October 22, 1996
US Securities & Exchange Commission,
450 Fifth Street, N.W.
Washington, DC 20549
RE: THE QUIGLEY CORPORATION ("REGISTRANT")
FORM 10-QSB - PERIOD ENDED JUNE30, 1996
Dear Sir:
Herewith attached is Registrant's Form 10-Q, please kindly acknowledge
receipt of the transmision received.
Sincerely,
/s/ Guy Quigley
- ---------------
Guy Quigley
President
cc: William Reilly Esq.
Nathhan Blumenfrucht CPA
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB
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[XX] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number: 33-36934
THE QUIGLEY CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 23-2577138
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
(MAILING ADDRESS: PO Box 1349, Doylestown, PA 18901.)
Landmark Building, 10 South Clinton Street,
Doylestown, PA 18901
(Address of principle executive offices) (Zip Code)
(215) 345-0919
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by the 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. [XX] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's class of common stock, as of the latest
practicable date. The number of shares outstanding of each of the
registrant's classes of common stock, as of June 30, 1996 is 4,188,765
shares, all of one class of $.001 par value common stock.
-1-
TABLE OF CONTENTS
Page No
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements ................................. 3-11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ........ 12-13
PART II - OTHER INFORMATION
Item 3. Legal Proceedings ...................................... 14
Item 2. Changes in Securities .................................. 14
Item 3. Defaults Upon Senior Securities ........................ 14
Item 4. Submission of Matters to a Vote of Security Holders .... 14
Item 5. Other Information ...................................... 14
Item 6. Exhibits and Reports on Form 8-K ....................... 14
Signatures ..................................................... 15
-2-
THE QUIGLEY CORPORATION
BALANCE SHEETS
As of the dates indicated
June 30 September 30
1996 1995
---------- ----------
ASSETS
Current Assets
Cash ................................................. $ 85,795 ($132,739)
Accounts Receivable .................................. 91,521 135,983
Notes Receivable ..................................... 67,953
64,659
Inventory ............................................ 60,250 82,437
Due From Escrow -Note 1(a) ........................... 9,000 9,000
Prepaid expense ...................................... 3,709 4,468
---------- ----------
TOTAL CURRENT ASSETS ................................... 318,228 429,286
FIXED AND OTHER ASSETS
Fixed Assets (Net of Accumulated Depreciation) ....... 40,964 36,884
Intangible Asset - (net of accumulated Amortization) . 0 0
Deposits ............................................. 3,347 3,310
Deferred taxes ....................................... 29,471 29,471
---------- ----------
TOTAL FIXED AND OTHER ASSETS ........................... 73,782 69,665
TOTAL ASSETS ........................................... $392,010 $ 498,951
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ..................................... $ 1,002 $ 5,677
Accrued expenses payable ............................. 70,000 70,000
Loan and note payable-Note 1(j)[i+ii] ................ 4,013 4,453
---------- ----------
TOTAL CURRENT LIABILITIES .............................. 75,015 80,130
NON CURRENT LIABILITIES
Auto loan payable-non current portion ................ 10,699 13,706
Restricted stock sold under put option
42,000 common stock -Note 6 (m) ...................... 44,100 44,100
STOCKHOLDERS' EQUITY (DEFICIT) -
Common Stock, $.001 par value; authorized
25,000,000 issued and outstanding
4,188,766 shares ..................................... 3,361 3,361
Additional paid-in capital ........................... 2,544,662 2,466,632
Retained Deficit ..................................... (2,285,827) (2,108,978)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ................... 262,196 361,015
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' .................... $ 392,010 $ 498,951
EQUITY (DEFICIT) ========== ==========
See accompanying notes
-3-
THE QUIGLEY CORPORATION
STATEMENTS OF OPERATIONS
For the periods indicated
Nine months Nine months Three months Three months
ended ended ended ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
NET SALES ............................. $ 323,726 $ 405,106 $ 69,496 $ 247,036
COST OF GOODS SOLD .................... 71,827 147,311 20,953 81,993
---------- ---------- ---------- ----------
GROSS PROFIT .......................... 251,899 257,785 48,543 165,043
GENERAL AND ADMINISTRATION EXPENSES .. 430,704 455,428 144,383 115,045
---------- ---------- ---------- ----------
SUBTOTAL .............................. (178,805) (197,633) (95,840) 49,998
ADD: OTHER INCOME (Interest) .......... 1,956 0 678 0
PROVISION FOR CORPORATE INCOME TAX .... 0 (1,300) 0 (400)
---------- ---------- ---------- ----------
NET PROFIT (LOSS) ..................... (176,849) (196,333) (95,162) 50,398
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF ............ 4,188,766 31,725,604 4,188,766 31,725,604
COMMON SHARES OUTSTANDING
NET PROFIT (LOSS) PER SHARE
(LESS THAN ONE CENT PER SHARE) (NOTE 7) $ (.00) $ (.00) $ (.00) $ (.00)
========== ========== ========== ==========
See accompanying notes
-4-
THE QUIGLEY CORPORATION
STATEMENTS OF CASH FLOWS
For the nine months
June 30
1996 1995
---------- -----------
Net income (loss) .................................... $(176,849) $ (16,494)
Adjustments to reconcile net loss to
net cash used by operating activities
Non-cash items included in loss:
Amortization and Depreciation ..................... 0 1,500
Change in assets and liabilities:
Accounts receivable ............................... 44,462 (118,000)
Inventory ......................................... 22,187 (67,923)
Escrow ............................................ 0 (13,673)
Note Receivable ................................... (3,294) 0
Current Asset ..................................... 759 0
Fixed and other Assets ............................ 0 0
Current liabilities ............................... (3,007) 0
Deferred taxes .................................... 0 (4,700)
Deposits .......................................... (37) 0
Accounts payable and accrued expenses ............. (25,370) 5,115
Cash Used by Operations .............................. (110,664) (244,660)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed and other assets ................ (4,080) 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of Restricted Common Stock [Reg. D - 504 .... 66,950 263,588
offering] ............................................ 0 (11,240)
Loans and Notes payable
Paid stock options ................................ 850 0
NET INCREASE (DECREASE) IN CASH ...................... (46,944) 7,688
---------- ----------
CASH AT BEGINNING OF PERIOD .......................... 132,739 4,622
---------- -----------
CASH AT END OF PERIOD ................................ $ 85,795 $ 12,310
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-5-
THE QUIGLEY CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and operations
The Quigley Corporation (the "Company") was organized under the laws
of the state of Nevada on August 24, 1989. The Company started business
October 1, 1989. The Company has been engaged in the business of marketing
health food products and a common cold therapy. The collective products are
fully developed and are being offered to the general public through
distributors, brokers, mail order and network marketing. For the fiscal
year ended September 30, 1995, the Company had revenues of approximately
$500,000.00 from the sale of these products. For the most recent fiscal
period, the Company continues to concentrate its efforts in the promotion
of its major product "Cold-Eeze ". This has resulted in reduced sales and
marketing of its other health food products. The "Cold-Eeze " product has a
higher gross profit percentage than its other products. Management believes
that it can generate enough revenue in the next twelve months to sustain
the Company. Management is also pursuing additional financing through
various methods.
The Company has realized a significant increase in current assets for
the period ended December 31, 1995. This is due to a consequential increase
in sales of the Company's Cold-Eeze(TM) line, which has resulted in an
increase of $76,317 in accounts receivable. The increase in sales is also
accountable for the EXPANSION in inventory as of December 31, 1995, to
accommodate pending purchase orders. In addition, the Company had a notable
cash balance due to the sale of stock. The note due from a shareholder from
the sale of stock under a Regulation "D", 504 offering and the amount due
from escrow, is moneys held by corporate council from the sale of stock
under the same Regulation "D", 504 offering.
(b) Revenue
Revenue is recognized from product sales when the product is shipped
using the accrual basis of accounting.
(c) Accounts Receivable
The direct write off method of accounting for bad debts is utilized
and there is no allowance for doubtful accounts. As of December 31,
1995, the Company has outstanding receivables.
(d) Inventory
Inventory is stated at the lower of cost or market. Cost is determined
by the first in, first out method.
(e) Fixed Assets
Fixed Assets are reflected on the accompanying statements at cost less
accumulated depreciation. The straight line method of depreciation is
used utilizing a life of five years for machinery and equipment and a
life of seven years for furniture and fixtures.
(f) Deposits
Deposits are principally comprised of rent security and the related
accrued interest.
(g) Income Taxes
Effective October 1, 1993, the Company changed its method of
accounting for income tax to comply with SFAS No. 109, "Accounting for
Income Taxes". The Company has suffered net losses since inception and
has a NOL carry forward of approximately $790,000. Using a 15% income
tax rate results in a deferred tax asset of approximately $118,500. A
valuation allowance of $89,029 was established to reduce deferred tax
assets to amounts expected to be realized. This resulted in a net
deferred tax asset of $29,471. Of this $5,945 was derived from the
current year's NOL
-6-
THE QUIGLEY CORPORATION
NOTES TO FINANCIAL STATEMENTS
(after provision for the valuation allowance). This amount was
credited to provision for Corporate Income tax. Of the total tax asset
$21,564 represented prior years tax benefits, before the adoption by
the Company of SFAS No.109. This credit was reported as a Cumulative
Effect Adjustment on the Statement of Operations for the prior period.
(h) Fiscal Year
The Company's fiscal year ends September 30th.
(i) Expenses Incurred Without Cost
Certain expenses were incurred without cost. For the fiscal years
ended September 30, 1994 and 1993, these costs were for officers'
salaries. The corresponding were charged on the statement of
operations and additional paid-in capital was credited for such
amounts.
(j) Loans & Notes Payable
(i) As of September 30, 1995, the amount due to officers was $440. The
loan is non interest bearing and is payable on demand. This amount was
settled during the period ending March 31, 1996.
(ii) The Company purchased an automobile and financed part of the
purchase through a bank loan. The total amount financed was $15,324 at
the approximate rate of 11%, for a period of 60 months. As of
September 30, 1995, approximately $17,700 was owed, which was
segregated on the balance sheet between current and non current
liabilities.
NOTE 2 - MANAGEMENT'S PLANS
Due to the significant increase in sales and the projected future
increased sales, it is management's belief that enough cash will be
generated from sales in the next twelve months to sustain the Company in
the support its operations. In addition the Company continues to offer
shares under its 504 offering and is contemplating other equity offerings.
NOTE 3 - LEASE COMMITMENTS
Operating Leases - The Company has a lease agreement on its office
space which expires in January 1998, with an option for a further year at a
rental of $1,5567.00 per calendar month. There is no lease agreement on its
warehouse space and the Company occupies the premises on a month to month
basis. The following table represents the future minimum rent payment
required under all operating leases with terms in excess of one year as of
September 30, 1995.
Fiscal Year Ended
1996 $16,440
1997 16,440
1998 5,677
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$38,557
Capital Leases - The Company has a current lease on copying equipment
at a monthly cost of $107.99 which commenced on October 31, 1995 and
expires on October 31, 1997
NOTE 4 - PREPAID EXPENSES
In the prior fiscal period, prepaid expenses represented interest paid
on an automobile loan.
-7-
THE QUIGLEY CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - INTANGIBLE ASSET
Intangible asset consists of $430 of organization costs which was
amortized over a five year period, using the straight line method. As of
September 30, 1994, the asset has been completely amortized.
NOTE 6 - CAPITALIZATION
(a) On September 25, 1989, the Company issued 43,000,000 shares, par value
$.0001, to various individuals. The authorized capital stock of the
Company consists of 100,000,000 shares of Common Stock, par value
$.0001 per share.
(b) In June 1990, the Company had a reverse stock split. The 43,000,000
shares were converted to 15,693,420 shares.
(c) On August 17, 1990, Arnow and Frasco Management Group purchased
300,000 restricted shares of Common Stock from the Company for
$30,000. This restriction has now been lifted.
(d) The Board of Directors authorized the sale through an underwriter of a
minimum of 2,000,000 Units and maximum of 3,000,000 Units at $.15 per
Unit. Each Unit consisted of one common share (par value $.0001), and
one Class A and one Class B and one Class C Redeemable Common Stock
Purchase Warrant. Each Redeemable Common Stock Purchase Warrant is
immediately detachable and may be traded separately on the basis of
one warrant evidencing the right to purchase one share of common
stock. Each Redeemable Class A Warrant entitles the holder to purchase
one share of common stock at the price of $.25 per share for a
twenty-four month period commencing February 7, 1991. Each Redeemable
Class B Warrant entitles the holder to purchase one share of common
stock at the price of $.50 per share for thirty-six month period
commencing February 7, 1991. Each Redeemable Class C Warrant entitles
the holder to purchase one share of common stock at the price of $.75
per share for a forty-eight month period commencing February 7, 1991.
On December 29, 1992 the Company's Board of Directors voted to extend
the Class A Warrant exercise period for an additional six months to
August 7, 1993 under the same terms. On June 7, 1993 the Company's
Board of Directors voted to extend the Class A, Class B and Class C
warrant until February 7, 1994 under the same terms and conditions. On
December 21, 1994 the Company's board of directors voted to extend the
Class A, Class B and Class C warrants under the same terms and
conditions, expiring on January 31, 1996. The Redeemable Common Stock
Purchase Warrants are callable by the Company at any time prior to
their conversion, with a notice of call in writing to the warrant
holders of record, giving a 30 day notice of such call. The call price
of the Warrants Is $.0001 per Warrant. Any Warrants, so called, and
not either converted, or tendered to the Company by the date specified
in the notice of call, shall expire on the books of the Company and
cannot be exercised.
(e) On August 8, 1991 the Company closed on the minimum (2,000,000) units
and on August 23, 1991 and additional 113,443 units were sold.
(f) The underwriter received 211,343 warrants for a total cash
consideration of $21. Each warrant is convertible into one share of
Common Stock at $.18 per share and one Class A, one Class B, and one
Class C Warrant exercisable at $.25, $.50, and $.75, respectively per
share. In August of 1991, the aforesaid warrants were transferred to
the underwriter sole officers, who in November of 1992 transferred the
warrants to a corporation owned entirely by themselves. On November
28, 1992, the corporation the underwriters warrants to an individual,
otherwise unaffiliated with the Company.
(g) In January 1992 and in September 1992 the Company issued shares to
various individuals for services rendered. The total amount of shares
issued was 1,005,400. The Company received cash consideration of $410
from some of the distributes. The difference between this value and
funds received ($410) was charges to an expense account, services
rendered, on the statement of operations.
-8-
THE QUIGLEY CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - CAPITALIZATION (CONTINUED)
h) Certain key individuals were issued 2,500,000 stock options during
October of 1992. These options entitle the holder to purchase shares
at various prices ranging from $.01 to $.10 per share. Theses option
expire in March of 1995. In June 1993, 270,000 of these options were
exercised.
(i) On December 1992 and in May 1993, the Company issued 350,000 and
250,000 shares of common stock respectively, to its attorney Gary B.
Wolff for services rendered. A charge in the amount of $37,110 was
made to professional fees on the Company's statement of operations for
fiscal year ending September 30, 1994, for the value of the stock
transferred.
(j) On March 23, 1993, Benjamin Cohen exercised 20,000 shares of his
options at a per share price of $.10.
(k) In April 1993, Robert Smith-Felver and Martha P. Smith-Felver
exercised 250,000 shares of their options, previously granted to them
(exercise price $.01) to purchase 250,000 shares. The Smith-Felvers
were owed money by the Company for advertising services performed and
applied $2,500 of this debt in payment for the shares of their option.
The whole or balance of these options expire in March of 1995. In
August of 1994 Robert Smith-Felver and Martha P. Smith-Felver
exercised the remaining 250,000 shares of options in lieu of a
remaining $2,500 of debt incurred for artwork and advertising.
(reflected in statement of operations for fiscal year ending September
30, 1994) The shares are restricted.
(l) In April 1993, James Fisher exercised 1,000,000 options at $.0001 per
share. On April 22, 1993, Mr. Fisher and Eric Kaytes (an officer) each
relinquished 500,000 options (exercise price at $.10 per share) back
to the Company. These options were subsequently reissued to Charles A.
Phillips and Wendy D. Quigley (the wife of the Company's President).
In April 1993 three officers; Guy Quigley, Eric Kaytes and Charles A.
Phillips, each exercised 1,000,000 options at $.0001 per share. These
options were granted on March 12, 1992.
(m) In November 1992, January and February 1993, the Company received a
total of $35,000 from investors. The agreement provided that the
investor is to receive 12,000 restricted shares of the Company for
each $1,000 invested up to an initial maximum of 1,800,000 restricted
common shares for a maximum investment of $150,000. The Company had
granted the investor certain resale rights where the investor can
require the Company to repurchase the shares at increasing prices,
ranging from $.0972 to $.105 per share. This option commences 24
months from January 1993 and expires 36 months from such date. This
put option may be secured by an escrow account, which the Company may
fund using a percentage of the Company's revenues. An amount of
420,000 restricted shares of common stock have been issued to the
investors, increasing the total outstanding shares. (Reverse split on
January 11, 1996, amends this amount to 42,000 restricted shares)
As of September 30, 1994, the Company had issued 420,000 shares of
stock to the investor. Due to the potential exercise of the put
option, the above mentioned shares have been segregated from the
shareholders' permanent equity and have been included in the mezzanine
section of the balance sheet in the amount of $44,100.
(n) In September of 1993 the Company issued 400,000 shares to its old
landlord "Global Environmental Corp." in settlement of an outstanding
balance of $46,000 for rental arrears as of end of December 1993.
(o) In June of 1994, the Company sold 285,500 shares in a Regulation
"S" sale of common shares of the Company. The shares were offered
exclusively to non-US persons. The shares were sold at $.07 a share
for total gross proceeds of $19,985. Commissions totaling $3,597 were
deducted from these proceeds, resulting in a net amount of $16,388
being forwarded to the Company.
-9-
THE QUIGLEY CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - CAPITALIZATION (CONTINUED)
(p) In August 1994, various officers and/or their spouses exercised
options which were issued in 1992. A total of 3,000,000 shares were
issued upon the exercise of these options. The options exercised
ranged in price from $.0001 through $.10 per share. Total
consideration was to have been $21,000. In lieu of payment, the
officers applied moneys owed to them by the Company.
(q) In August 1994, Gary Quigley (a relative of Guy Quigley) exercised
500,000 options of the 1,000,000 granted to him in 1992. In lieu of
paying the $.10 per share, Gary Quigley relinquished the remaining
500,000 options issued to him. The options were then canceled by the
Company. The shares are restricted.
(r) In August 1994, the Company issued 360,000 restricted shares to Dr.
Robert Pollack in total repayment of a debt of $18,000 ($.05 per
share). The debt was incurred over a period of fifteen months and
included $820 worth of interest.
(s) In September 1994, the Company issued 240,000 restricted shares to Dr.
and Mrs. John Godfrey in full repayment of a loan owing to them in the
amount of $12,000 ($.05 per share).
(t) In August 1994, 6,667 restricted shares were issued to Robert Moore,
in payment of a debt owed to him of $1,000 ($.15 per share) for the
installation of some fixed assets. The balance sheet account for
fiscal year ending September 30, 1994 - fixed assets was charged for
this item in the amount of $1,000.
(u) In September 1994, Mrs. Robert Pollack purchased 40,000 restricted
shares of the Company at $.10 for a total cash consideration of
$4,000.
(v) In August 1994, the Company issued 100,000 restricted shares of common
stock, to Dr. John Godfrey, for services rendered. A charge in the
amount of $8,750 was made to services rendered on the statement of
operations for fiscal year ending September 30, 1994, for the value of
the stock.
(w) In October and November 1994, the Company sold 458,334 shares for
$46,000 received.
(x) In January 1995 the Company completed the sale of 1,600,000 of common
stock through a Private Placement, pursuant to Regulation D, Section
504 of the Securities Act of 1933, as amended, for net proceeds of
$225,000
(y) In March 1995, the Company issued 8,000 common shares for $1,000
received.
(z) In May 1995, investors, unaffiliated with the Company purchased 60,000
restricted shares of common stock for a net total of $8,000.
(aa) In June 1995, investors, unaffiliated with the company purchased
630,000 restricted shares of common stock for a net total of $116,000.
(bb) During the period October 1, 1994 through June 30, 1995, the Company
issued 961,554 shares to various individuals for services rendered.
The Statement of Operations was charged in the amount of $120,194, or
$0.125 per share issued. This amount represents the fair value of the
stock.
NOTE 7- NET PROFIT (LOSS) PER SHARE
Net profit (loss) are computed by dividing net profit (loss) by the
weighted average number of shares outstanding during each period.
-10-
THE QUIGLEY CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - COMMITMENTS AND CONTINGENCIES
In the fiscal year ended September 30, 1995, the officers received
remuneration of approximately $106,000. It is management's intention to continue
to pay salaries and commissions to the Company's officers for the fiscal year
ended September 30, 1996.
NOTE 9 - RECENT DEVELOPMENTS
On December 22, 1995, the Board of Directors implemented a reverse-split of
the company's stock with one new share for every ten presently issued and
outstanding shares. On January 10, 1996, the Company received advise from NASD,
that the reverse-split of the company's stock, with one new share for every ten
presently issued and outstanding would be effective at the opening of business
on January 11, 1996. The new symbol is now: "QUIG". In keeping with the current
stock prices, at that time and to accommodate those shareholders who own (a) (b)
and (C) warrants, the Board of Directors reduced the price of these warrants
from (a) $0.25, (b) $0.50 and (C) $0.75 to $0.10, $0.15 and $0.20 respectively.
All the warrants expired on January 31, 1996 and were not extended.
-11-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The Quigley Corporation (the "Company") was organized under the laws of the
state of Nevada on August 24, 1989. The Company started business October 1,
1989.
There have been no successful remedies until the formulation of
Cold-Eeze(TM), where essentially the Company now has a product that reduces the
duration and severity of the Common Cold. ON MAY 22,1992, "Zinc and the Common
cold, a Controlled Clinical Study," by Dr. Godfrey et.al., was published in
England, in the Journal of International Medical Research. (Vol.20, NO.3,
Pgs.234-246) This new, patented pleasant-tasting formulation delivers 93 percent
of the active zinc to the mucosal surfaces. The user has the same sequence of
symptoms as in the absence of treatment, but goes through the phases at a much
accelerated rate and with reduced symptom severity. The formulation can also be
used in chewing gum. On October 3rd; 1994, a new randomized double-blind
placebo-controlled study on the common cold commenced at CLEVELAND CLINIC
FOUNDATION. The study called "Zinc Gluconate Lozenges for Treating the Common
Cold" has been completed and was published ON JULY 15, 1996 in the ANNALS OF
INTERNAL MEDICINE - VOL. 125, NO. 2. Using a 13.3mg lozenge (almost half the
strength of the lozenge used in our Dartmouth Study), the results still showed a
42% reduction in the duration of the Common Cold. ON JULY 20, 1996, a review
"Zinc Lozenges Shorten The Common Cold" was published in The Lancet. Under the
direction of David Riley MD, a known authority on homeopathy and the only
physician authorized by HPUS, the company has completed the process of a
homeopathic proving on zinc gluconate (the active ingredient of our cold
therapy). AT OUR COMPANY'S SOLE EXPENSE, ZINC GLUCONATE NOW HAS A HOMEOPATHIC
DRUG PROVING AND A CLINICAL TRIAL DEMONSTRATING ITS EFFECTIVENESS. A monograph
has been filed with HPCUS (Homeopathic Pharmacopoeia Convention of the United
States) for consideration and has been approved by the HPUS preliminary and
pharmacy committees . It should be included in the pharmacopoeia without any
difficulty. Under the sponsorship of the Company and Hofstra University, New
York, John C. Godfrey Ph.D., the developer of Cold-Eeze(TM), et.al have written
a new paper on "How does Zinc Modify the Common Cold" The paper was published in
THE JOURNAL OF MEDICAL HYPOTHESES VOL.: 46 - PAGES: 295-320 - MARCH 1996.
For the ensuing cold season , the following Distribution entities will act
as wholesalers for the Company's product : (a) McKesson, (b) Cardinal Health,
(c) Flemings, (d) Foxmeyer Corp., (e) F. Dohman Company, (f) Williams Drug
Distributors Inc. (g) US Health Distributors (h) Lotus Light. The following
NATIONAL PHARMACEUTICAL CHAIN HAVE ISSUED PURCHASE ORDERS TO THE COMPANY:
WALGREEN - OSCO - SAVON-ON - PHARMOR - REVCO -FINE FOODS AND SEVERAL SMALLER
CHAIN STORES. Negotiations are in progress with: EKHARD - RITE AID THRIFT DRUG -
THRIFTY/PAYLESS - GENEOVSE - K-MART - GRAND UNION - KROEGER - CVS.
Sister product, Cold-Eezer Plus, continues to be sold successfully in the
alternative marketplace of Doctor's Offices and the home shopping channel QVC.
IT IS THE PRODUCT'S SECOND YEAR ON QVC, WITH SOME 26 APPEARANCES, WHERE SALES TO
THE COMPANY HAVE EXCEEDED $500,000.00. For the ensuing season, Cold-Eezer Plus
will be featured more frequently on QVC.
The Company is currently negotiating with various foreign markets and
Private Label entities.
For those with access to the Internet, the Company has created an extensive
information web site, which can be visited by using the following address:
HTTP://WWW.QUIGLEYCO.COM - The Company can also be E-mailed at:
QUIGLEY@QUIGLEYCO.COM
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. (CONTINUED)
For the nine month period ending JUNE 30, 1996, the Company incurred net
losses of $176,849 on net sales of $323,726
The total assets of the Company at JUNE 30, 1996 and SEPTEMBER 30, 1995
were $392,010 and $498,951 respectively.
The Company incurred a net loss of $ 176,849 for the period ending JUNE 30,
1996 as compared to a net loss of $196,333 for the preceding year's period
ending JUNE 30, 1995. Net sales for the same periods were $323,726 and $405,106
respectively.
As of JUNE 30, 1996 and SEPTEMBER 30, 1995, the Company had working capital
of $243,213 and $349,156 respectively. The decrease in working capital of $
105,943 may be primarily attributed to the fact that total current assets
decreased by $111,058 total current liabilities decreased by $5,115
Total stockholders' equity decreased from $361,015 on SEPTEMBER 30, 1995 to
$262,146 on JUNE 30, 1996
As of JUNE 30, 1996 the Company did not have any current material
commitments for capital expenditures.
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PART II/OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a
Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K None
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SIGNATURES
Pursuant to the requirements of the be signed Securities Exchange Act of
1934, the registrant has duly caused this report to on its behalf by the
undersigned thereunto duly authorized.
THE QUIGLEY CORPORATION
By: /s/ Eric H. Kaytes
------------------
Eric H. Kaytes
Vice President/ Chief Financial Officer
Date: October 22, 1996
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