U.S. Securities and Exchange Commission
                      Washington, D.C. 20549

                           Form 10-KSB

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 [Fee required]

For the fiscal year ended May 31, 2000

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934 [No fee required]

For the transition period from _____________ to ________________

Commission file number 0-10035

                         LESCARDEN INC.
------------------------------------------------------------------
 (Exact name of small business issuer as specified in its charter)

        New York                                13-2538207
-------------------------------           --------------------
(State or other jurisdiction of           (I.R.S. Employer
 incorporation or organization)            Identification No.)

420 Lexington Avenue, New York Suite 212           10170
----------------------------------------  --------------------
(Address of principle executive offices)       (Zip Code)

Issuer's telephone number (212) 687-1050
                          --------------

Securities registered under Section 12(b) of the Act: None
                                                      ----

Securities registered under Section 12(g) of the Act:
             Common Stock $.001 par value
             ----------------------------

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 pursuant to
Item 405 of Regulation S-B contained in this form, 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.
[ ]

Issuers revenues for its most recent fiscal year were $ 434,581.

The aggregate market value of the registrant's Common Stock held by
nonaffiliates of the registrant on July 7, 2000 was approximately
$5,033,206.

The number of shares of registrant's Common Stock outstanding as of
July 7, 2000 was 22,319,169.

ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
YEARS

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a
court.
Yes [X]   No [ ]

            DOCUMENTS INCORPORATED BY REFERENCES: None

Transitional Small Business Disclosure Format (Check one): Yes    :
No X
  ---

2<PAGE>
                                 PART I
                                 ------

ITEM 1. BUSINESS
        --------
          The Company's current liquidity position must be viewed
as critical.

          The Company, a New York Corporation, has been in business
since 1960. The Company's product developments continue to
concentrate on its proprietary materials, Catrix (R) and
POLY-NAG (R),both in terms of their therapeutic, cosmetic and food
supplement values.

          With regard to Catrix (R), the Company, in the early
1980's, obtained an Investigational New Drug ("IND") exemption from
the U.S. Food and Drug Administration ("FDA") and the Canadian Health
Protection Branch ("HPB") for the experimental treatment of solid
tumors in humans.  Prior to obtaining the IND, the Company
completed all pre-clinical studies and Phase I clinical trials
relating to the safety of Catrix (R).  For several years, the Company
conducted a Phase II/III clinical trial on patients with metastatic
renal cell disease.  This trial was conducted at two locations, and
more than 25 patients were enrolled.  Patients tolerated the drug
well, and only a few patients experienced mild adverse reactions.
Otherwise, the clinical results were encouraging.  However, at the
end of 1999, the Company, in consultation with the principal
investigators, suspended continuation of the study.  This
suspension was due to the Company's inability to finance a larger
patient population for the study.  While the Company cannot
guarantee that the study will be resumed at any time, the Company
retains the option to resume this study in the future.

          In 1994, the Company licensed another company to  seek
FDA approval for the use of pure Catrix (R) powder in treating
decubitus ulcers (the pressure sores experienced by some diabetics
and the chronically bed-ridden), and other topical wounds.
Traditional treatment for these lesions involves debridement,
improved hygiene, nutrition and nursing care.  Moreover, there
currently exist literally dozens of drugs and devices targeted to
treat chronic non-healing wounds.  The clinical efficacy of these
products in wound care is generally viewed as modest to merely
palliative.

          The Company believes that the ability to provide an
active agent to accelerate the healing process represents a clear
business opportunity in a significant market with a demonstrated
need for a more effective therapy.

3<PAGE>

          The Company's prior licensee filed a so-called 510 (k)
marketing application with the FDA in August 1996.  In December
1996 the FDA approved the 510 (k) application thus establishing
pure Catrix powder as safe and efficacious in the management of
wounds.  Specifically, the FDA approval letter states:

                  "[Catrix (R) Wound Dressing...is...intended for
          use in the management of pressure ulcers (stages I-IV),
          stasis ulcers, 1st and 2nd degree burns, diabetic ulcers,
          foot ulcers, post surgical incisions, cuts, abrasions,
          partial thickness wounds and skin conditions associated
          with peristomal care."

          Thereafter, in 1997, the prior licensee undertook an
internal review of its product development program and concluded
that some of its products would not be further pursued, among which
was Catrix (R).  This decision was not based on Catrix (R)'s  safety
or efficacy but rather on resource allocation.  In early 1998 the
parties amicably resolved the situation with the assignment to the
Company of all rights to the 510 (k) marketing approval together
with all record's and the name Repliderm  which the prior licensee
had coined in place of Catrix (R) for domestic use.

          At this time, the Company is focusing a significant
portion of its resources on the development of a complete marketing
program for pure Catrix  powder, as well as Catrix (R) Ointment,
creams and lip balm, in the treatment of a multiplicity of topical
wounds.  Furthermore, the Company believes that the observed effects
of Catrix (R) (including acceleration of wound healing, tumor
inhibition and reduction, inhibition of excessive vascularization and
modulation of immune system functions) coupled with an absence of
toxicity, present additional promising avenues of investigation.

          Additionally, the Company has pursued a program to
establish the clinical efficacy of its POLY-NAG (R) material as an
anti-arthritic.  The product is derived from specially processed
crustacean shells ("Poly-N-Acetyl-Glucosamine").

          In 1996 the Company sponsored a clinical bio-availability
trial on 16 healthy individuals to determine metabolic absorption.
The published results confirmed that POLY-NAG (R) was indeed absorbed
and metabolized into glucosamine which was measurably present in
the subjects' serum.  This initial study also indicated that serum
levels of glucosamine remained somewhat more elevated longer in the
POLY-NAG (R) subjects compared to those subjects who were
administered plain NAG over the same period of time.

          Scientific research has long established the potential
value of glucosamine in the treatment of various inflammatory
diseases such as arthritis and even ulcerative colitis.  Therefore,

4<PAGE>

in July 1998, the Company sponsored the institution of a small
clinical trial orally administering capsules of POLY-NAG (R) to
several arthritic patients.  This clinical study has been
concluded, and the favorable results are to be published by the
principal investigators later this year.  Moreover, based upon
these two clinical experiences, the Company applied for patent
protection with the U.S. Patent Office which has advised that the
patent will be approved.

          In January/February 1999 the Company engaged in
negotiations with a Spanish Company named ICN Iberica, SA ("ICNI")
whose headquarters are in Barcelona.  ICNI is a wholly owned
subsidiary of ICN Pharmaceuticals, Inc. headquartered in Costa
Mesa, California.

          Such negotiations led to the execution of a formal
agreement, in March 1999, between the Company and ICNI.  Among
other terms, the agreement grants ICNI the semi-exclusive rights to
market CATRIX (R) Wound Dressing in Spain only.  In return, ICNI is
obligated to pay the Company a license fee and to purchase finished
product from the Company.

          However, the full implementation of the ICNI Agreement
was made subject to the Company's securing marketing approval from
the Spanish Health Ministry ("SHM") in Madrid.  Inspectors from the
Spanish Health Ministry inspected the Company's facilities and its
records on two occasions, in November 1998 and in April 1999.  On
those same occasions, the Inspectors also visited the Company's
contract manufacturers in the U.S. and Canada.

          In September 1999, the SHM approved the marketing of
Catrix (R) Wound Dressing in Spain, and the Agreement between the
Company and ICNI became fully implemented.  Since then, the Company
has fulfilled all of its obigations thereunder, including the
timely shipment of the product.  ICNI has commenced implementation
of a complete marketing program in Spain, and it has also applied
to the appropriate Spanish authorities for a government sponsored
reimbursement plan for patients covered under the national medical
care program.  A decision on this is expected by the end of this
year.

SCIENTIFIC BACKGROUND.

          BACKGROUND OF CATRIX (R).  In the early 1950's, one of the
Company's co-founders discovered that cartilage powder
significantly hastened the healing of surgical wounds in animals.
During early wound healing experiments, it was noted that the
margins of the surgical wounds treated with Catrix (R) were less red
and swollen than those of the controls.  This observation led the
discoverer to the application of Catrix (R) to various inflammatory
diseases, systemic and topical.  One inflammatory condition that

5<PAGE>

was successfully treated was psoriasis, a condition caused by an
over production of skin cells.

          The Company believes that Catrix (R) acts as a biological
response modifier, regulating the activity of important components
of the immune system.  Other observed effects of Catrix (R) include:
          -acceleration of wound healing;
          -inhibition of excessive vascularization of certain
           tissues;
          -inhibition of proliferation of malignant cells; and

          -(in vitro) moderation of excessive collagen synthesis by
           fibroblast cells.

          METASTATIC RENAL CELL CANCER.  Metastatic renal cell
cancer (which is the spread of a primary kidney cancer to other
organs) is a particularly lethal form of cancer afflicting
approximately 10,000 individuals per year in the United States and
Canada.  Only eight to twenty percent of the metastatic renal cell
cancer patients survive two years after diagnosis.  The patient's
chance of overcoming the disease is dependent upon how advanced the
disease is at the time of diagnosis.  The disease originates as a
tumor in the kidney.  After a certain stage in tumor growth,
metastasis, or spread of cancerous cells to other body organs,
occurs.  Conventional treatment generally involves removal of the
diseased kidney followed by radiation or chemotherapy to affect
reduction of the secondary tumors or metastases.

          It has been recognized that renal cell cancers may be
responsive to treatment with some cytokines such as interleukin-2.
Cytokines are intimate components of the body's immune system, the
integrity of which system is important  in defending the body
against many forms of cancer.  Interleukin-2 is somewhat effective
in treating renal cell cancer but its usefulness is limited by its
significant toxicity.  The Company believes that Catrix (R), with
its ability to modulate the body's immune system and its non-toxic
properties, is promising as a treatment for this devastating
disease.

          HEALING DECUBITUS WOUNDS.  Decubitus ulcers, or pressure
sores, are a scourge of the infirmed elderly, diabetic and
generally immobile, wheel chair limited patient.  Current therapy
includes removal of the dead tissue around the ulcer, good hygiene,
and nutrition and nursing care.  Given the ever increasing elderly
population in the United States and the costs of specialized
medical treatment, a product such as Catrix (R), which appears to
promote wound healing, will, the Company believes, be sought after
by the medical community.

          In July 1998, in pursuit of its marketing opportunities
worldwide for Catrix (R) powder and wound care, the Company entered

6<PAGE>

into an agreement with a Spanish physician residing in Barcelona,
Spain.  This agreement appoints the physician as the Company's
exclusive agent in Europe for the purpose of securing marketing
approval from the Spanish Health Ministry for Catrix (R) powder in
the treatment of all manner of topical wounds.

          Spain is one of the 16 member countries of the European
Union.  Under the rules of the EU one member's approval of a
therapeutic drug or device can result in the automatic approval in
the other member nations.

          OTHER TOPICAL TREATMENTS.  For the past two years the
Company has engaged a corporate specialty formulator for the
purpose of designing and formulating several topical products.
Among these products are an ointment, creams and a lip balm.  Each
of these products contains various strengths of pure Catrix (R)
powder, generally either 5% or 10%.

          The Ointment product, containing 10% Catrix (R), is
intended for the use of physicians only, particularly clinical
dermatologists whose practice is largely devoted to laser surgery
of the face and/or chemical peel procedures.  Patients who undergo
such treatments suffer from facial wounds requiring weeks of
healing.

          The Company's Catrix (R) Ointment, when applied post-
surgically, contributes significantly to the wound healing process
greatly reducing the healing period.  At this time, Catrix (R)
Ointment is the subject of a human clinical trial, ultimately to
involve some twenty-five patients undergoing some sort of facial
surgery.  The trial has received IRB approval and is being
conducted by Dr. Maritza I. Perez in her private practice in Mount
Kisco, New York and in New York City.  This trial should be
concluded in September 2000.  Initial results are most encouraging,
and Dr. Perez expects to report upon her findings at the annual
meeting of the American Society for Dermatologic Surgery in Denver
this November.

          With the assistance of the same formulator, first above
mentioned, the Company has also designed and formulated a 5%
Catrix (R) Cream and a 5% Catrix (R) Lip Balm.  The Cream is a
consumer product intended for use on various skin conditions such as
psoriasis, mild sun or chemical burns, scratches and other topical
anamolies.  Modest sales of these products have already occurred
principally via the Company's Internet web site at www.catrix.com.

PRE-CLINICAL STUDIES OF CATRIX (R).

          During the 1970's, the Company conducted a wide range of
pre-clinical laboratory and animal studies to assess the potential
safety and efficacy of Catrix (R).  These studies included the

7<PAGE>

following:  Acute Oral Toxicity (rats); Acute Subcutaneous Toxicity
(mice): Acute Dermal Toxicity (rabbits): 18-Month Chronic Toxicity
and Carcinogenicity Study (mice); 2-Year Chronic Toxicity and
Carcinogenicity (rats); 14 week Chronic Toxicity Study (dogs); Per
cutaneous Toxicity (guinea pigs); Dental Wound Healing (rats);
Dental Wound Healing (dogs); and Irritation and Sensitization of
Human Skin by Catrix (R).

          The results of these studies were submitted to the FDA
and HPB as part of the Company's application for an IND exemption,
approval of which is required prior to the commencement of human
clinical trials.  In 1985, the FDA granted the Company's request
for an IND exemption for the application of Catrix (R) in the
treatment of Scleroderma, a rare skin disease.  Shortly thereafter,
the IND exemption was expanded to include the application of
Catrix (R) for various forms of cancer, including metastatic renal
cell cancer.  Due to financial constraints, the Scleroderma Therapy
has not been pursued to date.

HUMAN CLINICAL TRIALS CONDUCTED WITH CATRIX (R)

          Since approval of the Company's IND, it has completed
Phase I clinical trial and conducted a Phase II clinical trial.
The Company's clinical trials involved the administration  of
Catrix (R) capsules to solid tumor cancer patients.  This trial was
suspended in December 1999.  (See, "Business-Government
Regulation").

PHASE I TRIALS

          The objective of the Company's Phase I trials (involving
the initial introduction of Catrix (R) into human subjects) was to
test for safety, side effects, dosage tolerance, metabolism and
clinical pharmacology.  Initial testing was conducted on patients
with advanced cancers that were unresponsive to other forms of
therapy.  Regulatory authorities require that new cancer therapies
be administered in patients who have failed conventional therapy
and that some indication of efficacy be shown before the drug can
be used as the "drug of choice" in earlier stage patients (i.e., in
Phase II trials).

          The Company's Phase I studies were conducted in the early
1980's at Pennsylvania State University's Milton S. Hershey Medical
Center in Hershey, Pennsylvania , and at the University of Medicine
and Dentistry of New Jersey in Newark, New Jersey.  The FDA
required that both Phase I studies use Catrix -S, the injectable
dosage form of Catrix (R) only.

8<PAGE>

     PHASE II TRIALS.

          The Company engaged in one Phase II trial which is now
suspended.  Phase II trials involve well controlled tests in a
larger (but still limited) patient population to determine the
efficacy of the drug for specific indications, to determine optimal
dosage and to identify possible side effects and safety risks.


     PHASE III TRIALS

          Upon completion of the Phase II trial, should it be
resumed the Company would meet with the FDA and HPB for
authorization to commence Phase III trials to evaluate the overall
risks and benefits of Catrix (R) in relation to the treated disease
and in light of other available therapies.  Following this further
evaluation of efficacy and safety, the Company would file its NDA
and NDS.  (See,
"Government Regulation-Orphan Drug Status").

     TRIALS INVOLVING DECUBITUS ULCERS

          Given the FDA's approval of the 510(k) application for
the use of Catrix (R) in wound treatment, Catrix ((R) powder can be
marketed in the U.S. presently.  In order to spark interest in the
material, the Company supplied Catrix (R) powder to two hospitals for
the treatment of patients suffering from decubitus or venus ulcers.
Clinical results have been encouraging.  Additional in vivo and in
vitro trials may be undertaken by ICNI in Spain.

     LABORATORY STUDIES

          As part of the FDA and HPB approval process, the Company
may be required to do additional laboratory research into the
molecular composition of the active fractions of Catrix (R).
Significant progress has been made in this regard by consultants
working under contract with the company.  Results of this research
will assist the Company in developing standardized manufacturing
and production processes.  In addition, chemically modified
versions of the isolated active fractions may prove to have
additional therapeutic effects.

          Several of the Company's specific laboratory research
projects conducted at Battelle Columbus Laboratories relating to
cancer conclude that there are low molecular weight components of
Catrix (R) which are anti-mitotic, that is, relatively small
components in Catrix (R) that prevent cell replication. Further
results indicate that certain higher molecular weight components of
Catrix (R) have a significant effect on many segments of the body's
immune system.  The results of these later investigations have been
published in the Journal of Biological Response Modifiers.

9<PAGE>

GOVERNMENT REGULATION

          The production and marketing of the Company's products
and its research and development activities are subject to
comprehensive regulation by various federal, state and local
authorities in the United States and governmental authorities of
other countries.  Among others, the FDA and HPB exercise regulatory
authority over the development, testing, formulation, manufacture,
labeling, storage, record keeping, quality control, advertising and
promotion of the Company's products.  The Company believes that the
regulations and procedures involving the above in Canada are
essentially the same as the United States.  Accordingly, the
discussion set forth below is also applicable to the Company's
efforts to obtain regulatory approval in Canada.

          A New Drug may not be marketed in the United States until
it has satisfied rigorous testing procedures established and
approved by the FDA.  The drug may then be marketed only for the
specific indications, uses, formulation, dosage, forms, and
strengths approved by the FDA.  Similar requirements are imposed by
foreign regulators upon the marketing of a new drug in their
respective countries.

          The steps required before a pharmaceutical agent may be
marketed in the United States include (a) pre-clinical laboratory
and animal tests, (b) the submission to the FDA of an application
for an IND, which must become effective before human clinical
trials may commence, (c) well controlled human clinical trials to
establish the safety and efficacy of the drug, (d) the submission
of a detailed NDA to the FDA, and (e) the FDA approval of the NDA
prior to any commercial sale or shipment of the drug.  In addition
to obtaining FDA approval for each product, each domestic drug
manufacturing establishment must comply with Good Manufacturing
Practices (GMP) and are subject to biennial inspections by the FDA.
Foreign manufacturing establishments also must comply with GMP'S
and are subject to periodic inspection by the FDA or by local
authorities under agreement with the FDA.

          The results of the pre-clinical studies and clinical
trials are submitted to the FDA in the form of an NDA for approval
of the marketing and commercial shipment of the drug.  The NDA
includes information pertaining to the chemistry, formulation,
activity and manufacture of the drug and each component of the
final product, as well as details relating to the sponsoring
company.  Submission of an NDA does not assure FDA approval for
marketing.  The application review process takes more than two
years on average to complete, although FDA reviews of cancer
therapies, and other life-threatening diseases may be accelerated
and average less than two years.  However, the process may take
substantially longer if the FDA has questions or concerns about the
product.

10<PAGE>

          All of the Company's contract manufacturing facilities
will be subject to periodic inspections by the FDA and comparable
agencies from countries in the European Union.  If violations of
applicable regulations are discovered during these inspections, the
Company may be restrained from continued marketing of the
manufactured products.  Such facilities are also subject to
regulation regarding, among other things, occupational safety,
laboratory practices, the use and handling of radio-isotopes and
hazardous chemicals, prevention of illness and injury,
environmental protection and hazardous substance control.

          The product testing and approval process is likely to
take a substantial number of years and involves the expenditure of
substantial resources.  There can be no assurance that any approval
will be granted on a timely basis, or at all.  The FDA also may
require post-marketing testing and surveillance to monitor the
record of the product and continued compliance with regulatory
requirements.  Upon approval, a drug may be marketed only for the
approved indications in the approved dosage forms and at the
approved levels.  Adverse experiences with the product must be
reported to the FDA.  The FDA also may require the submission of
any lot of the product for inspection and may restrict the release
of any lot that does not comply with FDA standards, or otherwise
may order the suspension of manufacture, recall or seizure if non-
compliant product is delivered.  Product approvals may be withdrawn
if compliance with regulatory standards is not maintained or if
problems concerning safety or efficacy of the product are
discovered following approval.

          The Company also will be subject to foreign regulatory
authorities with respect to clinical trials and pharmaceutical
sales.  Whether or not the FDA approval has been obtained, approval
of a product by the comparable regulatory authorities of foreign
countries must be obtained prior to commencement of marketing of
the product in those countries.  The approval process varies from
country to country and the time required may be longer or shorter
than that required for FDA approval.

RAW MATERIALS AND MANUFACTURING.

          Catrix (R) is manufactured for the Company by contract
manufacturers.  These new manufacturers must be FDA-approved
pharmaceutical manufacturing facilities. The Company's food
supplement cartilage material, BIO-CARTILAGE (R) , and its
POLY-Nag (R) are manufactured in the United States and an additional
manufacturer is being developed in the Western Pacific Area.


          RAW MATERIALS. Catrix (R) is prepared from animal cartilage
tissue. The most accessible and easily processed source is bovine
tracheas collected from normal healthy beef cattle, subsequent to

11<PAGE>

slaughter.  Tracheas are cleaned, flash frozen and delivered to
qualified pharmaceutical manufacturing facilities.  The cattle from
which the tracheas are harvested are certified free of BSE (Bovine
Spongiform Encephylitis).

          REGULATORY REVIEW.  All Catrix (R) and production
procedures have been submitted in extensive detail to the FDA, the
HPB in Canada, and the Spanish Health Ministry in Spain, and
accepted as part of the review of the Company's official submissions
with respect to studying Catrix (R) in patients.

PATENTS AND PROPRIETARY TECHNOLOGY.

          The Company was granted and owns, by assignment, several
United States patents some of which have expired.  The most recent
patent granted was for the use of cartilage-based agents as an
anti-tumor agent and method (U.S. Patent #4,827,607).

          The Company also holds several patents in various foreign
countries.  While the Company believes that these patents may be
valuable, there is no assurance that any such patent will afford
the Company any material protection.  Furthermore, if any of its
patents should be infringed, there is no assurance that the Company
would be financially capable of protecting its interests.

COMPETITION.

          Competition in the anti-cancer, wound healing
pharmaceutical industry is based primarily on:  product performance,
including efficacy, safety, ease of use and adaptability to various
modes of administration; patient compliance; price;  acceptance by
physicians; marketing; and distribution.  The availability of patent
protection and orphan drug status, and the ability to obtain
government approval for testing, manufacturing and marketing are also
critical factors.  See "Business-Government Regulation."

          Most companies, including well-known pharmaceutical and
chemical companies, are marketing anti-cancer drugs and seeking to
develop new products and technologies for the treatment of cancer
and chronic non-healing wounds.  Many of these companies have
substantially greater financial and technical resources and
production and marketing capabilities than the Company.  In
addition, many such companies have had significantly greater
experience both in undertaking pre-clinical testing and human
clinical trials of new or improved pharmaceutical products, and
obtaining the approval of the FDA or other regulatory authorities
to market products for health care.  Accordingly, the Company's
competitors may succeed in obtaining regulatory approval of such

12<PAGE>

products before the Company obtains approval  of competitive
products.

HUMAN RESOURCES.

          EMPLOYEES AND CONSULTANTS.

          At August 1, 2000, the Company had three full time
employees, and retains several consultants to assist in the
administration of the Company and coordinating its ongoing research
and clinical trials.

          SCIENTIFIC ADVISORY BOARD.

          The Company benefits from consultations with prominent
scientists active in fields related to the Company's business.  For
this purpose, the Company maintains a Scientific Advisory Board.
At the Company's request, these advisors review the feasibility of
product development  programs under consideration, advise the
Company of research advances in areas related to the Company's
technology and aid in recruiting personnel.  It is intended that
the Scientific Advisors meet individually and in small groups with
the Company's management and scientists.  Because the scientific
advisors may have consulting or advisory positions with other
companies which may compete with the Company, the Company has
entered into confidentiality agreements with each member of the
Scientific Advisory Board.

          The Company's Scientific Advisory Board consists of Dr.
William T. Sherman, Vice President for Science-Elect. , as Chair,
and the following persons:

          Michael Bazinet M.D., is assistant Urologist, Attending
Staff at The Montreal General Hospital in Montreal, Quebec, Canada,
and Assistant Professor of Urology, McGill University.  Dr. Bazinet
has completed residencies in surgery and urology at Sherbrooke
University and a residency in urology at the Royal Victoria
Hospital.  He has served as a Research Fellow in Human Tumor
Immunology and as a Clinical Fellow in Urologic Oncology at
Memorial Sloan-Kettering Hospital in New York, NY.  He has authored
or co-authored numerous papers and presentations.

          Robert W. Gracy, Ph.D., principal advisor to the Company
for biochemistry, is professor of Chemistry and Associate Dean for
Basic Science and Research at The University of North Texas, Texas
College of Osteopathic Medicine in Fort Worth, Texas.  Dr. Gracy
received his Ph.D. from the University of California, in Riverside,
and performed postdoctoral work in molecular biology at the Albert
Einstein College of Medicine, where he was a postdoctoral fellow.
He became an Associate Professor of Chemistry at North Texas State
University, and subsequently a visiting professor of physiological

13<PAGE>

chemistry at the University of Wurtzburg.  Dr. Gracy has published
over 130 papers in peer-reviewed scientific journals and books.

          Carmelo Anthony Puccio, M.D., director of the Company's
Phase II Valhalla Study, is Assistant Professor of Medicine at New
York Medical College and an Attending Physician at Westchester
County Medical Center, both in Valhalla, New York.  Dr. Puccio
received his medical degree from the Universidad Autonoma de
Guadalajara, graduating first in his class.  He completed the Fifth
Pathway Program at the Albert Einstein College of Medicine in New
York City, and a residency in Internal Medicine at Maimonides
Medical Center.  He was a Research Fellow at New York Medical
College prior to attaining his present position.  Dr. Puccio's
papers have been published in several scientific journals.

ITEM 2. PROPERTIES
        ----------
          The Company owns no real property.  Its executive offices
in New York City, occupying approximately 2,200 square feet, are
currently leased under a five year lease ending January 31, 2004.
Management considers that its leased premises are well maintained
and sufficient for its present operations.



ITEM 3. LEGAL PROCEEDINGS
        -----------------
          None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        ---------------------------------------------------
          None

14<PAGE>

                             PART II
                             -------


ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
        --------------------------------------------------------
The Common Stock of the Company is traded in the over-the counter
market under the symbol "LCAR".  The following table sets forth,
for the periods indicated, the high and low bid quotations for the
Common Stock as reported by the National Quotation Bureau.

FISCAL YEAR ENDING MAY 31, 2000                HIGH      LOW
                                               ----      ---
Fourth Quarter                                $1.12     $.40
Third Quarter                                   .75      .29
Second Quarter                                  .65      .35
First Quarter                                   .72      .50


FISCAL YEAR ENDING MAY 31, 1999                HIGH      LOW
                                               ----      ---
Fourth Quarter                                  .78      .31
Third Quarter                                   .35      .17
Second Quarter                                  .36      .06
First Quarter                                   .37      .13




          On July 7, 2000 the closing bid price per share of Common
Stock, as reported by the National Quotation Bureau, was $.39.  As
of May 31, 2000 there were 527 holders of record of the Company's
Common stock.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
-----------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
OVERVIEW
--------
          Since its inception, the Company has primarily devoted
its resources to fund research, drug discovery and development.
In addition, the Company licenses its technology for
commercialization by other companies and in recent fiscal years,
the Company began sales of its proprietary bovine cartilage
material, BIO-CARTILAGE , as a food supplement, and direct sales to
consumers of a line of cosmetic products, which include the
Company's proprietary bovine cartilage material.  In the current
fiscal year, the Company made its initial two commercial shipments
of its CATRIX  Wound Dressing product pursuant to its agreement
with ICN IBERICA, S.A., Spain (see below).

15<PAGE>

     The Company has been unprofitable to date and may continue to
incur  operating losses in the foreseeable future. The Company has
sustained net losses of approximately $15 million from inception to
May 31, 2000.  The Company has primarily financed its research and
development activities through a public offering of Common Stock,
private placements of debt and equity securities, and in recent
years, revenues from licensing fees and product sales.


FISCAL YEAR ENDED MAY 31, 2000 COMPARED TO MAY 31, 1999
-------------------------------------------------------
     The Company's revenues increased in the year ended May 31,
2000 from the comparative prior fiscal year primarily due to the
initial two commercial shipments of its CATRIX  Wound Dressing
Product and to a license fee earned pursuant to the Company's
agreement with ICN IBERICA, S.A., Spain (see below) and an increase
of direct sales to consumers of a line of cosmetic products, which
include the Company's proprietary bovine cartilage material.  Total
costs and expenses during the year ended May 31, 2000 were 8%
higher than those of the comparative prior year.  Officer salaries
and interest expense decreased by $85,787 and $143,406 in fiscal
2000, respectively, due principally to the issuance of shares of
restricted common stock upon the conversion of advances from
related parties.  Excluding such decreases in fiscal 2000, total
costs and expenses increased by $306,722, or 62% in the current
fiscal year as compared to the fiscal year ended May 31, 1999.  The
increase was principally due to higher costs of sales related to
increased products' sales.

LIQUIDITY AND CAPITAL RESOURCES.

OVERVIEW

          The Company has had losses from operations in each of the
five years ended May 31, 2000.  This trend may continue in the
foreseeable future.  Working capital has been provided since the
Company's inception primarily from the sale of equity securities,
from borrowings (from its officers, directors, and shareholders and
from outside investors), and in recent years, from revenues from
licensing fees and product sales.

          During the current fiscal year $222,000 of Advances from
Stockholders were exchanged for 444,000 shares of the Company's
Common Stock.

PRESENT LIQUIDITY

          The Company's present liquidity position is critical.  As
of May 31, 2000 the Company's total assets exceed its liabilities
by $1,648.  The Company will require additional product sales or

16<PAGE>

funding during or, shortly after the end of, the current fiscal
quarter ending August 31, 2000, to sustain its operations.

          As a result of the history of losses incurred by the
Company, the net loss during the year ended May 31, 2000 of
($606,086), and the limited amount of funds currently available to
finance the Company's operations, the report of the Company's
independent Certified Public Accountants on the Financial
Statements as of May 31, 1999 and 2000 contain an explanatory
paragraph  indicating that the Company may be unable to continue in
existence.

          The Company's licensee of its CATRIX  product, in powder
form only, for topical wound healing purposes (see below) received
its initial two shipments from the Company in the year ended May
31, 2000.  In addition, the Company continued to sell a line of
cosmetic products and plans to continue to implement plans to sell
BIO-CARTILAGE  to the over-the-counter food supplement market. If
the Company's efforts to increase revenues are successful, the
Company may increase cash flow in order to allow the Company to
meet its obligations and sustain its operations.  The Company also
plans to try to obtain financing from additional advances from
stockholders and sales of unregistered shares of common stock.

          On March 16, 1999, the Company announced that it had
entered into an agreement with ICN IBERICA, S.A. ("ICNI", a wholly
owned subsidiary of ICN Pharmaceuticals, USA) of Barcelona, Spain
whereby ICNI acquired the semi-exclusive rights to distribute and
market the Company's CATRIX  WOUND CARE DRESSING in Spain for a
period of ten years.  Implementation of this Agreement was
contingent upon securing marketing approval for the product by the
Spanish Health Ministry.

          On September 13, 1999, the Company announced that its
CATRIX  Wound Dressing product was granted full marketing approval
by the Spanish Health Ministry of Madrid.  Under the prevailing
regulations of the European Union ("EU"), of which Spain is a
member, a drug/device approval in one member country renders the
product marketable in all member states.  Therefore, Catrix Wound
Dressing may now be sold throughout the 15 countries of the EU.

          On February 14, 2000, the Company announced that is had
completed its first commercial shipment of its CATRIX  Wound
Dressing product to ICNI pursuant to the March 16, 1999 Agreement
between the two companies.

          The Company has no material commitments for capital
expenditures at May 31, 2000.

17<PAGE>

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTART DATA
          -------------------------------------------
          See page F-1 for Lescarden Inc. Index to Financial
Statements.

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE
          ------------------------------------------------
          None.
                             Part III
                             --------


ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
          PERSONS, COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
          -----------------------------------------------------------

The executive officers and directors of the Company are as follows:

Name                                         Position
----                                         --------
Gerard A. Dupuis                             Chairman and
                                             Chief executive
                                             Officer, Director.

William T. Sherman, Ph.D.                    Vice President
                                             Science Elect.

Frank E. Berglas                             Director.

George E. Ehrlich, M.D.                      Director.

Charles T. Maxwell                           Director.


          Mr. Dupuis (age 62) is an attorney who practiced in New
York City for more than twenty five years.  He became General
Counsel, Secretary and a Director of the Company in February 1986.
On June 19, 1990 Mr. Dupuis was elected President and Chief
Executive Officer of the Company and in 1992 was elected chairman.
Mr. Dupuis is a graduate of Syracuse University and received his
law degree from Columbus School of Law, of the Catholic University
of America in Washington, D.C.

          Dr. Sherman (age 58) Executive Vice President for
Science-Elect of the Company, received his Bachelor of Science in
pharmacy from the Philadelphia College of Pharmacy and Science,
and a Ph.D. in pharmacology from Temple University.  Since 1989
Dr. Sherman has been an independent consultant to the
pharmaceutical industry.  From 1987 to 1989 he served as Vice
President of Martec Pharmaceutical Company.  Prior to that he was

18<PAGE>

Vice President for research and development for the Company.  Dr.
Sherman is a registered pharmacist in Pennsylvania and New Jersey
and has published in several scientific journals.

          Mr. Berglas (age 59) was the President and Chief
Executive Officer of Great Lakes American Reinsurance Co., a
position he has held for more than the past five years until his
retirement in 1997.  He became a Director of the Company on
December 1, 1993.  Mr. Berglas is a graduate of City College of
New York.

          Dr. Ehrlich (age 71) is the President of George E.
Ehrlich Associates, International Consultant Firm, a position he
has held for more than the past five years.  He became a Director
of the Company on March 2, 1995. Dr. Ehrlich is a graduate of
Harvard University and received his medical degree from Chicago
Medical School.

          Mr. Maxwell (age 68) was the Vice Chairman and Senior
Energy Strategist of C.J. Lawrence Inc., a member firm of the New
York Stock Exchange, for more than twenty-five years, until his
retirement in 1997.  Mr. Maxwell has acted as a consultant to
various oil companies and the United States Government on oil
policy matters.  He became a Director and Executive Vice
President of the Company in July 1997 and in April 2000 Mr.
Maxwell became Senior Energy Analyst with Weeden & Co.,
Greenwich, Connecticut.  Mr. Maxwell is a graduate of Princeton
University and Oxford University.

19<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION
          ----------------------
                         Annual Compensation      Long-Term
                         -------------------      Compensation
                                                  Awards
                                                  ------------
Name and                 Fiscal Year
Principal                Ended
Position                 May 31,        Salary $       Warrants (#)
--------                 -------        --------       ------------
Gerard A. Dupuis         2000          $150,000        1,000,000
President and CEO        1999          $150,000        1,700,000
                         1998          $152,000          100,000



Aggregated Option and Warrant Exercises in Last Fiscal Year and FY
End Option and Warrant Values.
------------------------------------------------------------------
              Shares              Number of      Value of
              Acquired            Unexercised    Unexercised
              on        Value     Options/       In-the-money
              Exercise  Realized  Warrants       Options
                                  at FY End (#)  Warrants
                                                 at FY End ($)
Name            (#)       ($)     Exercisable    Exercisable
------------------------------------------------------------------
G.A. Dupuis                       Warrants       Warrants
                                  3,920,312      $862,860


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT
         ---------------------------------------------------
         The following table sets forth, as of May 31, 2000, the
ownership of the Company's Common Stock by (I) each person who is
known by the Company to own Shares of record or beneficially,
more that (5%) of the Company's Common Stock, (ii) each of the
Company's  directors and executive officers and (iii) all
directors and executive officers as a group.  Except as otherwise
indicated, the stockholders listed in the table have sole voting
and investment powers with respect to the shares indicated.

20<PAGE>

         Name and                 Number of Shares
Title of Address of               Beneficially        Percent
Class    Beneficial Owner         Owned               of Class (1)
-----------------------------------------------------------------
Common   Gerard A. Dupuis (2)       4,101,229             15.63%
Stock    420 Lexington Avenue
         Suite 212
         New York, NY 10170


         Charles T. Maxwell (2)     7,004,307             31.17%
         420 Lexington Avenue
         Suite 212
         New York, NY 10170


         Frank E. Berglas (2)         325,000              1.44%
         420 Lexington Avenue
         Suite 212
         New York, NY 10170

         Peter B. Ruffin (2)        2,278,289             10.21%
         753 Forest Hills Drive
         Wilmington, NC

         George E. Ehrlich (2)        275,000              1.22%
         420 Lexington Avenue
         Suite 212
         New York, NY 10170

         Directors an              11,705,536            43.53%
         Officers as a group
         (2) (4 persons)


         (1) The percentages are calculated on the basis of
22,319,169 shares of Common Stock outstanding.  For the purpose
of calculating the percentage of shares of the Company's Common
Stock owned by any person, the shares issuable upon the exercise
of rights to acquire, owned by such a person if exercisable
within 60 days of May 31, 2000 are deemed outstanding, but such
shares are not deemed outstanding for the purpose of calculating
the percentage of Common Stock owned by any other person.  All
share ownership is direct unless otherwise indicated.

21<PAGE>

         (2) Includes 3,920,312, 225,000, 275,000 and
150,000 warrants to purchase the Company's Common Stock held by
Mr. Dupuis, Mr. Berglas, Dr. Ehrlich and Mr. Maxwell,
respectively.

         During the year ended May 31, 2000, Merrs. Maxwell and
Ruffin received shares of the Company's common stock upon
conversion of advances; they plan to file reports on Form 4
reporting their changes in beneficial ownership of shares of the
Company's common stock late, shortly after August 2000.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
         -----------------------------------------------
         None.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------
         (A) (1) EXHIBIT

         EXHIBIT NUMBER

         DESCRIPTION OF EXHIBIT

2.1           Plan of Reorganization dtd. January 15, 1997 (and
              Amended Disclosure Statement dtd. March 12,
              1997).****

3.1           Certificate of Incorporation of Registrant, as
              amended.*

3.2           By-Laws of Registrant, as amended.*

10.1          License Agreement between the Company and Donell,
              Inc., dated October 2, 1989, with amendments dated
              June 18, 1990 and March 16, 1992.*

10.2          Employment Agreement with John F. Prudden dated
              November 15, 1985, as amended July 14, 1992.*

10.3          Letter agreements with Donald K. Lourie dated
              November 15, 1985, February 11, 1988, and
              September 7, 1990.*

10.4          Lease for 6th floor office space at 790 Madison
              Avenue, New York, NY  dated August 19, 1986, as
              amended on April 18, 1991.*

22<PAGE>

10.5          Licensee Agreement between Lescarden Inc. and
              Catrix Research Ltd. Partnership dated June 4,
              1982.*

10.6          Research Agreement between Lescarden Inc. and
              Catrix Research Ltd. Partnership dated June 4,
              1983.*

10.7          Lease for office space at 420 Lexington Avenue,
              New York, NY  dated March 9, 1993.**

22.1          Subsidiaries of the Registrant.*

23.           Notice of annual meeting of shareholders and Proxy
              Statement for Annual Meeting of shareholders held
              October 19, 1992.**

27.           Financial Data Schedule

99.1          Award of the Arbitrator in the Matter of the
              Arbitration between John F. Prudden, M.D. and the
              Registrant dated September 6, 1995.***

*             Incorporated by reference to Registrant's Form S-1
              (Registration no. 33-50743) filed August 12, 1992.

**            Incorporated by reference to Registrant's Form 10-
              KSB for the fiscal year ended May 31, 1993.

***           Incorporated by reference to Registrant's Form 8K
              dated September 6, 1995.

****          Incorporated by reference to Registrant's Form 10-
              KSB for the fiscal year ended May 31, 1998.



(b)           Reports on Form 8-K
              -------------------
              There were no reports on Form 8-K filed by the
              Company during the fourth Quarter at the year
              ended May 31, 2000.

23<PAGE>

                             SIGNATURES


         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.

                                  LESCARDEN INC.


                                  By: S/Gerard A. Dupuis
                                      ------------------
                                  Gerard A. Dupuis, President
                                  August 23, 2000

         Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.


By: S/Gerard A. Dupuis            President, Principal Executive
    ------------------
    Gerard A. Dupuis              Officer, Principal Financial
    August 23, 2000               Officer, Principal Accounting
                                  Officer and Director



By: S/Frank E. Berglas            Director
    ------------------
    Frank E. Berglas
    August 23, 2000



By: S/George E. Ehrlich           Director
    -------------------
    George E. Ehrlich
    August 23, 2000


By: S/Charles T. Maxwell          Executive Vice President and
    --------------------
    Charles T. Maxwell            Director
    August 23, 2000

24<PAGE>



                                                               LESCARDEN INC.


                                               INDEX TO FINANCIAL STATEMENTS
----------------------------------------------------------------------------
Independent Auditor's Report                                             F-2
Balance Sheet as of May 31, 2000                                         F-3
Statement of Operations for the Years Ended May 31, 2000 and 1999        F-4
Statement of Stockholders' Equity (Deficiency)
for the Years Ended May 31, 2000 and 1999                                F-5
Statement of Cash Flows for the Years Ended May 31, 2000 and 1999        F-6
Notes to Financial Statements                                      F-7 - F-12

F-1
<PAGE>

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of
Lescarden Inc.


We have audited the accompanying balance sheet of Lescarden Inc. (the
"Company") as of May 31, 2000 and the related statements of operations,
stockholders' equity (deficiency), and cash flows for each of the two years
in the period then ended.  These financial statements are the responsibility
of the Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lescarden Inc. as of
May 31, 2000, and the results of its operations and its cash flows for each
of the two years in the period then ended in conformity with generally
accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from
operations, and has recognized limited revenue which raises substantial doubt
about its ability to continue as a going concern.  Management's plans in
regard to these matters are described in Note 1.  The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


GOLDSTEIN GOLUB KESSLER LLP
New York, New York

July 21, 2000

F-2
<PAGE>
                                                                 LESCARDEN INC.
<TABLE>
                                                                         BALANCE SHEET
<CAPTION>
May 31, 2000
--------------------------------------------------------------------------------------
ASSETS
<S>                                                                       <C>
Current Assets:
  Cash                                                                    $     43,449
  Accounts receivable                                                           71,532
  Inventory                                                                     99,880
--------------------------------------------------------------------------------------
   Total current assets                                                        214,861

Deferred Income Tax Asset, net of valuation allowance of $2,581,000               -
--------------------------------------------------------------------------------------
   Total Assets                                                           $    214,861
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable and accrued expenses                                   $    163,213
  Advance from stockholder                                                      50,000
--------------------------------------------------------------------------------------
   Total liabilities                                                           213,213
--------------------------------------------------------------------------------------
Commitments and Contingencies

Stockholders' Equity:
  Convertible preferred stock - $.02 par value; $1.50 liquidation value
   (aggregating $138,000); authorized 2,000,000 shares, issued and
   outstanding 92,000 shares                                                     1,840
  Common stock - $.001 par value; authorized 200,000,000 shares, issued
   and outstanding 22,319,169                                                   22,319
  Additional paid-in capital                                                15,259,731
  Accumulated deficit                                                      (15,282,242)
--------------------------------------------------------------------------------------
   Stockholders' equity                                                          1,648
--------------------------------------------------------------------------------------
   Total Liabilities and Stockholders' Equity                             $    214,861
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
</TABLE>

The accompanying notes and independent auditor's report should be read in
conjunction with the financial statements

F-3
<PAGE>
                                                                 LESCARDEN INC.
<TABLE>
                                                               STATEMENT OF OPERATIONS
<CAPTION>
Year ended May 31,                                                 2000           1999
--------------------------------------------------------------------------------------
<S>                                                        <C>            <C>
Revenue:
  Product sales                                            $    346,633   $     23,655
  License fees                                                   86,500           -
  Interest income                                                 1,448          1,101
--------------------------------------------------------------------------------------
Total revenue                                                   434,581         24,756
--------------------------------------------------------------------------------------
Costs and expenses:
  Cost of product sales                                         218,380         17,978
  Salaries:
    Officer                                                     223,738        309,525
    Office                                                       23,645         18,777
  Interest                                                       11,739        155,145
  Professional fees and consulting                              330,978        235,644
  Research and development                                       28,520         67,801
  Rent and office expenses                                      103,669         82,903
  Travel and meetings                                            47,191         51,631
  Taxes                                                           1,116            692
  Insurance                                                       1,513          1,009
  Other administrative expenses                                  50,178         22,033
--------------------------------------------------------------------------------------
Total costs and expenses                                      1,040,667        963,138
--------------------------------------------------------------------------------------
Net loss                                                   $   (606,086)   $  (938,382)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Net loss per common share - basic and diluted              $       (.03)   $      (.05)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Weighted-average number of common shares outstanding         21,901,021     18,513,379
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
</TABLE>

The accompanying notes and independent auditor's report should be read in
conjunction with the financial statements

F-4
<PAGE>
                                                                 LESCARDEN INC.
<TABLE>
                                                                                  STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
<CAPTION>
                                    Convertible
                                  Preferred Stock                Common Stock         Additional                   Stockholders'
                               Number of    Par Value       Number of    Par Value     Paid-in     Accumulated         Equity
                                 Shares      Amount           Shares     Amount        Capital     Deficit          (Deficiency)
--------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>       <C>             <C>          <C>        <C>           <C>                <C>
Balance at May 31, 1998          92,000    $  1,840        16,611,308   $ 16,611   $ 13,414,884  $ (13,737,774)     $  (304,439)
Issuance of common stock
 upon exercise of common
 stock warrants                    -           -              124,100        124         14,336           -              14,460
Issuance of common stock
 upon conversion of advances
 to related parties                -           -            4,989,761      4,990      1,110,380           -           1,115,370
Issuance of common stock
 warrants for services             -           -                 -          -           189,248           -             189,248
Net loss                           -           -                 -          -              -          (938,382)        (938,382)
--------------------------------------------------------------------------------------------------------------------------------
Balance at May 31, 1999          92,000       1,840        21,725,169     21,725     14,728,848    (14,676,156)          76,257
Issuance of common stock
 upon exercise of common
 stock warrants                    -           -               50,000         50          4,950           -               5,000
Issuance of common stock
 upon conversion of advances
 to related parties                -           -              444,000        444        233,295           -             233,739
Issuance of common stock
 in settlement of liability        -           -              100,000        100         49,900           -              50,000
Issuance of common stock
 warrants for services             -           -                 -          -           242,738           -             242,738
Net loss                           -           -                 -          -              -          (606,086)        (606,086)
--------------------------------------------------------------------------------------------------------------------------------
Balance at May 31, 2000          92,000    $  1,840        22,319,169  $  22,319   $ 15,259,731  $ (15,282,242)     $     1,648
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes and independent auditor's report should be read in
conjunction with the financial statements

F-5
<PAGE>
                                                                 LESCARDEN INC.
<TABLE>

                                                                      STATEMENT OF CASH FLOWS
<CAPTION>
Year ended May 31,                                                        2000           1999
---------------------------------------------------------------------------------------------
<S>                                                                 <C>            <C>
Cash flows from operating activities:
  Net loss                                                          $ (606,086)    $ (938,382)
  Adjustments to reconcile net loss to net cash used in
   operating activities:
    Issuance of common stock for interest                               11,739        155,145
    Issuance of common stock warrants for services                     242,738        189,248
    Changes in operating assets and liabilities:
      Increase in accounts receivable                                  (71,532)          -
      Decrease (increase) in inventory                                  91,436       (156,250)
      (Increase) decrease in prepaid expenses                           36,000        (36,000)
      Increase in accounts payable and accrued expenses                 15,799         92,746
      Increase (decrease) in unearned revenue                          (43,250)        43,250
      Decrease in security deposit                                       3,080           -
---------------------------------------------------------------------------------------------
     Net cash used in operating activities                            (320,076)      (650,243)
---------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Proceeds from issuance of common stock                                  -            14,460
  Advances from stockholder and related parties                        272,000        695,000
---------------------------------------------------------------------------------------------
     Cash provided by financing activities                             272,000        709,460
---------------------------------------------------------------------------------------------
Net increase (decrease) in cash                                        (48,076)        59,217

Cash at beginning of year                                               91,525         32,308
---------------------------------------------------------------------------------------------
Cash at end of year                                                 $   43,449     $   91,525
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

Supplemental schedule of noncash financing activities:

  Conversion of advances received from related parties
   to common stock                                                  $  222,000     $  960,225
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
  Issuance of common stock warrants for services                    $  242,738     $  189,248
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
  Issuance of common stock for interest                             $   11,739     $  155,145
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
  Conversion of accounts payable and accrued expenses
   into common stock                                                $   55,000
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes and independent auditor's report should be read in
conjunction with the financial statements

F-6
<PAGE>

                                                                 LESCARDEN INC.

                                                  NOTES TO FINANCIAL STATEMENTS



1.     OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

The Company is engaged in the research, testing and development of medications
for the control and cure of various diseases and the licensing of its
technologies for commercialization by other companies.  In its research and
testing to date, the Company has discovered and is primarily investigating
Catrix , a complex of mucopolysaccharides derived from bovine cartilage.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern.  As shown in the financial statements, the
Company has suffered recurring losses from operations during the years ended
May 31, 2000 and 1999 and has had limited revenue in those years.  At
May 31, 2000, the Company had stockholders' equity attributable to a capital
infusion through the conversion of related party advances into common shares
during the year.  These factors indicate that the Company may be unable to
continue as a going concern.  In the past few years, management has
implemented plans to license its Catrix  product for topical wound healing
purposes and sell a line of cosmetic products and enter the food supplement
business.  During the year ending May 31, 2001, management expects the
continuation of these plans.  If successful, this may increase cash flow
which would allow the Company to meet its obligations and sustain operations.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

Revenue from royalties and license fees is recorded when the funds are
earned.  Revenue from the product sales is recognized upon shipment of the
product.

Research and development costs are charged to costs and expenses in the year
incurred.

Net loss per common share is based upon the weighted-average number of common
shares outstanding during the year.  Stock options, warrants and convertible
preferred stock are excluded from the computation of diluted net loss per
common share since they would have an antidilutive effect.

Inventory, consisting principally of Catrix  and BIO-CARTILAGE supplies and
Catrix  topical wound treatment creams and solutions, is stated at the lower
of cost, determined by the first-in, first-out method, or market.

The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 123, Accounting for Stock-based Compensation.  The Company has elected to
apply Accounting Principles Bulletin ("APB") Opinion No. 25 and related
interpretations in accounting for its stock options issued to employees and
has adopted the disclosure-only provisions of SFAS No. 123.

The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates by management.  Actual
results could differ from those estimates.  Management does not believe that
any recently issued, but not yet effective, accounting standards if currently
adopted would have a material effect on the accompanying financial statements.

F-7
<PAGE>
                                                                 LESCARDEN INC.

                                                  NOTES TO FINANCIAL STATEMENTS

2.     INVENTORY:

Inventory at May 31, 2000 consists of the following:

Finished goods                                                        $  6,930
Raw materials                                                           92,950
------------------------------------------------------------------------------
                                                                      $ 99,880
------------------------------------------------------------------------------
------------------------------------------------------------------------------

3.     ADVANCES FROM RELATED PARTIES:

During the year ended May 31, 1999, certain members of the Company's board of
directors loaned the Company $695,000.  These loans were noninterest-bearing
and due on demand.  The Company converted these advances along with $265,225
of advances from a prior period into common stock during the year ended
May 31, 1999.  The conversion terms were based on the fair market value of the
Company's stock at the time of conversion.  The Company recorded an interest
charge of $155,145 as a result of the conversion in the accompanying statement
of operations.

During the year ended May 31, 2000, certain related parties loaned the Company
$272,000.  The loans were noninterest-bearing and due on demand.  The Company
converted $222,000 of these advances into common stock during the year ended
May 31, 2000.  The conversion terms were based on the fair market value of the
Company's stock at the time of conversion.  The Company recorded an interest
charge of $11,739 as a result of the conversion
in the accompanying statement of operations.

4.     STOCK OPTIONS AND WARRANTS:

In the year ended May 31, 1993, the Company approved the "1992 Employee
Incentive Stock Plan" (the "1992 Plan").  The 1992 Plan authorized the issuance
of stock options, restricted shares of stock and stock bonus awards to eligible
participants.  The 1992 Plan provides for the reservation and availability of
2,000,000 shares of common stock, subject to adjustment for future stock
splits, dividends, reorganizations and other similar events, at exercise prices
not less than the fair market value at the date of grant.  Options are
exercisable from 12 months after the date of grant and expire 10 years from the
date of grant.  At May 31, 2000, no options were granted under the 1992 Plan.

Under previous stock option plans which expired in November 1991, the Company
had 80,000 options outstanding and canceled during the year ended May 31, 1999.


F-8
<PAGE>
                                                                 LESCARDEN INC.

                                                  NOTES TO FINANCIAL STATEMENTS

Transactions relating to warrants are as follows:

                                           Number of         Weighted-
                                           Shares and         average
                                            Warrants       Exercise Price
                                          Exercisable        Per Share
-------------------------------------------------------------------------
Balance at June 1, 1998                    4,017,839                 $.39
Granted                                    2,205,000                  .13
Expired                                     (550,000)                 .12
Exercised                                   (124,100)                 .12
-------------------------------------------------------------------------
Balance at May 31, 1999                    5,548,739                  .32
Granted                                    1,812,219                  .35
Expired                                     (838,000)                 .94
Exercised                                    (50,000)                 .10
-------------------------------------------------------------------------
Balance at May 31, 2000                    6,472,958                 $.25
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The following table summarizes the information about warrants outstanding
at May 31, 2000:

                                   Warrants Outstanding and Exercisable

                                               Weighted-
                                                average      Weighted-
                                               Remaining      average
                  Range of        Number       Contractual    Exercise
               Exercise Price  Outstanding    Life (Years)      Price
----------------------------------------------------------------------

                $.10              905,000        3.00        $.10
                 .12              500,000        3.83         .12
                 .15            1,175,000        3.15         .15
                 .15625           375,061        6.96         .15625
                 .20              350,000        4.35         .20
                 .24               25,000        2.42         .24
                 .25              100,000         .37         .25
                 .30              850,000        5.15         .30
                 .34              155,000        2.52         .34
                 .35            1,760,000        4.43         .35
                 .40               52,219        4.54         .40
                 .50               30,000        5.56         .50
                 .75              195,678         .34         .75
----------------------------------------------------------------------
                $.10 - $.75     6,472,958                    $.25
----------------------------------------------------------------------

F-9
<PAGE>

                                                                 LESCARDEN INC.

                                                  NOTES TO FINANCIAL STATEMENTS

The Company has elected, in accordance with the provisions of SFAS No. 123,
to apply the accounting rules under APB Opinion No. 25 and related
interpretations in accounting for its stock warrants and to present the
disclosure-only information as required by SFAS No. 123.  If the Company
had elected to recognize compensation cost based on the fair value of the
warrants granted at the grant date as prescribed by SFAS No. 123, the
Company's net loss and net loss per common share for the years ended
May 31, 1999 and 1998 would approximate the pro forma amounts indicated in
the table below.

Year ended May 31,                              2000              1999
----------------------------------------------------------------------
Net loss - as reported                  $   (606,086)     $   (938,382)
----------------------------------------------------------------------
----------------------------------------------------------------------
Net loss - pro forma                    $(1,016,836)       $(1,267,737)
----------------------------------------------------------------------
----------------------------------------------------------------------
Net loss per common share - as reported $      (.03)       $      (.05)
----------------------------------------------------------------------
----------------------------------------------------------------------
Net loss per common share - pro forma   $      (.05)       $      (.07)

The fair value of each warrant grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for the years ended May 31, 2000 and 1999, respectively:
expected volatility of 1.41 and 1.48; risk-free interest rates of 6.2% and
4.7%; and expected lives of five years.



5.     COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS:

Substantially all of the Company's purchases of its primary raw material for
the Company's merchandise inventory for the year ended May 31, 2000 was from
one vendor.

During the year ended May 31, 1999, the Company entered into a noncancelable
lease with an unrelated third party to rent office space.  The lease, which
expires in January 2004, is subject to real estate tax escalations and
electrical inclusions.  In lieu of security deposit, the Company opened a
$75,000 irrevocable letter of credit with a financial institution.  A member
of the Company's board of directors is a guarantor of the letter of credit
and the lease.  The aggregate minimum rental payments under this lease are as
follows:


Year ending May 31,

        2001                                                  $ 68,600
        2002                                                    71,500
        2003                                                    71,500
        2004                                                    47,700
----------------------------------------------------------------------
                                                              $259,300
----------------------------------------------------------------------
----------------------------------------------------------------------

F-10
<PAGE>

Rent expense charged to operations for the years ended May 31, 2000 and 1999
amounted to approximately $81,000 and $58,000, respectively.

During the year ended May 31, 1999, the Company entered into a three-year
agency agreement (as amended during the year ended May 31, 2000) with a third
party (the "Agent"), which is representing the Company for the purpose of
securing marketing approval in Spain for Catrix (R) (in powder form) as a
wound treatment.  The agency agreement also calls for the Agent to identify
commercial enterprises able and willing to distribute and market Catrix (R) in
each of the countries in the European Union.  The Company has agreed to
pay finders' fees and commissions to the Agent, as defined.

In March 1999, the Company entered into a 10-year license agreement in which
it designated a company located in Spain as a semi-exclusive licensee
(the "Licensee") of Catrix (R) Wound Dressing (the "Product").  Upon the
signing of the license agreement, the Company received 50% of an up-front fee
it is charging for distributorship rights.  The balance was paid during the
fiscal year ended May 31, 2000, upon the Company having secured registration
and marketing approval for the Product from the Spanish Health Ministry as
required under the agreement.  The Licensee is required to secure shipments of
the Product in minimum order amounts and at prices as defined by the license
agreement.  In the event that the Licensee's gross margins on the Product fall
below a certain margin, or in the event that the exchange rate between the
Euro and the U.S. dollar shall vary by 20% for more than 30 days, the parties
agree to renegotiate the terms of the price agreement.

A revised agreement with a former Chairman, which is for a period of 20 years,
provides for a minimum annual consultancy fee/pension payment of $25,000 to be
paid in any year in which the Company's net worth is in excess of $2,500,000
or pretax profits of $500,000 are achieved.  In the event of the death of this
former Chairman, any amounts due under this agreement will be payable to his
estate.  Additionally, the agreement provides for the issuance of nonqualified
stock options to purchase 100,000 shares of the Company's common stock.  Under
the agreement, pension costs cannot be reasonably estimated principally
because the conditions required to create a pension liability do not exist at
May 31, 2000 and are not anticipated in the foreseeable future.

In June 1982, individuals related to the Company formed the Catrix (R)
Research Limited Partnership (the "Partnership").  The Company entered into
research and license agreements with the Partnership.  On June 1, 2000, the
Partnership was dissolved and the agreement terminated.



6.     STOCKHOLDERS' EQUITY:


The convertible preferred stock has a preference upon liquidation of $1.50 per
share; is convertible, at the option of the holder, into one share of the
Company's common stock, for each share of preferred stock; and is callable, at
the option of the Company, at such time as its net worth exceeds $3,000,000,
for $1.50 per share.  Additionally, holders of preferred stock are entitled to
vote for directors of the Company on a one-share/one-vote basis.

F-11
<PAGE>

                                                                 LESCARDEN INC.
                                                  NOTES TO FINANCIAL STATEMENTS

7.     INCOME TAXES:

The Company has net operating loss carryforwards of approximately $7,590,000
available to reduce future taxable income which expire in various years
through 2020.


The utilization of net operating loss carryforwards may be limited as a result
of cumulative changes in the Company's stock ownership.

Deferred income taxes reflect the impact of net operating loss carryforwards.
In recognition of the uncertainty regarding the ultimate amount of income tax
benefits to be derived from the Company's net operating loss carryforwards,
the Company has recorded a valuation allowance for the entire deferred tax
asset.  The deferred income tax asset is comprised of the following at
May 31, 2000:

Net operating loss carryforwards                           $ 2,581,000
----------------------------------------------------------------------
Gross deferred tax assets                                    2,581,000
Valuation allowance                                         (2,581,000)
----------------------------------------------------------------------
        NET DEFERRED INCOME TAX ASSET                      $   - 0 -
----------------------------------------------------------------------
----------------------------------------------------------------------


8.     MAJOR CUSTOMERS:

During the year ended May 31, 2000, sales to one foreign customer accounted
for approximately 86% of product sale revenue.  This customer comprises
approximately 89% of the Company's accounts receivable at May 31, 2000.

F-12
<PAGE>