U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             -----------------------
                                 FORM 10-KSB/A1

            ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
     July 31, 1996                                               0-11088
For the fiscal year ended                                 Commission file number

                              ALFACELL CORPORATION

                 (Name of small business issuer in its charter)

     Delaware                                               22-2369085
(State or other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                         Identification No.)

              225 Belleville Avenue, Bloomfield, New Jersey   07003
               (Address of principal executive offices)(Zip Code)

Issuer's telephone number:                                       (201) 748-8082

Securities registered pursuant to Section 12(b) of the Exchange Act:        None

Securities registered pursuant to Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                                (Title of Class)

--------------------------------------------------------------------------------
     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes __X__ No _____

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]

     Issuer's revenues for the fiscal year ended July 31, 1996 were $184,250.

     The aggregate market value of the Common Stock, par value $.001 per share,
held by non-affiliates based upon the average of the bid and asked prices as
reported by the National Quotation Bureau on September 23, 1996 was $57,295,203.
As of September 23, 1996 there were 14,446,193 shares of Common Stock, par value
$.001 per share, outstanding.

Transitional Small Business Disclosure Format: Yes _____ No __X__



<PAGE>



Part I

Item 1. BUSINESS.

Overview

Alfacell  Corporation  ("Alfacell"  or  the  "Company")  is a  biopharmaceutical
company  organized  in  1981  to  engage  in the  discovery,  investigation  and
development of a new class of anti-cancer  drugs isolated from leopard frog eggs
and  early   embryos.   The  Company's   first  product  under   development  is
ONCONASE(R)which  targets  solid  tumors,  most of which are known to ultimately
become resistant to other chemotherapeutic  drugs. To date, the most significant
clinical  results  with  ONCONASE  have been  observed in  advanced  pancreatic,
non-small  cell lung,  malignant  mesothelioma  and  metastatic  breast  cancer.
According to the American Cancer Society in 1996,  approximately  388,000 people
in the United States will be diagnosed with lung,  breast and pancreatic  cancer
and approximately 231,000 will die.

ONCONASE has been used to treat  patients  with advanced  stages of  pancreatic,
non-small cell lung,  malignant  mesothelioma and metastatic  breast cancer on a
weekly basis.  Encouraging results have been observed in Phase I and II clinical
trials in patients with these tumor types,  warranting  further trials,  some of
which are underway.  Side effects associated with ONCONASE have been modest, are
primarily  renal and are  reversible  upon  reduction  of dose,  or temporary or
permanent  discontinuation  of  treatment.  Patients  treated with ONCONASE have
shown no evidence of myelosuppression (bone marrow suppression),  alopecia (hair
loss) or other severe toxicities  frequently  observed after treatment with most
other  chemotherapeutic  drugs.  In November  1995,  Alfacell began a randomized
multi-center  Phase III clinical  trial to test the  combination of ONCONASE and
tamoxifen  versus  5-fluorouracil  ("5-FU") in  approximately  200 patients with
advanced  pancreatic cancer. A subsequent Phase III clinical trial was initiated
in August 1996,  to compare  ONCONASE and  tamoxifen  with Eli Lilly's  product,
Gemzar(R) ("Gemzar"),  a Food and Drug Administration  ("FDA") approved drug for
pancreatic cancer, in approximately 100 patients.

The Company believes that ONCONASE may also be used as an anti-viral  agent. The
National  Institutes  of Health  ("NIH") has performed an  independent  in vitro
screen of  ONCONASE  against  the HIV virus type 1 ("HIV  virus").  The  results
showed  ONCONASE to inhibit  replication of the HIV virus 99.9% after a four day
incubation period at  concentrations  not toxic to uninfected H9 leukemic cells.
In  addition,  in  vitro  findings  by NIH  scientists  revealed  that  ONCONASE
significantly  inhibited  production  of the HIV virus in  several  persistently
infected  human  cell  lines,  preferentially  degrading  viral  RNA  while  not
affecting normal cellular ribosomal RNA and messenger RNAs. Although the Company
plans to conduct


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<PAGE>



further research  concerning  ONCONASE's  anti-viral  activity,  there can be no
assurance that ONCONASE will show any level of anti-HIV activity in humans.

Beyond the  development  of ONCONASE,  Alfacell has also  discovered a series of
biologically  active  proteins from the same natural  source from which ONCONASE
was  discovered.  These proteins appear to be involved in the regulation of both
early  embryonic  and malignant  cell growth.  However,  significant  additional
research will be required in order to develop them into  therapeutics.  ONCONASE
is a novel compound and represents a new class of  therapeutic  compounds  whose
mechanism of action may be important in treating resistant solid tumors, as well
as potentially  having anti-viral  applications.  There can be no assurance that
development of these proteins into effective and approvable therapeutics will be
accomplished.

Information contained herein contains "forward-looking  statements" which can be
identified  by the  use  of  forward-looking  terminology  such  as  "believes,"
"expects,"  "may," "will," "should," or "anticipates" or the negative thereof or
other  variations  thereon  or  comparable  terminology,  or by  discussions  of
strategy.  No  assurance  can be given  that the future  results  covered by the
forward-looking  statements  will be achieved.  The matters set forth in Exhibit
99.1 hereto constitute cautionary statements  identifying important factors with
respect  to  such  forward-looking  statements,   including  certain  risks  and
uncertainties,  that could  cause  actual  results to vary  materially  from the
future results indicated in such forward-looking statements. Other factors could
also cause actual results to vary materially  from the future results  indicated
in such forward-looking statements.


ONCONASE(R)

Originally,  the Company developed an unpurified  biological  extract from early
stage leopard frog embryos and eggs.  This extract was found to possess a unique
bioactive  profile.  In 1987,  the  Company  isolated a specific  protein,  P-30
Protein, (herein referred to by its registered trade name ONCONASE).  Based upon
the complete amino acid sequence analysis (comparison of the amino acid sequence
of  ONCONASE  with that of over 10,000  protein  sequences  registered  with the
National  Biomedical  Research  Foundation  Protein   Identification   Resource,
Georgetown  University,  Washington,  DC), it has been established that ONCONASE
has a novel structure.  It has also been determined that, thus far,  ONCONASE is
the smallest protein belonging to the superfamily of pancreatic ribonucleases.


Postulated Mechanism of Action

Although the full mechanism of ONCONASE's anti-tumor activity has not been fully
delineated, the following processes have been identified experimentally:


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<PAGE>



Binding of ONCONASE to cell surface receptors followed by:

     o    Cellular internalization;

     o    Ribonucleolytic degradation of RNAs;

     o    Inhibition of protein synthesis;

     o    Inhibition of the cell growth; and

     o    Cell death.

Pre-clinical and clinical data to date have shown that ONCONASE has the capacity
to enter  chemotherapy  resistant  cells,  overcomes  multiple  drug  resistance
("MDR") and other  mechanisms of drug  resistance,  and is synergistic with many
other chemotherapies against numerous tumor cell lines.


Clinical Trials

ONCONASE was tested as a single agent in patients with a variety of solid tumors
and in combination  with  tamoxifen in advanced  pancreatic  patients.  In vitro
results  showed  ONCONASE  to  be  synergistic   with  tamoxifen  in  inhibiting
pancreatic carcinoma tumor cell growth.

Reported  toxicities in Phase I and II clinical  trials,  were primarily  renal,
dose-related  and  reversible.  There has been no evidence  of  myelosuppression
(bone  marrow  suppression),  alopecia  (hair loss) or other  severe  toxicities
frequently  observed  after  treatment with most other  chemotherapeutic  drugs.
Alfacell  has two  on-going  Phase III  clinical  trials in advanced  pancreatic
cancer patients. The Company began a randomized  multi-center Phase III clinical
trial in November 1995. In May 1996,  the FDA approved  Gemzar for the treatment
of advanced pancreatic cancer;  therefore,  in August 1996 the Company broadened
the criteria for inclusion in its study to include patients  previously  treated
with  Gemzar.  The trial is designed to compare the survival and quality of life
of patients  treated  with the  combination  of ONCONASE  and  tamoxifen  versus
5-fluorouracil  (5-FU),  an FDA approved  chemotherapy.  Additionally,  Alfacell
initiated a new Phase III multi-center  clinical trial in August 1996, comparing
ONCONASE plus tamoxifen with Gemzar in newly diagnosed pancreatic patients.

ONCONASE  is  being  tested  in  a  Phase  II  clinical   trial  for   malignant
mesothelioma.  No standard therapy exists to treat this deadly cancer,  and most
advanced malignant  mesothelioma patients die of progressive disease within 6-12
months of diagnosis. 


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<PAGE>



Results to date have been encouraging;  however,  there can be no assurance that
previous clinical trial results will be reflective of future clinical results or
will be sufficient to obtain FDA approval.


Research and Development

Research  and  development  expenses  for the fiscal  years ended July 31, 1996,
1995, and 1994 were $2,188,890, $1,205,523 and $1,114,455,  respectively. During
fiscal 1996,  the  Company's  research and  development  efforts were focused on
manufacturing  ONCONASE  under  cGMP  conditions  ("current  Good  Manufacturing
Practices") for the Phase III clinical trials, commencing the Phase III clinical
trial in advanced  pancreatic  cancer and  monitoring  on-going  activity of the
Phase II clinical trial in malignant mesothelioma.

The Company has a Cooperative Research and Development  Agreement ("CRADA") with
the NIH. Areas of research  include studies of anti-HIV  activity;  the study of
the  mechanism  of action of ONCONASE at the cellular  and  subcellular  levels;
tests of the anti-tumor activities of ONCONASE conjugates; ONCONASE gene therapy
and  investigation  of  anti-tumor  activity of ONCONASE  against  primary brain
tumors.

The  Company  also has a CRADA  with the  National  Cancer  Institute's  ("NCI")
Biological Response Modifier and Developmental  Therapeutics Programs.  Areas of
research  include  characterization  of the  inhibition  of tumor cell growth by
ONCONASE  in  animal  models  and in  vitro  and in  vivo  studies  of  chemical
conjugates of ONCONASE with anti-tumor antibodies.

Management of the Company  believes it has  discovered a family of proteins from
the same  source as  ONCONASE  which  plays a role in cell  maturation  and cell
proliferation  and may play a role in developing other treatments for cancer. At
present,  the Company is defining a number of active  proteins  from the natural
source  material,  in  addition  to  ONCONASE,   which  may  exhibit  cytotoxic,
cytostatic, and other pharmacological effects.

Raw Materials

The major active  ingredient  in the original  extract  derived from early stage
leopard  frog  embryos  and eggs is the  protein,  ONCONASE.  Although  Alfacell
currently   acquires  its  natural  source  material  from  a  single  supplier,
management  believes  that it is abundantly  available  from other  sources.  In
addition,  the Company is conducting  research  concerning  the  alternative  of
manufacturing ONCONASE through recombinant technology.  However, there can be no
assurance that alternative manufacturing methods will be viable. 


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<PAGE>



Manufacturing

The  Company  has  signed an  agreement  with  Scientific  Protein  Laboratories
("SPL"),  a subsidiary of a division of American Home Products Corp., which will
perform the intermediary manufacturing process which entails purifying ONCONASE.
Subsequently,  the  intermediate  product is sent to a  contract  filler for the
final  manufacturing step and vial filling.  Other than these  arrangements,  no
specific  arrangements  have  been  made for the  manufacture  of the  Company's
product.  Compliance with cGMP is a requirement for product manufactured for use
in Phase III clinical trials and for commercial sale. Both SPL, and the contract
filler to whom the intermediate product is sent for the final manufacturing step
and vial filling,  manufacture  in  accordance  with cGMP.  For the  foreseeable
future,  the  Company  intends  to rely on these  manufacturers,  or  substitute
manufacturers,  if necessary, to manufacture its product. If the Company were to
establish a  manufacturing  facility,  which it currently does not intend to do,
the Company would require substantial  additional funds and would be required to
hire and retain  significant  additional  personnel to comply with the extensive
cGMP  regulations of the FDA applicable to such a facility.  No assurance can be
given that the  Company  would be able to make the  transition  successfully  to
commercial production, if it chose, or were required, to do so.


Marketing

Neither the Company nor any of its  officers  or  employees  has  pharmaceutical
marketing  experience.  If the  Company  were to  market  its  products  itself,
significant  additional  expenditures and management resources would be required
to  develop  an  internal  sales  force and there can be no  assurance  that the
Company  would  be  successful  in  penetrating  the  markets  for any  products
developed or that internal marketing capabilities would be developed at all. The
Company  intends,  in some  instances,  to enter into  development and marketing
agreements with third parties.  The Company expects that under such arrangements
it would act as a co-marketing partner or would grant exclusive marketing rights
to its corporate  partners in return for up-front fees,  milestone  payments and
royalties on sales. Under these agreements,  the Company's marketing partner may
have the responsibility for a significant  portion of development of the product
and  regulatory  approval.  In the event  that the  marketing  partner  fails to
develop a  marketable  product  or fails to market a product  successfully,  the
Company's business may be adversely affected.


Government Regulation

The manufacturing and marketing of pharmaceutical  products in the United States
requires the approval of the FDA under the Federal Food,  Drug and Cosmetic Act.


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Similar approvals by comparable agencies are required in most foreign countries.
The FDA has established mandatory procedures and safety standards which apply to
the clinical  testing,  manufacture  and marketing of  pharmaceutical  products.
Obtaining  FDA  approval for a new  therapeutic  may take many years and involve
substantial  expenditures.  Pharmaceutical  manufacturing  facilities  are  also
regulated by state, local and other authorities.

As an initial step in the FDA regulatory approval process,  pre-clinical studies
are  conducted  in animal  models to assess the drug's  efficacy and to identify
potential safety problems. The results of these studies are submitted to the FDA
as a part of the Investigational New Drug Application ("IND"), which is filed to
obtain  approval to begin human clinical  testing.  The human  clinical  testing
program may involve up to three phases.  Data from human trials are submitted to
the  FDA in a New  Drug  Application  ("NDA")  or  Product  License  Application
("PLA").  Preparing  an  NDA  or  PLA  involves  considerable  data  collection,
verification and analysis.

The Company has not received FDA or other  marketing  approval for any products.
Difficulties  or  unanticipated  costs may be  encountered by the Company in its
effort to secure necessary governmental approvals, which could delay or preclude
the Company from  marketing its products.  There can be no assurance that any of
the Company's products will be approved by the FDA or any foreign country.

With respect to patented products,  delays imposed by the governmental  approval
process may  materially  reduce the period during which the Company may have the
exclusive right to exploit them. See --"Patents."


Patents

The Company  believes it is important to develop new  technology and improve its
existing technology. When appropriate,  the Company files patent applications to
protect such inventions.

The Company owns four U.S. Patents:

a)   U.S.  Patent No.  4,888,172  issued in 1989,  which covers  pharmaceuticals
     derived from an amphibian source;

b)   U.S. Patent No. 5,559,212 issued in 1996, which covers ONCONASE; and

c)   U.S.  Patents Nos.  5,529,775  and  5,540,925  issued in 1996,  which cover
     combinations of ONCONASE with certain other chemotherapeutics.



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The Company also owns U.S. Patent No.  4,882,421,  which has now been disclaimed
and is therefore legally unenforceable. This disclaimer permitted the Company to
obtain U.S. Patents Nos. 5,529,775, 5,540,925 and 5,559,212.

The Company owns two European  patents.  These European  patents cover ONCONASE,
process  technology  for making  ONCONASE,  and  combinations  of ONCONASE  with
certain   other   chemotherapeutics.   The  Company   also  owns  other   patent
applications,  which are pending in the United States,  Europe,  and Japan.  The
Company owns an undivided  interest in each of two applications that are pending
in the United States.  Each application  relates to a Subject Invention (as that
term is defined in CRADAs to which the Company and the NIH are parties).

Patents  covering  biotechnological  inventions have an uncertain scope, and the
Company is subject to this  uncertainty.  The Company's patent  applications may
not issue as  patents.  Moreover,  the  Company's  patents  may not  provide the
Company with competitive  advantages and may not withstand challenges by others.
Likewise,  patents  owned by others  may  adversely  affect  the  ability of the
Company to do business.  Furthermore,  others may independently  develop similar
products,  may duplicate the Company's  products,  and may design around patents
owned by the Company.

The Company also relies on proprietary  know-how and on trade secrets to develop
and maintain its competitive  position.  Others may  independently  develop such
know-how or trade  secrets or may  otherwise  obtain  access  thereto.  Although
Company employees and consultants  having access to proprietary  information are
contractually  required to keep such information  confidential,  such agreements
may be breached or held unenforceable.

Pursuant to the Term Loan (as hereinafter defined),  the Company's bank acquired
a security  interest in the Company's patent  portfolio.  The bank has agreed to
subordinate  its interest to licensees of the Company if certain  conditions are
met.


Competition

There are several companies,  universities,  research teams and scientists, both
private  and   government-sponsored,   which  engage  in  research  similar,  or
potentially similar, to that performed by the Company. Many of such entities and
associations  have far greater financial  resources,  larger research staffs and
more extensive  physical  facilities  than the Company.  These  competitors  may
succeed in their  research and  development of products which are more effective
than any developed by the Company and may be more successful than the Company in
their  production  and  marketing  of such  products.  The Company is not aware,
however,  of any  product  currently  being  marketed  which is  similar  to the
Company's  proposed


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anti-tumor  agent,  ONCONASE.  A search by the Company of scientific  literature
reveals no published  information which would indicate that others are currently
employing its methods or producing such an anti-tumor  agent.  There are several
chemotherapeutic  agents  currently  used to treat  the  forms of  cancer  which
ONCONASE is being used to treat.  There can be no assurance  that  ONCONASE will
prove  to be as safe  and as  effective  as  currently  used  drugs  or that new
treatments will not be developed which are more effective than ONCONASE.


Employees

As of September 23, 1996,  Alfacell employed thirteen persons, of whom nine were
engaged  in  research  and  development  activities  and four  were  engaged  in
administration and management.  The Company has five employees who hold Ph.D. or
M.D.  degrees.  All of the Company's  employees  are covered by  confidentiality
agreements.  Alfacell  considers  relations  with its employees to be very good.
None  of  the  Company's  employees  are  covered  by  a  collective  bargaining
agreement.

Environmental Matters

The Company's operations are subject to comprehensive regulation with respect to
environmental,  safety and similar  matters by the United  States  Environmental
Protection  Agency  ("EPA") and  similar  state and local  agencies.  Failure to
comply with  applicable  laws,  regulations and permits can result in injunctive
actions,  damages and civil and criminal  penalties.  If the Company  expands or
changes its  existing  operations  or  proposes  any new  operations,  it may be
required to obtain additional or amended permits or authorizations.  The Company
spends time,  effort and funds in operating its facilities to ensure  compliance
with  environmental  and  other  regulatory   requirements.   Such  efforts  and
expenditures  are common  throughout  the  biotechnology  industry and generally
should have no material adverse effect on the Company.  The principal regulatory
requirements and matters known to the Company requiring or potentially requiring
capital expenditures by the Company do not appear likely, individually or in the
aggregate,  to  have  a  material  adverse  effect  on the  Company's  financial
condition.  The Company  believes that it is in compliance with all current laws
and regulations.


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Item 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

Results of Operations

Fiscal Years Ended July 31, 1996, 1995 and 1994

Revenues

The  Company  is a  development  stage  company  as  defined  in  the  Financial
Accounting  Standards Board's Statement of Financial Accounting Standards No. 7.
As such,  the Company is devoting  substantially  all of its present  efforts to
establishing  a new business and  developing  new drug  products.  The Company's
planned principal operations of marketing and/or licensing of new drugs have not
commenced and,  accordingly,  no significant revenue has been derived therefrom.
The Company continues to marshall all its productive and financial  resources to
proceed  with its  development  of ONCONASE and as such has not had any sales in
fiscal  1996,  1995 and 1994.  Investment  income for fiscal  1996 was  $184,250
compared to $14,992 for fiscal 1995, an increase of $169,258.  This increase was
due to higher balances of cash and cash equivalent. Investment income for fiscal
1995 was $14,992 compared to $6,064 for fiscal 1994, an increase of $8,928.

Research and Development

Research  and  development  expense for fiscal 1996 was  $2,189,000  compared to
$1,206,000  for fiscal 1995,  an increase of $983,000 or 82%.  This increase was
primarily due to an increase in costs  associated  with  manufacturing  clinical
supplies of ONCONASE and costs in support of on-going clinical trials, including
the initial  Phase III  clinical  trial for  pancreatic  cancer and the Phase II
clinical trial for malignant mesothelioma.

Research  and  development  expense for fiscal 1995 was  $1,206,000  compared to
$1,114,000  for fiscal  1994,  an increase of $92,000 or 8%. This  increase  was
primarily  due  to an  increase  in  consulting  fees  for  the  preparation  of
chemistry,  manufacturing and clinical submissions to the FDA in preparation for
Phase III  clinical  trials and a write-off  of  previously  capitalized  patent
costs,  which were  partially  offset by a  decrease  in  non-cash  compensation
expense attributable to the amortization of expense related to stock awards made
in prior years to the Company's Chief Executive Officer and Medical Director.


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<PAGE>



General and Administrative

General and  administrative  expense for fiscal  1996 was  $807,000  compared to
$664,000  for fiscal  1995,  an increase of $143,000 or 22%.  This  increase was
primarily  due to an  increase  in  public  relations  activities  and legal and
accounting fees.

General and  administrative  expense for fiscal  1995 was  $664,000  compared to
$903,000  for fiscal  1994,  a decrease of $239,000 or 26%.  This  decrease  was
primarily  due to a  decrease  over  the same  period  last  year in  legal  and
accounting fees and a decrease in non-cash  compensation expense attributable to
the  amortization of expenses related to stock awards made in prior years to the
Company's Chief Executive Officer.


Interest

Interest  expense  for fiscal 1996 was  $131,000  compared to $144,000 in fiscal
1995, a decrease of $13,000 or 9%. The decrease in fiscal 1996 was primarily due
to the conversion of convertible  subordinated  debentures to common stock and a
reduction in short-term loans payable over the prior period.

Interest  expense  for fiscal 1995 was  $144,000  compared to $223,000 in fiscal
1994, a decrease of $79,000 or 35%.  The  decrease in fiscal 1995 was  primarily
due to the conversion of convertible subordinated debentures to common stock.


Net Loss

The Company has incurred net losses  during each year since its  inception.  The
net loss for fiscal 1996 was $2,942,000 as compared to $1,993,000 in fiscal 1995
and $2,234,000 in fiscal 1994.  The cumulative  loss from the date of inception,
August 24,  1981,  to July 31,  1996  amounted to  $40,391,000.  Such losses are
attributable to the fact that the Company is still in the development  stage and
accordingly  has not derived  sufficient  revenues from operations to offset the
development stage expenses.


Liquidity and Capital Resources

During fiscal 1996, the Company had a net increase in cash of  $5,783,000.  This
increase resulted from net cash provided by financing activities of $10,184,000,
primarily  from  private  placements  of common  stock and  warrants to purchase
common stock and proceeds from the exercise of stock options  offset by net cash
used in  operating  activities  of  $3,405,000  and net cash  used in  investing
activities of $996,000 principally due to the purchase of marketable securities.
Total cash resources,  including marketable securities, as of July 31, 1996 were
$8,131,000  compared to $1,398,000 at July 31, 1995. In addition,  approximately
$2,200,000  was 


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<PAGE>



received in the aggregate in August and September 1996 in connection with option
exercises.

The Company's term loan  agreement with its bank,  (the "Term Loan") was amended
effective as of October 1, 1995. Among other things,  the amendment extended the
maturity  date of the Term Loan from May 31, 1996 to August 31, 1997,  which has
enabled the Company to reflect  substantially the entire principal amount of the
Term Loan outstanding as of July 31, 1996 as long-term debt. This is the primary
reason for the significant  decrease in current  liabilities as of July 31, 1996
compared to July 31, 1995 and the  significant  increase in long-term debt as of
July 31, 1996  compared to July 31, 1995. It is estimated  that the  outstanding
balance on August 31, 1997 will be $1,369,000. At that time, the Company intends
to  refinance  the Term Loan or use its current  cash  resources  to pay off the
unpaid balance. However, there can be no assurance that the Company will be able
to successfully conclude a refinancing.

Pursuant to the terms of the Term Loan, without the bank's consent,  the Company
is prohibited from incurring any additional  indebtedness except as follows: (i)
additional  indebtedness  to the bank,  (ii)  indebtedness  having a priority of
payment  which is  expressly  junior to and  inferior in right of payment to the
prior  payment in full to the bank,  (iii)  indebtedness  arising as a result of
obligations of the Company over the life of its leases which in the aggregate do
not exceed  $200,000,  and (iv) unsecured  indebtedness  arising in the ordinary
course of the Company's business which at no time exceeds  $1,452,000.  Pursuant
to the Term Loan, the Company is required to make  prepayments to the extent its
gross  revenues  exceed  certain  levels.  Pursuant to a pledge  agreement,  the
Company's  Chief  Executive  Officer has pledged a majority of the shares of the
Company's Common Stock owned by her to secure the repayment of the Term Loan and
the Chief  Executive  Officer's  personal loan agreement with the same bank (the
"Shogen Loan").  The pledgor may from time to time request that the bank release
a portion of the pledged stock when market  conditions are favorable in order to
permit  the  sale of such  stock  whereupon  the  proceeds  will be used to make
payments  under  both  the  Shogen  Loan and the Term  Loan  agreement.  If such
personal proceeds of the Company's Chief Executive Officer are used to repay the
Term Loan, the Company would be indebted to the Chief  Executive  Officer in the
same amount. As sales of the Chief Executive Officer's Common Stock were made in
payment of the Company's  obligation to the bank pursuant to the Term Loan,  the
Company  reflected a reduction to Notes Payable owed to the bank and an increase
in the same amount to Loans Payable to Ms.  Shogen.  The Term Loan prohibits the
issuance of any shares,  or right to purchase any shares of the Company's  stock
if the  result of such  issuance  would be to  decrease  the ratio of the market
value of such pledged stock to the  aggregate  debt  outstanding  under the Term
Loan and the Shogen Loan below 1:1. As of July 31, 1996,  the Company,  pursuant
to the Term Loan, and the Chief Executive Officer, pursuant to the Shogen


                                       11


<PAGE>



Loan,  owed  the  bank  $1,453,290  and  $736,565,  respectively.  See  "Certain
Relationships and Related Transactions".

The  Company's  continued  operations  will  depend  on  its  ability  to  raise
additional   funds   through  a  combination   of  equity  or  debt   financing,
collaborative  agreements,  strategic alliances and revenues from the commercial
sale  of  ONCONASE.  The  Company  is  in  discussions  with  several  potential
collaborative  partners  for further  development  and  marketing  of  ONCONASE,
however  there  can  be  no  assurance  that  any  such   arrangements  will  be
consummated.  In addition, the Company expects that its cash needs in the future
will increase due to the on-going clinical trials. The Company believes that its
cash on hand, including marketable securities,  as of July 31, 1996 coupled with
the proceeds  from the exercise of stock  options in August and  September  1996
will be sufficient to meet its anticipated cash needs for approximately the next
two years.  To date, a significant  portion of the Company's  financing has been
through private placements of common stock and warrants,  the issuance of common
stock for  services  rendered,  debt  financing  and  financing  provided by the
Company's Chief Executive Officer. The Company's long-term liquidity will depend
on its ability to raise substantial  additional funds. There can be no assurance
that such funds will be available to the Company on acceptable terms, if at all.

The Company's working capital and capital  requirements may depend upon numerous
factors  including  the  progress  of the  Company's  research  and  development
programs, the timing and cost of obtaining regulatory approvals,  and the levels
of resources that the Company  devotes to the development of  manufacturing  and
marketing capabilities.

In October 1995,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 123,  Accounting for
Stock-Based  Compensation.  This statement  establishes an alternative method of
accounting  for  stock-based  compensation  awarded to employees,  such as stock
options  granted by the  Company to  employees.  SFAS No. 123  provides  for the
recognition of  compensation  expense based on the fair value of the stock-based
award,  but  allows  companies  to  continue  to measure  compensation  costs in
accordance with Accounting Principles Board Opinion (APB) No. 25, Accounting for
Stock Issued to  Employees.  Companies  electing to retain this method must make
pro forma disclosures of net income and earnings per share as if the fair market
value based method had been  applied.  The Company  plans to continue to use the
APB No. 25 which does not require the Company to record compensation expense for
the stock options it awards to employees. In 1997, the Company will disclose the
pro  forma  effect of the fair  value  method  on 1996 and 1997 net  income  and
earnings per share.


                                       12


<PAGE>



Item 10. Executive Compensation

SUMMARY COMPENSATION TABLE

The following  table  provides a summary of cash and non-cash  compensation  for
each of the last three  fiscal  years  ended July 31,  1996,  1995 and 1994 with
respect to Alfacell's  Chief Executive  Officer and the only two other executive
officers of the Company during the last three fiscal years (the "Named Executive
Officers").


<TABLE>
<CAPTION>
                                                                                                  Long Term 
                                                     Annual Compensation                         Compensation
                                     ------------------------------------------------------     
     Name and                        Year            Salary($)    Bonus($)-      Other             Securities          All Other
Principal Position                                                               Annual            Underlying      Compensation ($)
                                                                                Compensa-          Options/
                                                                                tion ($)(1)         SARs(#)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>             <C>           <C>            <C>                    <C>
Kuslima Shogen                       1996           $150,000        - 0 -         - 0 -            500,000(3)           - 0 -
 Chief Executive Officer and         1995            150,000        - 0 -         - 0 -             - 0 - (4)           - 0 -
 Chairman of the Board of            1994            150,000        - 0 -         - 0 -          1,306,529(2)           - 0 -
 Directors(2)                                                                 
------------------------------------------------------------------------------------------------------------------------------------
Gail E. Fraser(5)                    1996           $130,000        - 0 -         - 0 -             - 0 -               - 0 -
 Vice President,                     1995            121,163        - 0 -         - 0 -             - 0 - (4)           - 0 -
 Finance and Chief                   1994              8,333        - 0 -         - 0 -            475,000(6)           - 0 -
 Financial Officer                                                            
------------------------------------------------------------------------------------------------------------------------------------
Stanislaw M. Mikulski(7)             1996           $130,000        - 0 -         - 0 -            250,000(3)           - 0 -
 Executive Vice President            1995            130,000        - 0 -         - 0 -             - 0 - (4)           - 0 -
 and Medical Director                1994            130,000        - 0 -         - 0 -            431,409(7)           - 0 -
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Excludes  perquisites and other personal  benefits that in the aggregate do
     not exceed 10% of the Named  Executive  Officers'  total annual  salary and
     bonus.

(2)  Ms. Shogen resigned from her position as the Company's  President in August
     1996 and Chief  Financial  Officer  in July 1994.  Ms.  Shogen was paid her
     salary in full for fiscal 1996.  No salary was paid to Ms. Shogen in fiscal
     1995 and 1994 and  these  salary  amounts  were  accrued  on the  Company's
     financial statements as obligations owed to Ms. Shogen. During fiscal 1996,
     Ms. Shogen was paid $225,978  representing  payment in full of accrued back
     salary. Of the $225,978,  $150,000 was her full salary for fiscal year 1995
     and  $75,978  was part of her  accrued  salary  for fiscal  year 1994.  The
     balance of her  accrued  salary of $74,022 for fiscal year 1994 was paid by
     the grant of stock options in March 1994. In consideration for her services
     to the  Company  through  January 31, 1994 and Ms.  Shogen's  agreement  to
     release the Company from its  obligation  to pay her  $1,624,151 in accrued
     salary on the Company's balance sheet as of


                                       13


<PAGE>



     January 31, 1994, in March 1994 the Company  granted Ms.  Shogen  five-year
     options to purchase  841,529  shares of the  Company's  Common  Stock at an
     exercise price of $3.20 per share. Of the 841,529  options,  168,306 vested
     September 30, 1994, 168,306 vested March 30, 1995, 168,306 vested March 30,
     1996,  168,306  vested March 30, 1997 and 168,305 will vest March 30, 1998.
     Also in March 1994,  the Company  granted Ms. Shogen  five-year  options to
     purchase  465,000 shares of the Company's Common Stock at an exercise price
     of $3.12 per share.  Of the 465,000  shares,  93,000 vested March 30, 1995,
     93,000  vested March 30, 1996,  93,000  vested March 30, 1997,  93,000 will
     vest March 30, 1998 and 93,000 will vest March 30, 1999.

(3)  These options were originally granted during the fiscal year ended July 31,
     1992, and were due to expire by their terms in September 1995. In September
     1995, the exercise  period for these options was extended  until  September
     1996 and the per share  exercise  price was  increased  to the fair  market
     value of the Common Stock on the date of such extension.

(4)  No options were granted to the Named  Executive  Officers during the fiscal
     year ended July 31, 1995. 

(5)  Ms. Fraser  became an employee of the Company on July 15, 1994.  $96,163 of
     Ms. Fraser's salary in fiscal 1995 was paid to Ms. Fraser.  That portion of
     Ms.  Fraser's salary which was not paid to her was accrued on the Company's
     financial statements as obligations owed to Ms. Fraser. During fiscal 1996,
     Ms.  Fraser was paid $25,000  representing  payment in full of accrued back
     salary. Ms. Fraser was paid her salary in full for fiscal 1996.

(6)  Prior to Ms.  Fraser  joining the  Company,  Ms.  Fraser  received  under a
     consulting  agreement an option to purchase 50,000 and 75,000 shares of the
     Company's Common Stock at exercise prices of $3.22 and $5.00, respectively.
     Of the 50,000 options,  25,000 vested immediately and 25,000 vested July 1,
     1994 and expire  November 10, 1997. The 75,000 options vested  November 11,
     1994 and expire November 10, 1998. On July 15, 1994, Ms. Fraser was granted
     five-year  options to purchase 350,000 shares of the Company's Common stock
     at an  exercise  price of $4.11 per share.  Of the 350,000  shares,  70,000
     vested July 15, 1995,  70,000 vested July 15, 1996,  70,000 vested July 15,
     1997, 70,000 will vest July 15, 1998 and 70,000 will vest July 15, 1999.

(7)  No salary was paid to Dr. Mikulski in fiscal 1994. $5,000 of Dr. Mikulski's
     salary in fiscal 1995 was paid to Dr.  Mikulski.  During  fiscal 1996,  Dr.
     Mikulski  was paid  $194,996  representing  payment in full of accrued back
     salary. Of the $194,996,  $125,000 was his remaining salary for fiscal 1995
     and $69,996 was part of his salary  accrued in fiscal 1994.  The balance of
     his  accrued  salary of $60,004  for fiscal  1994 was  exchanged  for stock
     options that were granted in March


                                       14


<PAGE>



     1994.  Dr.  Mikulski  was paid his  salary in full for fiscal  1996.  Those
     portions of Dr. Mikulski's salaries which were not paid to him were accrued
     on the Company's financial  statements as obligations owed to Dr. Mikulski.
     In  consideration  for his  services  to the  Company  and  Dr.  Mikulski's
     agreement to release the Company from its obligation to pay him $639,619 in
     accrued  salary on the  Company's  balance sheet as of January 31, 1994, in
     March 1994 the Company granted Dr. Mikulski  five-year  options to purchase
     331,409 shares of the Company's  Common Stock at an exercise price of $3.20
     per share. Of the 331,409 options, 66,282 vested September 30, 1994, 66,282
     vested March 30, 1995,  66,282  vested March 30, 1996,  66,282 vested March
     30,  1997 and 66,282  will vest March 30,  1998.  Also in March  1994,  the
     Company granted Dr. Mikulski  five-year  options to purchase 100,000 shares
     of the Company's  Common Stock at an exercise price of $3.12 per share.  Of
     the 100,000 shares,  20,000 vested March 30, 1995,  20,000 vested March 30,
     1996,  20,000  vested March 30,  1997,  20,000 will vest March 30, 1998 and
     20,000 will vest March 30, 1999.






                                       15
<PAGE>



     OPTION GRANTS IN LAST FISCAL YEAR

     The following  table  contains  information  concerning  the grant of stock
options to the Named  Executive  Officers  during the fiscal year ended July 31,
1996.

Individual Grants


<TABLE>
<CAPTION>
                                % of Total                                           Potential Realizable Value at Assumed
                                  Options                                                 Annual Rates of Stock Price     
                                Granted to                                             Appreciation for Option Term (2)   
                 Options       Employees in    Exercise of Base       Expiration     ------------------------------------ 
                 Granted        Fiscal Year     Price ($/Share)          Date              0%($)             5%($)           10%($) 
                 -------       ------------    -----------------   ----------------       ------          ---------         --------
<S>              <C>              <C>                <C>                <C>                  <C>            <C>             <C>     
Kuslima                                                                                                                             
 Shogen          500,000(1)        --                $  3.87            9/16/96               0             $ 96,750        $193,500
                                                                                                                                    
Gail E. Fraser         0           --                   --                 --                --                --              --   
                                                                                                                                    
Stanislaw M                                                                                                                         
 Mikulski        250,000(1)        --                   3.87            9/16/96               0             $ 48,375        $ 96,750
</TABLE>


     (1)  These options,  with an exercise  price of $3.50 per share,  vested on
          the  date of grant  and were due to  expire  on  September  16,  1995.
          However,  in order to induce the exercise of these options,  the Board
          of Directors  approved the extension of such options.  The  expiration
          date of the vested  options was extended to September 16, 1996 and the
          per share  exercise  price was  increased  to $3.87 which was the fair
          market value of the Common Stock on the date of such extension. 

     (2)  The  amounts  set forth in the three  columns  represent  hypothetical
          gains  that  might be  achieved  by the  optionees  if the  respective
          options are exercised at the end of their terms. These gains are based
          on assumed rates of stock price appreciation of 0%, 5% and 10%. The 0%
          appreciation  column is  included  because the  exercise  price of the
          options equals the market price of the underlying  Common Stock on the
          date the exercise  period of the options was  extended,  and thus will
          have no value unless the  Company's  stock price  increases  above the
          exercise price.


                                       16


<PAGE>



                   OPTION EXERCISES AND FISCAL YEAR-END VALUES

     The following  table sets forth the  information  with respect to the Named
Executive  Officers  concerning  the exercise of options  during the fiscal year
ended July 31, 1996 and unexercised options held as of July 31, 1996.


<TABLE>
<CAPTION>
                                                                Number of Unexercised             Value of Unexercised
                                                                  Options at Fiscal               in-the-Money Options
                                                                      Year End                  at Fiscal Year-End ($)(2)
                              Shares                       -----------------------------     -----------------------------
                             Acquired
                                On            Value
                             Exercise       Realized           Exer-                          Exercis-
 Name                            #            ($)(1)          cisable      Unexercisable        able         Unexercisable
 ----                        ---------      ---------      -------------   -------------     ----------      -------------
<S>                           <C>           <C>              <C>             <C>             <C>               <C>       
Kuslima
  Shogen                      87,500        $82,576          1,255,289       873,418         $1,721,862        $1,354,920

Gail E. Fraser                None          None               265,000       210,000           $171,800          $140,700

Stanislaw M
  Mikulski                    86,500        $77,940            402,346       192,563           $529,362          $309,050
</TABLE>


(1)  Based  upon the fair  market  value of the  purchased  shares on the option
     exercise date less the exercise price paid for the shares.

(2)  The fair market  value of the common stock at the fiscal year end was based
     on the average of the bid and asked price  ($4.78) for the common  stock as
     reported by the  National  Quotation  Bureau on the last date of the fiscal
     year, July 31, 1996.


                                       17


<PAGE>



Item 12. Certain Relationships and Related Transactions

Effective May 31, 1993, the Company  restructured a pre-existing  bank note (the
"Note") to include the  principal  balance of  $1,300,000,  accrued  interest of
$349,072,  and legal fees of  $50,000  into a new term loan of  $1,699,072  (the
"Term  Loan").  Interest  was to be  computed  at a rate of seven  and  one-half
percent (7.5%) per annum. The Term Loan is secured by  substantially  all of the
assets of the Company.  Ms. Shogen has  personally  guaranteed  the Note and has
pledged certain  collateral,  including a majority of the shares of Common Stock
of the  Company  owned by her and certain  options,  as  additional  collateral,
pursuant  to a pledge  agreement  (the  "Pledge  Agreement")  dated May 31, 1993
between Ms. Shogen,  the Company and the bank. The Pledge Agreement  secures the
obligations  of the  Company to the bank  pursuant to the Term Loan as well as a
personal  loan  Ms.  Shogen  had  with  the  same  bank  (the  "Shogen   Loan").
Substantially  all of the  obligations  owed by the  Company to Ms.  Shogen were
subordinated  to the Note. In order to satisfy the Company's  obligations to the
bank pursuant to the Term Loan, from time to time, as contemplated by the Pledge
Agreement,  portions  of the shares of Common  Stock  pledged to the bank by Ms.
Shogen have been sold.  During  fiscal 1994,  shares  pledged by Ms. Shogen were
sold in payment of such  obligation in the amount of $48,673  during the quarter
ended October 31, 1993,  $15,945 during  November 1993,  $15,957 during December
1993 and $15,704  during  January 1994.  Through  January 31, 1994,  the monthly
payments  of  interest  and  principal  under the Term Loan were paid  primarily
pursuant to this procedure, and subsequent to such time, have been paid directly
by the Company. The Term Loan agreement prohibits the issuance of any shares, or
right to  purchase  any  shares  of the  Company's  stock if the  result of such
issuance  would be to  decrease  the ratio of the market  value of Ms.  Shogen's
pledged  stock to the  aggregate  outstanding  debt  under the Term Loan and the
Shogen  Loan,  below 1:1. In June 1994,  the Shogen Loan and the related  Pledge
Agreement were amended to provide for,  among other things,  the issuance to Ms.
Shogen, and subsequent pledge to the bank, of certain options to purchase Common
Stock  issued to Ms.  Shogen in  connection  with the  conversion  to options of
advances  and  interest  thereon  made by Ms.  Shogen to the Company and accrued
salary owed to Ms. Shogen by the Company.  Based upon the average of the closing
bid and asked prices on July 31, 1996, the shares of the Company's  Common Stock
pledged by Ms. Shogen to secure the Term Loan and the Shogen Loan were valued at
$6,419,540  (excluding  the value of shares of Common Stock  underlying  certain
options pledged to the bank) and the aggregate  outstanding  debt of the Company
pursuant  to the Term  Loan and the  aggregate  outstanding  debt of Ms.  Shogen
pursuant to the Shogen Loan as of July 31, 1996 were  $1,453,290  and  $736,565,
respectively.  In connection with the Term Loan, Ms. Shogen also assigned to the
bank her right to payment of up to $200,000 of  outstanding  debt owed to her by
the Company,  which amount has been paid to Ms. Shogen by the Company,  and paid
to the bank by Ms.  Shogen.  In November 1995, the Note was amended and restated
and the Term Loan agreement was amended to provide for,  effective as of October
1,


                                       18


<PAGE>

1995, among other things (i) the extension of the term of the Term Loan from May
31, 1996 to August 31, 1997, (ii) a re-amortization  of the payment of principal
and interest  based on a one hundred  fifty (150) month  amortization  schedule,
(iii) an increase in the interest  rate from seven and one-half  percent  (7.5%)
per annum to eight and three eighths  percent  (8.375%) per annum,  and (iv) the
issuance  to the bank of a warrant to  purchase  10,000  shares of Common  Stock
through August 31, 1997 at an exercise price of $4.19 per share.

From time to time Kuslima  Shogen has  advanced  sums of money to the Company in
the form of unsecured  obligations  payable on demand (the "demand loans").  The
Company  incurred such  indebtedness  to Ms. Shogen  pursuant to sales of Common
Stock owned by Ms.  Shogen  pursuant to the Pledge  Agreement,  the  proceeds of
which were used to reduce the Company's  indebtedness  under the Term Loan.  Ms.
Shogen  has at  various  times  converted  portions  of the  demand  loans  into
convertible  debentures.  At July 31,  1994,  the  Company  owed Ms.  Shogen  an
aggregate  of $203,723  pursuant  to a demand  loan and accrued  interest on the
demand loan.  During the fiscal year ended July 31, 1995, the Company,  with its
bank's consent,  repaid $80,067 of the principal  amount of the demand loans. At
July 31, 1995, the Company owed Ms. Shogen an aggregate of $138,638  pursuant to
demand loans and accrued  interest on the demand  loans.  During the fiscal year
ended July 31, 1996, the Company,  with its bank's  consent,  repaid $138,638 in
principal representing payment in full of principal of Ms. Shogen's demand loans
to the Company.  In July 1996, the Company  advanced  Kuslima Shogen $112,500 in
anticipation  of proceeds due from the exercise of options by her. The principal
amount plus interest have been repaid in full.

During the fiscal  years ended July 31, 1996 and 1995,  the Company  paid to The
Weinberg  Group  $77,060 and $158,649,  respectively,  for  consulting  services
provided to the Company by The Weinberg  Group.  Michael C. Lowe was a principal
of the Weinberg Group from 1988 through July 1996.

Robert R. Henry  purchased an  aggregate  of 147,100  shares of Common Stock and
warrants  to  purchase  20,000  shares of  Common  Stock in  private  placements
completed by the Company in September  1994,  September  1995 and June 1996 (the
"June 1996 Private  Placement")  on the same terms and  conditions  as the other
participants in the private  placements.  Certain of the shares purchased in the
June  1996  Private  Placement  were  purchased  by Mr.  Henry on  behalf of his
children.

On July 23,  1991,  the board of  directors  authorized  the  Company  to pay to
Kuslima Shogen an amount equal to 15% of any gross  royalties  which may be paid
to the Company  from any  license(s)  with  respect to the  Company's  principal
product,  ONCONASE, or any other products derived from amphibian source extract,
produced either as a natural,  synthesized,  and/or genetically  engineered drug
for which the Company owns or is co-owner of the patent, or acquires such rights
in the


                                       19


<PAGE>



future,  for a period  not to exceed  the life of the  patents.  If the  Company
manufactures  and  markets  the drugs by itself,  then the  Company  will pay an
amount equal to 5% of gross sales from any products  sold during the life of the
patents.









                                       20


<PAGE>



Item 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits (numbered in accordance with Item 601 of Regulation S-B).

                                                                  Exhibit No. or
    Exhibit                                                       Incorporation
      No.                  Item Title                              by Reference
      ---                  ----------                              ------------

       3.1    Certificate of Incorporation                                 *

       3.2    By-Laws                                                      *

       3.3    Amendment to Certificate of Incorporation                    #

       4.1    Form of Convertible Debenture                                **

       10.1   Form of Stock and Warrant  Purchase  Agreements  used in
              private placements completed in April 1996 and June 1996
                                                                           ##

       10.2   Lease, as amended - 225 Belleville  Avenue,  Bloomfield,
              New Jersey                                                   **

       10.3   Amendment to Lease - 225 Belleville Avenue,  Bloomfield,
              New Jersey                                                   #

       10.4   Term  Loan  Agreement  dated  as of May 31,  1993 by and
              between the Company and First Fidelity  Bank,  N.A., New
              Jersey                                                       **

       10.5   Term Note dated as of May 31, 1993 issued by the Company
              to First Fidelity Bank, N.A., New Jersey                     **

       10.6   Patent  Security  Agreement  dated as of May 31, 1993 by
              and between the Company and First Fidelity  Bank,  N.A.,
              New Jersey                                                   **

       10.7   Security  Agreement  dated  as of May  31,  1993  by and
              between the Company and First Fidelity  Bank,  N.A., New
              Jersey                                                       **

       10.8   Subordination  Agreement dated as of May 31, 1993 by and
              among the Company,  Kuslima  Shogen,  and First Fidelity
              Bank, N.A., New Jersey                                       **

       10.9   Amendment to Subordination Agreement dated as of May 31,
              1993 by and among the Company, Kuslima Shogen, and First
              Fidelity Bank, N.A., New Jersey dated June 30, 1995          #



                                       21


<PAGE>



       10.10  Form of Stock Purchase Agreement and Certificate used in
              connection  with various  private  placements                *** 

       10.11  Form of Stock and Warrant Purchase Agreement and Warrant
              Agreement used in Private  Placement  completed on March
              21, 1994                                                     ***

       10.12  The Company's  1993 Stock Option Plan and Form of Option
              Agreement                                                    *****

       10.13  Debt  Conversion  Agreement  dated  March 30,  1994 with
              Kuslima Shogen                                               ****

       10.14  Accrued Salary Conversion Agreement dated March 30, 1994
              with Kuslima Shogen                                          ****

       10.15  Accrued Salary Conversion Agreement dated March 30, 1994
              with Stanislaw Mikulski                                      ****

       10.16  Debt Conversion Agreement dated March 30, 1994 with John
              Schierloh                                                    ****

       10.17  Option  Agreement  dated  March 30,  1994  with  Kuslima
              Shogen                                                       ****

       10.18  Amendment No. 1 dated June 20, 1994 to Option  Agreement
              dated March 30, 1994 with Kuslima Shogen                     ****

       10.19  Amendment  No.  1 dated  June  17,  1994  to  Term  Loan
              Agreement  dated May 31, 1993 between Kuslima Shogen and
              First Fidelity Bank, N.A., New Jersey                        ****

       10.20  Second Pledge Agreement dated June 17, 1994 by and among
              the Company,  Kuslima  Shogen and First  Fidelity  Bank,
              N.A., New Jersey                                             ****

       10.21  Form of  Amendment  No. 1 dated June 20,  1994 to Option
              Agreement dated March 30, 1994 with Kuslima Shogen           *****

       10.22  Form of  Amendment  No. 1 dated June 20,  1994 to Option
              Agreement  dated March 30, 1994 with Stanislaw  Mikulski
                                                                           *****

       10.23  Form of Stock and Warrant Purchase Agreement and Warrant
              Agreement  used  in  Private   Placement   completed  on
              September 13, 1994                                           +

       10.24  Form of  Subscription  Agreements and Warrant  Agreement
              used in Private  Placements  closed in October  1994 and
              September 1995.                                              #



                                       22


<PAGE>



       10.25  Amendment No. 1 dated as of October  1,1995 to Term Loan
              Agreement  dated as of May 31,  1993 by and  between the
              Company and First Fidelity Bank, N.A. New Jersey             ####

       10.26  Amended  and  Restated  Term Note dated as of October 1,
              1995 issued by the Company to First Fidelity Bank,  N.A.
              New Jersey                                                   ####

       10.27  Warrant  dated  as of  October  1,  1995  issued  by the
              Company to First Fidelity Bank, N.A. New Jersey              ####

       10.28  Pledge  Agreement  dated as of May 31, 1993  between the
              Company,  Kuslima  Shogen and First  Fidelity  Bank, New
              Jersey                                                       ###

       21.1   Subsidiaries of Registrant                                   **

       23.1   Consent of KPMG Peat Marwick LLP                             ###

       27.1   Financial Data Schedule                                      +++

       99.1   Factors to Consider in Connection  with  Forward-Looking
              Statements                                                   +++


* Previously  filed as exhibit to the Company's  Registration  Statement on Form
S-18 (File No. 2-79975-NY) and incorporated herein by reference thereto.

** Previously  filed as exhibits to the Company's Annual Report on Form 10-K for
the year ended July 31, 1993 and incorporated herein by reference thereto.

***  Previously  filed as exhibits  to the  Company's  Quarterly  Report on Form
10-QSB  for the  quarter  ended  January  31,  1994 and  incorporated  herein by
reference thereto.

****  Previously  filed as exhibits to the  Company's  Quarterly  Report on Form
10-QSB for the quarter ended April 30, 1994 and incorporated herein by reference
thereto.

***** Previously filed as exhibits to the Company's  Registration Statement Form
SB-2 (File No. 33-76950) and incorporated herein by reference thereto.

+ Previously filed as exhibits to the Company's  Registration  Statement on Form
SB-2 (File No. 33-83072) and incorporated herein by reference thereto.

++ Previously filed as exhibits to the Company's Quarterly Report on Form 10-QSB
for the  quarter  ended  April 30,  1995 and  incorporated  herein by  reference
thereto.



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<PAGE>



+++ Previously  filed as exhibits to the Company's  Annual Report on Form 10-KSB
for the year ended July 31, 1996 and incorporated by reference thereto.

####  Previously  filed as exhibits to the Company's  Registration  Statement on
Form SB-2 (File No. 33-63341) and incorporated herein by reference thereto.

# Previously filed as exhibits to the Company's Annual Report on Form 10-KSB for
the year ended July 31, 1995 and incorporated herein by reference thereto.

## Previously files as exhibits to the Company's  Registration statement on Form
SB-2 (File No. 333-11575) and incorporated herein by reference thereto.

### Filed herewith.

(b) Reports on Form 8-K.

On July 16, 1996, the Company filed with the Securities and Exchange  Commission
a Current Report on Form 8-K dated June 11, 1996 (Item 5).






                                       24


<PAGE>



                                    Signature



Pursuant to the  requirements of Section 13 or 15(d) 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.

                                   ALFACELL CORPORATION

Dated: October 7, 1997                  /s/ GAIL E. FRASER
                                        ------------------
                                        Gail E. Fraser, Chief Financial Officer,
                                         Vice President of Finance, (Principal
                                         Financial Officer and Principal 
                                         Accounting Officer) and Director



                                       25


<PAGE>



                                  EXHIBIT INDEX


10.28     Pledge Agreement dated May 31, 1993 between                      E-1 
          the Company, Kuslima Shogen and First Fidelity 
          Bank, N.A., New Jersey

23.1      Consent of KPMG Peat Marwick LLP                                 E-2







                                       26