $165,104 and $152,724,  respectively,  such
expense is  included  in the cost of sales  classification  in the  Consolidated
Statements of  Operations.  Amounts  payable under such  agreements at March 31,
2004 and December 31, 2003 were  $147,583 and  $456,748,  respectively,  and are
represented in the accrued royalties and sales commission  classification in the
Consolidated Balance Sheets.

The Company is in the process of acquiring licenses in certain countries through
related party entities whose  stockholders  include Mr. Gary Quigley, a relative
of the  Company's  Chief  Executive  Officer.  Fees  amounting  to $109,520  and
$92,250,  respectively,  have  been paid to a related  entity  during  the three
months periods ended March 31, 2004 and 2003,  respectively,  to assist with the
regulatory  aspects of obtaining  such licenses and are included in the research
and  development  expense  classification  in  the  Consolidated  Statements  of
Operations.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

Certain  operating  leases for  office and  warehouse  space  maintained  by the
Company  resulted in rent expense for the three months  periods  ended March 31,
2004 and 2003 of $79,819 and $59,419,  respectively. The Company has approximate
future obligations over the next five fiscal years as follows:

                              Research and         Property
              Year             Development          Leases          Total
              -------------------------------------------------------------
              2004             $1,400,000          $179,000      $1,579,000
              2005                 -                203,000         203,000
              2006                 -                 98,000          98,000
              2007                 -                 57,000          57,000
              2008                 -                   -               -
              2009                 -                   -               -
              -------------------------------------------------------------
              Total            $1,400,000          $537,000      $1,937,000
              -------------------------------------------------------------

Additional  advertising  and research and  development  costs are expected to be
incurred for the remainder of 2004 and during 2005.

The Company also maintains a separate  representation and distribution agreement
relating to the development of the zinc gluconate  glycine product  formulation.
In return for exclusive  distribution rights, the Company must pay the developer
a 3% royalty and a 2%  consulting  fee based on sales  collected,  less  certain
deductions,   throughout  the  term  of  this   agreement,   expiring  in  2007.
Additionally,  a founder's  commission  totaling  5%, on sales  collected,  less
certain deductions,  is paid to two of the officers,  who are also directors and
stockholders of the Company,  and whose agreements  expire in 2005. The expenses
for the respective periods relating to such agreements  amounted to $330,209 and
$305,531  for  the  three  months   periods  ended  March  31,  2004  and  2003,
respectively.  Amounts accrued for these expenses at March 31, 2004 and December
31, 2003 were $295,875 and $915,109, respectively.

The Company has an  agreement  with the former  owners of the Utah based  direct
marketing and selling company, whereby they receive payments, currently totaling
5% of  net  sales  collected,  for  use  of  product  formulations,  consulting,
confidentiality and non-compete  agreements.  Amounts paid or payable under such
agreement  during the three  months  periods  ended March 31, 2004 and 2003 were
$217,638 and $212,086,  respectively.  Amounts  payable under such  agreement at
March 31, 2004 and December 31, 2003 were $78,104 and $68,388, respectively.

In August 2003,  the Company  entered into a licensing  agreement  with a patent
holder  relating to the utilization of a nasal spray product in the treatment of
symptoms of the common cold.  The Company  agreed to pay the patent holder a two
percent royalty on net sales of nasal spray products,  less certain  deductions,
throughout  the term of this  agreement,  expiring  no later  than  April  2014.
Amounts paid or payable under such agreement during the three month period ended
March 31, 2004 were $3,137,  with zero in the 2003  comparable  period.  Amounts
accrued or payable relating to this agreement at March 31, 2004 and December 31,
2003 were $4,750 and $1,613, respectively.

                                      -16-




                  PAIGE D. DAVISON VS. THE QUIGLEY CORPORATION

On  February  26,  2004,  the  plaintiff  filed an action  against  The  Quigley
Corporation  (the  "Company"),  which was not served  until  April 5, 2004.  The
action  alleges that the  plaintiff  suffered  certain  losses and injuries as a
result of using the Company's nasal spray product.  Among the allegations of the
plaintiff  are that the nasal spray was defective  and  unreasonably  dangerous,
lacked proper and adequate warnings and/or instructions, and was not fit for the
purposes and uses intended.

The Company has  investigated the claims and believes they are without merit. At
the  present  time the  matter  is being  defended  by the  Company's  liability
insurance carrier.

The Company  believes  plaintiff's  claims are without  merit and is  vigorously
defending those claims. Based upon the information the Company has at this time,
it believes the action will not have a material impact to the Company.  However,
at this time no prediction as to the outcome can be made.

NOTE 12 - RECENT ACCOUNTING PRONOUNCEMENTS

FIN 46R, CONSOLIDATION OF VARIABLE INTEREST ENTITIES -- AN INTERPRETATION OF ARB
51 (REVISED DECEMBER 2003)

In December, 2003 the Financial Accounting Standards Board (FASB or the "Board")
issued FASB  Interpretation  No. 46 (revised  December 2003),  CONSOLIDATION  OF
VARIABLE INTEREST ENTITIES (FIN 46R), to address certain  implementation issues.
FIN 46R varies  significantly from FASB Interpretation No. 46,  CONSOLIDATION OF
VARIABLE INTEREST  ENTITIES (FIN 46), which it supersedes.  FIN 46R requires the
application  of either FIN 46 or FIN 46R by  "Public  Entities"  to all  Special
Purpose  Entities  ("SPEs") at the end of the first interim or annual  reporting
period  ending after  December 15, 2003.  FIN 46R is  applicable to all non-SPEs
created prior to February 1, 2003 by Public Entities that are not small business
issuers at the end of the first interim or annual  reporting period ending after
March 15, 2004. The Company has determined that  Scandasystems,  a related party
(See note 7),  qualifies  as a  variable  interest  entity and the  Company  has
consolidated  Scandasystems beginning with the quarter ended March 31, 2004. Due
to the  fact  that the  Company  has no  long-term  contractual  commitments  or
guarantees, our maximum exposure to loss is insignificant.


                                      -17-




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

FORWARD-LOOKING STATEMENTS

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.

CERTAIN RISK FACTORS

The Company makes no representation  that the FDA or any other regulatory agency
will grant an Investigational New Drug ("IND") or take any other action to allow
its formulations to be studied or marketed.  Furthermore,  no claim is made that
potential medicine discussed herein is safe, effective,  or approved by the FDA.
Additionally,  data that demonstrates activity or effectiveness in animals or in
vitro tests do not necessarily mean the formula test compound, referenced herein
will be effective in humans.  Safety and effectiveness in humans will have to be
demonstrated  by means of adequate and well controlled  clinical  studies before
the clinical  significance of the formula test compound is known. Readers should
carefully  review the risk factors  described in other sections of the filing as
well as in  other  documents  the  Company  files  from  time to time  with  the
Securities and Exchange Commission.

OVERVIEW

The Company,  headquartered in Doylestown,  Pennsylvania,  is a leading marketer
and distributor of a diversified range of health and homeopathic products and is
also  involved  in  the  research  and  development  of  potential  prescription
products.

The Company's  business  interests  comprise three segments,  being Cold Remedy,
Health and Wellness and Ethical Pharmaceutical.

The Cold-Eeze(R)  product continues to be the primary product of the Cold Remedy
segment and is available in lozenge, sugar-free tablet and nasal spray form. The
Cold-Eeze(R)  Nasal Spray and the  Kidz-Eeze(TM)  Sore Throat products were both
launched in the third quarter of 2003 in  preparation  for the cold season.  The
efficacy of the Cold-Eeze(R)  product was established  following the publication
of the second  double blind study in July 1996. A 2002 study also found that the
use of Cold-Eeze(R) to treat a cold statistically reduced the use of antibiotics
for  respiratory  illnesses by 92% when  Cold-Eeze(R) is administered as a first
line treatment  approach to the common cold. In May 2003, the Company  announced
the findings of a prospective  study,  conducted at the Heritage School facility
in  Provo,  Utah,  in  which  178  children  ages  12 to  18  years  were  given
Cold-Eeze(R)  lozenges both symptomatically and prophylactically from October 5,
2001 to May 30, 2002.  The study found a 54%  reduction  in the most  frequently
observed cold duration.  Those subjects not receiving  treatment most frequently
experienced  symptom duration at 11 days compared with 5 days when lozenges were
administered, a reduction of 6 days.

Cold-Eeze(R)  is  distributed  through  numerous  independent,  chain  drug  and
discount stores throughout the United States. The Company reports increased cold
remedy net sales in the first  quarter of 2004  compared to the same period 2003
by 26.3%.  This  increase in net sales may be  attributable  to continued  sales
momentum  initiated by strong sales during the fourth  quarter 2003.  The strong
sales performance follows increased advertising during the 2003/2004 cold season
involving  strategic media  advertising,  continued product support at retail by
way of  co-operative  advertising  programs and bonus  product  promotions  that
benefit the consumer. The Company continues to use the services of an outsourced
nationwide brokerage network under the direction of the Company's internal sales
and  marketing  team.  In addition the Company  launched the  Cold-EEZE(R)  Cold
Remedy Nasal Spray and  Kidz-EEZE(TM)  Sore Throat Pops during the third quarter
2003  providing a benefit to the 2004  period as  compared to the  corresponding
2003 period.

Net sales relating to Darius, the Health and Wellness segment,  increased in the
first quarter of 2004 compared to 2003 by 11.3%.  This improvement was primarily
due  to  increases  in  the  number  of  independent   representatives  and  the

                                      -18-




development of international  markets with this market  providing  increased net
sales approximating $740,000 in 2004 over the 2003 comparable period. The Health
and Wellness segment has been effective in balancing the seasonality of the Cold
Remedy segment and producing a more  consistent  revenue  source  throughout the
fiscal year.

The establishment of an ethical  pharmaceutical  subsidiary,  Pharma, may 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.  During the course of 2003,  the Company was assigned  three
patents and filed three patent  applications,  two with the Patent Office of the
United  States  Commerce  Department  and one  within  the  European  Community.
Research and development  costs relating to projects being  undertaken by Pharma
increased in the first quarter 2004 by $298,559  over the prior year  comparable
period as a result of increased study activity in various areas of interest.

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.  The  distribution of product  relating to the
direct selling  segment is by means of independent  representatives  who are not
employees of the Company.

Manufacturing for all the Company's products is accomplished by outside sources.
The lozenge form is  manufactured by a third party  manufacturer,  a significant
part of this manufacturer's  revenues are from the Company, with the sugar-free,
nasal spray,  sore throat and health and  wellness  products  being  produced by
different manufacturers.

During the first three months of 2004, the Company  continued the process of the
registration  of the  Cold-Eeze(R)  products in the United Kingdom as a pharmacy
drug and incurred  approximately $109,520 in related expenses and is included in
the research and development expense classification.

Future revenues,  costs,  margins, and profits will continue to be influenced by
the Company's  ability to maintain its  manufacturing  availability and capacity
together with its  marketing  and  distribution  capabilities  and  requirements
associated  with the  development of Pharma's  potential  prescription  drugs in
order to  continue  to  compete  on a  national  and  international  level.  The
continued  expansion of Darius is dependent  on the Company  retaining  existing
independent  representatives  and  recruiting  additional  representatives  both
internationally  and  within  the  United  States;   continued  conformity  with
government  regulations;  a reliable  information  technology  system capable of
supporting  continued  growth and  continued  reliable  sources  for product and
materials to satisfy consumer demand.

During 2000, the Company acquired a 60% ownership  position in CPNP. In December
2002,  the Board of  Directors of the Company  approved a plan to sell CPNP.  On
January 22, 2003,  the Company  completed  the sale of the  Company's 60% equity
interest  in CPNP to  Suncoast.  Results of CPNP prior to January  22,  2003 are
presented  as  discontinued   operations  in  the  Consolidated   Statements  of
Operations.

EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS

FIN 46R, CONSOLIDATION OF VARIABLE INTEREST ENTITIES -- AN INTERPRETATION OF ARB
51 (REVISED DECEMBER 2003)

In December, 2003 the Financial Accounting Standards Board (FASB or the "Board")
issued FASB  Interpretation  No. 46 (revised  December 2003),  CONSOLIDATION  OF
VARIABLE INTEREST ENTITIES (FIN 46R), to address certain  implementation issues.
FIN 46R varies  significantly from FASB Interpretation No. 46,  CONSOLIDATION OF
VARIABLE INTEREST  ENTITIES (FIN 46), which it supersedes.  FIN 46R requires the
application  of either FIN 46 or FIN 46R by  "Public  Entities"  to all  Special
Purpose  Entities  ("SPEs") at the end of the first interim or annual  reporting
period  ending after  December 15, 2003.  FIN 46R is  applicable to all non-SPEs
created prior to February 1, 2003 by Public Entities that are not small business
issuers at the end of the first interim or annual  reporting period ending after
March 15, 2004. The Company has determined that  Scandasystems,  a related party
(See note 7),  qualifies  as a  variable  interest  entity and the  Company  has
consolidated  Scandasystems beginning with the quarter ended March 31, 2004. Due
to the  fact  that the  Company  has no  long-term  contractual  commitments  or
guarantees, our maximum exposure to loss is insignificant.


                                      -19-




CRITICAL 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  and is  also  involved  in  the  research  and
development of potential prescription products.  Certain key accounting policies
that may affect the results of the Company are the timing of revenue recognition
and sales incentives (including coupons,  rebates,  co-operative advertising and
discounts);  the classification of advertising  expenses;  and the fact that all
research and  development  costs are  expensed as  incurred.  Notes to Financial
Statements,  Note 1,  Organization  and Business,  describes the Company's other
significant accounting policies.

REVENUE RECOGNITION

Cold  Remedy  sales are  recognized  at the time  ownership  and risk of loss is
transferred  to the  customer,  which is  primarily  the time  the  shipment  is
received by the customer.  In the case of the Health and Wellness  segment sales
are recognized at the time goods are shipped to the customer.  Sales returns and
allowances  are provided for in the period that the related  sales are recorded.
Provisions for these reserves are based on historical experience.

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 bonus product,  which is accounted for as part of cost
of sales.  The level of  advertising  expense to be incurred is determined  each
period to coincide with management's sales and marketing strategies. Advertising
costs  incurred for the three months  periods ended March 31, 2004 and 2003 were
$1,209,572 and $1,116,019, respectively. This expense item increased in the 2004
three-month  reporting period due to strategic media  advertising in addition to
other trade related methods of advertising, necessary to promote and support the
Cold-Eeze(R) product.  Included in prepaid expenses and other current assets was
$28,125 and  $68,000 at March 31,  2004 and  December  31,  2003,  respectively,
relating to prepaid advertising expenses.

RESEARCH AND DEVELOPMENT

Research and  development  costs are charged to operations in the year incurred.
Expenditures  for the three  months  periods  ended March 31, 2004 and 2003 were
$947,002 and $646,969,  respectively.  Principally,  research and development is
part of the product  research costs related to Pharma and study costs associated
with  Cold-Eeze(R).  Expenditure  for 2003 also included study costs relating to
Cold-EEZE(R) Cold Remedy Nasal Spray.  Pharma is currently  involved in research
activity  that is  expected  to  increase  significantly  over  time as  product
research and testing  progresses.  The Company is at the initial  stages of what
may be a lengthy process to develop potential commercial prescription products.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH SAME PERIOD 2003

Net sales for the three  months  period  ended March 31,  2004 were  $9,605,617,
reflecting  an increase of 17.3% over the  comparable  three months period ended
March 31, 2003 net sales of  $8,191,092.  The Cold Remedy  segment  reported net
sales  in 2004 of  $4,113,592,  an  increase  of  $855,325  or  26.3%  over  the
comparable 2003 period of $3,258,267;  the Health and Wellness  segment reported
net sales in 2004 of  $5,492,025,  an  increase  of  $559,200  or 11.3% over the
comparable 2003 period net sales of $4,932,825.

The increased Cold Remedy segment sales in 2004 may be attributable to the sales
momentum  generated during the strong sales performance of the fourth quarter of
2003.   Management  has  continued  the  strategy  of  strong  support  for  the
Cold-Eeze(R)   product  through   strategic  media   advertising,   co-operative
advertising  with  customers  and bonus  programs  that  benefit  the  consumer.
Additionally, the net sales results of the Cold Remedy segment in 2004 have been
supported by sales  activity of the  Cold-EEZE(R)  Nasal Spray and the Kidz-EEZE
Sore Throat  products  both of which were  launched  during the third quarter of
2003.


                                      -20-




The increased net sales reported by the Health and Wellness  segment in 2004 may
be attributable to increasing international net sales contributing approximately
$762,000 during the first quarter of 2004 compared to approximately  $24,000 for
the 2003 comparable period.

Cost of sales as a percentage  of net sales for the three months ended March 31,
2004 was 52.9% compared to 54.9% for the comparable 2003 period. The decrease in
the percentage of 2% in the 2004 period is due to: the absence of a royalty cost
associated  with the sore throat product and a reduced  royalty cost relating to
the nasal spray  product,  as both of these  products were launched in the third
quarter of 2003  resulting  in a benefit  to the 2004  margin;  the 2004  period
included  reduced  costs  relating to product bonus  programs.  The 2004 cost of
sales  percentage of the Health and Wellness  segment was reduced as a result of
variations  in the  payout  percentage  to  independent  representatives  due to
ongoing marketing and promotional initiatives, along with increased product cost
due to product mix and the impact of international sales activity.

Sales and marketing expense for the three months period ended March 31, 2004 was
$1,623,066,  an increase of $95,536 over the  comparable  2003 period  amount of
$1,527,530.  The  increase  between the periods was  primarily  due to increased
media  advertising  related to the Cold  Remedy  segment  of $53,228  along with
increased  meeting and conventions  costs of the Health and Wellness  segment of
$26,851 during the 2004 three-month period.

General and  administration  costs for the three  months  period ended March 31,
2004 was $2,750,499  compared to $2,441,720  during the 2003 period, an increase
of $308,779  between the  periods.  The  increase in 2004 was  primarily  due to
increased wages and salaries of $172,463,  increased legal costs of $70,173, and
increased insurance costs of $36,000.

Research and development costs during the three months ended March 31, 2004 were
$947,002  compared to $646,969 during the 2003 comparable  period  reflecting an
increase in 2004 of $300,033.  The  increase in Pharma  study costs  between the
periods was $298,559 thereby being the primary reason for the increase.

During 2004, the Company's  major operating  expenses of salaries,  consultancy,
Pharma study costs, brokerage  commissions,  promotion,  advertising,  and legal
costs  accounted for  approximately  $4,172,205  (78.4%) of the total  operating
expenses of $5,320,567,  an increase of 18.3% over the 2003 amount of $3,526,686
(76.4%) of total  operating  expenses of  $4,616,219.  The selling,  general and
administrative  expenses  related to Health and  Wellness for 2004 and 2003 were
$1,350,613 and $985,498, respectively,  reflecting increased expenditure in 2004
necessary to support the growth of this segment.

Total  assets  of the  Company  at March 31,  2004 and  December  31,  2003 were
$24,585,304 and $26,269,759, respectively. Working capital decreased by $682,650
to  $17,574,704  at March 31, 2004.  The primary  influences on working  capital
during  the first  quarter  of 2004  were:  the  increase  in cash  balances  of
$4,194,513,  which was assisted by effective account collections as reflected in
account receivable  balances  decreasing by $5,784,308;  accrued advertising and
royalties and commissions  balances decreased by a combined amount of $1,257,038
due to the slow down in sales activity as a result of the conclusion of the cold
season.

LIQUIDITY AND CAPITAL RESOURCES

The Company had working capital of $17,574,704 and $18,257,354 at March 31, 2004
and December 31, 2003,  respectively.  Changes in working  capital  overall have
been  primarily  due  to  the  following  items:  cash  balances   increased  by
$4,194,513;   accounts  receivable  decreased  by  $5,784,308  due  to  seasonal
fluctuations;  accrued  advertising  decreased  by  $507,928  as a result of the
seasonality  of the cold remedy  products and related  co-operative  advertising
activity;  royalties  and sales  commissions  liabilities  decreased by $749,110
related to the cold-season  cycle and the effect of such  seasonality on account
receivables;  and other current  liabilities  increased by $135,798.  Total cash
balances at March 31, 2004 were $15,586,602  compared to $11,392,089 at December
31, 2003, the increase in cash was due to the movements in working capital.

Management  believes that its revised  strategy to establish  Cold-Eeze(R)  as a
recognized   brand  name,  its  broader  range  of  products,   its  diversified
distribution  methods as it relates to the Health and Wellness business segment,
adequate manufacturing capacity, 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  and its  subsidiaries  may in the short and long term
raise capital through the issuance of equity  securities to finance  anticipated
growth.


                                      -21-




Management is not aware of any trends,  events or uncertainties that have or are
reasonably  likely to have a material  negative  impact upon the  Company's  (a)
short-term  or long-term  liquidity,  or (b) net sales,  revenues or income from
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.

Management  believes that cash generated from operations  along with its current
cash  balances  will be  sufficient  to  finance  working  capital  and  capital
expenditure requirements for at least the next twelve months.

OFF-BALANCE SHEET ARRANGEMENTS

It is not the Company's usual business  practice to enter into off-balance sheet
arrangements   such  as   guarantees   on  loans  and   financial   commitments,
indemnification arrangements,  and retained interests in asset transferred to an
unconsolidated entity for securitization purposes. Consequently, the Company has
no off-balance sheet  arrangements that have, or is reasonably likely to have, a
material  current  or  future  effect on its  financial  condition,  changes  in
financial  condition,  revenues or expenses,  results of operations,  liquidity,
capital expenditures or capital resources.

CAPITAL EXPENDITURES

Since the  Company's  products  are  manufactured  by outside  sources,  capital
expenditures during the remainder of 2004 are not anticipated to be material.

IMPACT OF INFLATION

The Company is subject to normal  inflationary  trends and anticipates  that any
increased costs should be passed on to its customers.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's  operations are not subject to risks of material  foreign currency
fluctuations, nor does it use derivative financial instruments in its investment
practices.  The Company  places its marketable  investments in instruments  that
meet high credit quality standards.  The Company does not expect material losses
with respect to its investment  portfolio or exposure to market risks associated
with interest rates. The impact on the Company's results of one percentage point
change in  short-term  interest  rates  would not have a material  impact on the
Company's future  earnings,  fair value, or cash flows related to investments in
cash equivalents or interest earning marketable securities.

ITEM 4. CONTROLS AND PROCEDURES

Based on their  evaluation,  as of the end of the period covered by this report,
the Company's Chief Executive Officer and Chief Financial Officer have concluded
the Company's disclosure controls and procedures (as defined in Rules 13a-14 and
15d-14 under the Securities Exchange Act of 1934) are effective. There have been
no  significant  changes in  internal  controls or in other  factors  that could
significantly  affect these controls subsequent to the date of their evaluation,
including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.


                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

                  PAIGE D. DAVISON VS. THE QUIGLEY CORPORATION

On  February  26,  2004,  the  plaintiff  filed an action  against  The  Quigley
Corporation  (the  "Company"),  which was not served  until  April 5, 2004.  The
action  alleges that the  plaintiff  suffered  certain  losses and injuries as a
result of using the Company's nasal spray product.  Among the allegations of the
plaintiff  are that the nasal spray was defective  and  unreasonably  dangerous,
lacked proper and adequate warnings and/or instructions, and was not fit for the
purposes and uses intended.

                                      -22-





The Company has  investigated the claims and believes they are without merit. At
the  present  time the  matter  is being  defended  by the  Company's  liability
insurance carrier.

The Company  believes  plaintiff's  claims are without  merit and is  vigorously
defending those claims. Based upon the information the Company has at this time,
it believes the action will not have a material impact to the Company.  However,
at this time no prediction as to the outcome can be made.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

    (1)  31.1    Certification  by  the  Chief  Executive  Officer  Pursuant  to
                 Section 302 of the Sarbanes-Oxley Act of 2002
    (2)  31.2    Certification  by  the  Chief  Financial  Officer  Pursuant  to
                 Section 302 of the Sarbanes-Oxley Act of 2002
    (3)  32.1    Certification  by  the  Chief  Executive  Officer  Pursuant  to
                 Section 906 of the Sarbanes-Oxley Act of 2002
    (4)  32.2    Certification  by  the  Chief  Financial  Officer  Pursuant  to
                 Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

    The Company filed a Form 8-K dated February 26, 2004  announcing its results
    for the quarter ended  December 31, 2003.  The  information  on Form 8-K was
    furnished pursuant to Item 12 of Form 8-K as directed by the U.S. Securities
    and Exchange Commission in Release No. 34-47583.

    There were no other  Current  Reports on Form 8-K filed  during the  quarter
    ended March 31, 2004.


                                      -23-




                                   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: May 12, 2004


                                      -24-

EX-31.1

                                                                   EXHIBIT  31.1


                             THE QUIGLEY CORPORATION
                              a Nevada corporation
                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

                            Section 302 Certification

I, Guy J. Quigley, certify that:

1.  I  have  reviewed  this  quarterly  report  on  Form  10-Q  of  The  Quigley
Corporation, a Nevada corporation (the "registrant");

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

    a)  designed  such  disclosure  controls  and  procedures,  or  caused  such
    disclosure controls and procedures to be designed under our supervision,  to
    ensure that material information  relating to the registrant,  including its
    consolidated  subsidiaries,  is made  known  to us by  others  within  those
    entities,  particularly  during the period in which this quarterly report is
    being prepared;

    b) evaluated the effectiveness of the registrant's  disclosure  controls and
    procedures and presented in this quarterly report our conclusions  about the
    effectiveness  of the disclosure  controls and procedures,  as of the end of
    the period covered by this report based on such evaluation; and

    c) disclosed in this report any change in the registrant's  internal control
    over financial  reporting that occurred during the registrant's first fiscal
    quarter that has materially affected,  or is reasonably likely to materially
    affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):

    a) all  significant  deficiencies  and material  weaknesses in the design or
    operation of internal control over financial  reporting which are reasonably
    likely to  adversely  affect the  registrant's  ability to record,  process,
    summarize and report financial information; and

    b) any fraud,  whether or not material,  that  involves  management or other
    employees who have a significant role in the  registrant's  internal control
    over financial reporting.


Date: May 12, 2004


                                           By: /s/ Guy J. Quigley
                                               -------------------------------
                                               Guy J. Quigley
                                               Chief Executive Officer

EX-31.2

                                                                    EXHIBIT 31.2


                             THE QUIGLEY CORPORATION
                              a Nevada corporation
                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

                            Section 302 Certification


I, George J. Longo, certify that:

1.  I  have  reviewed  this  quarterly  report  on  Form  10-Q  of  The  Quigley
Corporation, a Nevada corporation (the "registrant");

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

    a)  designed  such  disclosure  controls  and  procedures,  or  caused  such
    disclosure controls and procedures to be designed under our supervision,  to
    ensure that material information  relating to the registrant,  including its
    consolidated  subsidiaries,  is made  known  to us by  others  within  those
    entities,  particularly  during the period in which this quarterly report is
    being prepared;

    b) evaluated the effectiveness of the registrant's  disclosure  controls and
    procedures and presented in this quarterly report our conclusions  about the
    effectiveness  of the disclosure  controls and procedures,  as of the end of
    the period covered by this report based on such evaluation; and

    c) disclosed in this report any change in the registrant's  internal control
    over financial  reporting that occurred during the registrant's first fiscal
    quarter that has materially affected,  or is reasonably likely to materially
    affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):

    a) all  significant  deficiencies  and material  weaknesses in the design or
    operation of internal control over financial  reporting which are reasonably
    likely to  adversely  affect the  registrant's  ability to record,  process,
    summarize and report financial information; and

    b) any fraud,  whether or not material,  that  involves  management or other
    employees who have a significant role in the  registrant's  internal control
    over financial reporting.

Date: May 12, 2004


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

EX-32.1

                                                                    EXHIBIT 32.1



                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.ss.1350)


Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002 (18 U.S.C.  ss.1350),
the  undersigned,  Guy J. Quigley,  the Chief  Executive  Officer of The Quigley
Corporation,  a Nevada corporation (the "Company"),  does hereby certify, to his
knowledge, that:

The  Quarterly  Report on Form 10-Q for the quarter  ended March 31, 2004 of the
Company (the "Report") fully complies with the  requirements of section 13(a) or
15(d) of the Securities  Exchange Act of 1934, and the information  contained in
the Report fairly presents,  in all material respects,  the financial  condition
and results of operations of the Company.



                                        /s/  Guy J. Quigley
                                        -------------------------------
                                        Guy J. Quigley
                                        Chief Executive Officer
                                        May 12, 2004

EX-32.2

                                                                    EXHIBIT 32.2


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.ss.1350)


Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002 (18 U.S.C.  ss.1350),
the  undersigned,  George J. Longo,  the Chief Financial  Officer of The Quigley
Corporation,  a Nevada corporation (the "Company"),  does hereby certify, to his
knowledge, that:

The  Quarterly  Report on Form 10-Q for the quarter  ended March 31, 2004 of the
Company (the "Report") fully complies with the  requirements of Section 13(a) or
15(d) of the Securities  Exchange Act of 1934, and the information  contained in
the Report fairly presents,  in all material respects,  the financial  condition
and results of operations of the Company.


                                           /s/ George J. Longo
                                           ----------------------------
                                           George J. Longo
                                           Chief Financial Officer
                                           May 12, 2004