SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                ________________
                                    Form 10-K

(MARK  ONE)

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

                   For the fiscal year ended December 31, 2000

                                       OR

[   ]     TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE  ACT  OF  1934

         For the transition period from _____________ to ______________

                         Commission File Number 0-27212
                                 ENDOCARE, INC.
             (Exact name of registrant as specified in its charter)

                            Delaware     33-0618093
             (State or other jurisdiction of     (I.R.S. Employer
            incorporation or organization)     Identification No.)

                  7 Studebaker, Irvine, California     92618
            (Address of principal executive offices)     (Zip code)

       Registrant's telephone number, including area code: (949) 595-4770
        Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $.001 par value;
           Rights to Purchase Shares of Participating Preferred Stock
                                (Title of Class)

     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes  [X]  No  [   ]

     Indicate  by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form-10K.  [  ]

     The  number  of  shares  of the registrant's common stock outstanding as of
March  13,  2001  was  15,222,186.

The  aggregate  market  value  of  the  registrant's  common  stock  held  by
non-affiliates  of  the  registrant  was $86,073,126 (computed using the average
bid  and  asked  prices quoted on the Nasdaq National Market on March 13, 2001).
Shares  of Common Stock held by each officer and director and by each person who
owns  5% or more of the outstanding Common Stock have been excluded in that such
persons  may be deemed to be affiliates.  This determination of affiliate status
is  not  necessarily  a  conclusive  determination  for  other  purposes.

The  information  required  to  be  included  in  Part  III of this Form 10-K is
incorporated  by  reference to the definitive proxy statement to be filed by the
registrant  no  later  than  120  days after December 31, 2000, the close of its
fiscal  year,  for the registrant's annual meeting of stockholders to be held on
May  22,  2001.

                                 ENDOCARE, INC.
                       INDEX TO ANNUAL REPORT ON FORM 10-K
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                             ITEM NUMBER AND CAPTION
                             -----------------------

<TABLE>
<CAPTION>

                                                                                                   PAGE
PART I                                                                                           NUMBER
------                                                                                           ------
<S>           <C>                                                                                   <C>
    Item 1.   Business                                                                                3
    Item 2.   Properties                                                                             14
    Item 3.   Legal Proceedings                                                                      14
    Item 4.   Submission of Matters to a Vote of Security Holders                                    15

PART II
-------

    Item 5.   Market for Registrant's Common Equity and Related Shareholder Matters                  16
    Item 6.   Selected Financial Data                                                                18
    Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations  18
    Item 7A.  Quantitative and Qualitative Disclosures about Market Risk                             22
    Item 8.   Financial Statements and Supplementary Data                                            22
    Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   22

PART III
--------

    Item 10.  Directors and Executive Officers of the Registrant                                     23
    Item 11.  Executive Compensation                                                                 23
    Item 12.  Security Ownership of Certain Beneficial Owners and Management                         23
    Item 13.  Certain Relationships and Related Transactions                                         23

PART IV
-------

    Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K                       24
</TABLE>


<PAGE>
                                     PART I

     Statements  in  this  report  which  are  not  historical  facts  are
forward-looking  statements  within  the meaning of the federal securities laws.
These  statements may contain words such as "expects," "anticipates," "intends,"
"plans,"  "believes,"  "estimates,"  or other wording indicating future results.
Forward-looking  statements  are  subject  to  risks  and uncertainties.  Actual
results  may  differ  materially  from  the results discussed in forward-looking
statements.  Factors  that  could  cause  actual  results  to  differ materially
include,  but are not limited to, those discussed under "Factors That May Affect
Future  Results  and  Trading  Price  of  Common  Stock" under Item 1 below, and
elsewhere  in  this  report.  We undertake no obligation to revise or update any
forward-looking  statements  to reflect any event or circumstance that may arise
after  the date of this report.  References herein to "Endocare," "the Company,"
"we,"  "our,"  and  "us"  refer  to  Endocare,  Inc.,  a  Delaware  Corporation.

ITEM  1.     BUSINESS

GENERAL

     We  are  a  vertically-integrated  medical  device  company  that develops,
manufactures and markets cryosurgical and stent technologies for applications in
oncology  and  urology.  We  have  concentrated  on  developing  devices for the
treatment  of  the two most common diseases of the prostate, prostate cancer and
benign  prostate  hyperplasia.  We are also developing cryosurgical technologies
for  treating  tumors  in  other organs, including the kidney, breast and liver.

     We  have developed and recently introduced an innovative, second generation
cryosurgical  system  for  the treatment of prostate cancer. The Cryocare System
(TM) offers the advantage of controlled, targeted freezing of the tumor with the
benefit  of  faster  patient recovery and minimal complications.  The system was
launched in July 1999 following the initiation of national Medicare coverage for
cryosurgical  procedures  as  a  primary  treatment  alternative  for  localized
prostate cancer.  We also operate a mobile cryosurgery business in Florida which
provides  cryosurgical  equipment for the treatment of prostate and liver cancer
on  a  per  procedure  basis.

     We  have  also developed new therapies for the improved treatment of benign
prostate  hyperplassia,  or BPH. Our initial product development efforts for BPH
involve  the  use  of  stent  technology to provide both immediate and long-term
relief  to  BPH  patients.  Our  Horizon Prostatic Stent (TM) is a nitinol-based
stent  with  shape  memory  characteristics  for  easy  placement via a catheter
following  surgical  intervention  of  the  prostate  and  convenient atraumatic
removal  of the stent following the healing process. We believe that our Horizon
Prostatic  Stent  will  address  one  of  the  major  issues of BPH therapy, the
immediate  relief of patients following thermotherapy and surgical resection. In
1999, we  completed  phase two of the Horizon Prostatic Stent United States Food
and Drug Administration, or FDA, study and received approval to expand the trial
to the pivotal study, which is the final study before clearance can be  obtained
for broader use.  We expect to complete the  FDA study during the second half of
2001. In addition, we are exploring the use of the stent for long-term relief of
BPH  without  the  need  for  thermotherapy  in  a  subset  of  the  patient
population.

PROSTATE  CANCER

MARKET  BACKGROUND

     The  incidence  of  prostate cancer has risen steadily since 1980 to become
the  second  most  common cause of cancer-related deaths among men. The dramatic
increase  in  prostate  cancer  cases  has  led  to  heightened awareness of the
disease,  which  has  led  to increased rates of testing and improved diagnostic
methods.

     Therapeutic  alternatives  for patients with prostate cancer have been both
limited  and  unattractive.  Current  treatment options include radical surgery,
radiation  therapy,  hormone  therapy, cryotherapy and "watchful waiting." These
options  are  evaluated using a number of criteria, including the patient's age,
physical  condition  and  stage  of  the  disease.  However,  due  to  the  slow
progression  of  the disease, the decision for treatment typically is based upon
the  severity  of  the  condition  and  the  resulting  quality  of  life.

     Radical  prostatectomy  is most often the therapy of choice due to the high
degree  of  confidence in surgically removing the cancerous tissue, particularly
for  patients  having  more advanced stages of the disease and those who fail to
respond  to  less invasive alternatives. The procedure is dependent on the skill
of  the  surgeon  and  is  often  associated  with  high  rates  of  impotence,
incontinence  and  operative  mortality.

     Radiation therapy for prostate cancer includes both external radiation beam
and  interstitial  radioactive  seed therapies.  External beam radiation therapy
emerged  as  one  of  the  first alternatives to radical prostatectomy; however,
studies  have shown that the success rate of this procedure is not comparable to
that  of  radical  prostatectomy.  Interstitial  radioactive  seed therapy, also
referred to as brachytherapy, is the permanent placement of radioactive seeds in
the  prostate.  Brachytherapy  has been shown to be most effective for localized
tumors  caught  in  the  early  stage  of  disease  development.

     Cryosurgery, freezing tissue to destroy tumor cells, was first developed in
the  1960's.  During  this  period, the use of "cold probes," or cryoprobes, was
explored  as  a  method  to  kill  prostate  tissue without resorting to radical
surgery.  Although  effective  in killing cancer cells, the inability to control
the  amount  of tissue frozen prevented broad use and development of cryotherapy
for  prostate  cancer.

     In the late 1980's, progress in ultrasound imaging allowed for a revival in
the  use  of  cryosurgery.  Using ultrasound, the cryoprobe may be guided to the
targeted  tissue  from  outside the body through a small incision. The physician
activates  the cryoprobe and uses ultrasound to monitor the growth of ice in the
prostate  as  it is occurring. When the ice encompasses the entire prostate, the
probe  is  turned  off. This feedback mechanism of watching the therapy as it is
administered  allows the physician precise control during application. Published
studies  suggest  that  cryosurgery  may  be  able to deliver disease free rates
comparable  to  radical  surgery,  but  with  the  benefit  of  lower  rates  of
incontinence  and  mortality.

CRYOCARE  SYSTEM

     We  have  developed  the  Cryocare  System,  a  next-generation cryosurgery
system,  to allow the urologist to treat prostate cancer in a minimally invasive
manner.  The  Cryocare System has been designed to freeze tissue much faster and
with  more  control  than  existing  systems.

     The  Cryocare  System  incorporates enhanced control mechanisms to minimize
the  risk  of  unintended  damage  to  tissue  surrounding  the  prostate.  Most
significantly,  the  Cryocare probes stop freezing instantly. Use of four to six
temperature  probes  selectively  placed in the prostate near the rectal tissue,
sphincter  muscles  (which  control continence) and neurovascular bundles (which
control  potency)  enables  the  physician  to  monitor  temperatures  of tissue
adjacent  to the prostate. Combining these control features allows the physician
to  treat  prostate  cancer with a high degree of control and precision that was
not  previously  possible.

     The  Cryocare  System  has  been  cleared  for marketing by the FDA and was
commercially launched in July 1999 following the initiation of national Medicare
coverage  for  cryosurgical  procedures  as  a primary treatment alternative for
localized  prostate cancer. Through direct sales of cryosurgical systems and its
cryosurgical  system  placement  program,  we  have  installed  Cryocare Systems
primarily  in  North  America,  with  over  1,000  patients treated to date.  In
December  2000,  the  Health  Care  Financing  Administration  approved National
Medicare  coverage for cryosurgical procedures to treat prostate cancer patients
who  have  failed  radiation  therapy  and  the  coverage is scheduled to become
effective  July  2001.

     We  own  6  patents  relating to the technology used to create the freezing
process  and  to  precisely control the shape of the freeze zone produced by the
Cryoprobes  (TM)  and covering our Cryoprobe technology. The technology may also
allow  for  expanded  therapeutic  applications  by  tailoring  the  Cryoprobe
performance  to other anatomical targets, such as treating tumors in the kidney,
breast  and  liver.

BENIGN  PROSTATE  HYPERPLASIA

MARKET  BACKGROUND

     BPH,  which  affects  a significant number of adult men, is a non-cancerous
enlargement  of  the innermost part of the prostate. BPH frequently results in a
gradual  squeezing  of  the part of the urethra which runs through the prostate.
This  causes  patients  to  experience a frequent urge to urinate because of the
incomplete emptying of the bladder and a burning sensation or similar discomfort
during  urination.  The  obstruction  of urinary flow can also lead to a general
lack  of  control over urination, including difficulty initiating urination when
desired  as  well  as difficulty preventing urinary flow because of the residual
volume  of urine in the bladder (a condition known as urinary incontinence). BPH
symptoms  may  disturb sleep by causing the BPH sufferer to awaken frequently to
urinate.  Although  symptoms  occasionally  stabilize  or  diminish  without
intervention,  they generally become more severe over the course of the disease.
Left  untreated,  the  obstruction  caused  by  BPH  can  lead  to acute urinary
retention  (complete inability to urinate), serious urinary tract infections and
permanent  bladder  and  kidney  damage.

     Most  males  will  eventually  suffer  from  BPH. In the United States, the
incidence  of  BPH  for  men  in their fifties is approximately 50% and rises to
approximately  80%  by  the  age  of  80. The general aging of the United States
population,  as  well  as  increasing  life  expectancies,  is  anticipated  to
contribute  to  the  continued  growth  in  the  number  of  BPH  sufferers.

     Patients  diagnosed with BPH generally have four options for treatment: (i)
"watchful  waiting,"  (ii)  drug therapy; (iii) surgical intervention, including
transurethral  resection  of  the prostate and laser assisted prostatectomy; and
(iv)  new,  less  invasive  thermal  therapies.  Currently, approximately 25% of
patients  with BPH are actually treated with surgical intervention. Treatment is
generally  reserved  for  patients  with  intolerable  symptoms  or  those  with
significant  potential  symptoms  if  treatment were withheld. A large number of
patients  delay  discussing their symptoms or elect "watchful waiting" to see if
the  condition  remains  tolerable.  We believe the development of less invasive
procedures  for  treatment  of BPH could result in a substantial increase in the
number  of  BPH  patients  who  elect  to  receive  interventional  therapy.

     Drug Therapies: Some drugs are designed to shrink the prostate, or TURP, by
inhibiting  or slowing the growth of prostate cells. Other drugs are designed to
relax  the  muscles  in  the  prostate  and  bladder  neck  to  relieve urethral
obstruction.  Current  drug  therapy generally requires daily administration for
the  duration  of  the  patient's  life.

     Surgical Interventions: Transurethral resection of the prostate is the most
common  surgical  procedure and involves the removal of the prostate's innermost
core  in  order  to  reduce  pressure  on  the  urethra.  TURP  is  performed by
introducing  an  electrosurgical  cutting  loop  through  a  cystoscope into the
urethra  and  "chipping out" both the prostatic urethra and surrounding prostate
tissue  up to the surgical capsule, thereby completely clearing the obstruction.
The  average TURP procedure requires a hospital stay of approximately four days.

     Less  Invasive  Thermal  Therapies:  Other  technologies developed or under
development  are  non-surgical, catheter-based therapies that use thermal energy
to  preferentially  heat  diseased  areas  of  the  prostate  to  a  temperature
sufficient  to  cause  cell  death.  Thermal energy forms being utilized include
microwave,  radio  frequency and ultrasound energy. The procedures are typically
performed  in  an  outpatient setting under local anesthesia. Both microwave and
radio  frequency  therapy  systems  are  currently  being  marketed  worldwide,
including the United States, where the first FDA clearances were obtained in May
and  October  1996,  for  microwave  and  radio  frequency,  respectively.

HORIZON  PROSTATIC  STENT

     We have developed a new urological stent which has been designed to provide
immediate  relief  for  BPH  patients  who  undergo  thermotherapy.  Our Horizon
Prostatic  Stent  is  made  of  nitinol,  a  titanium metal alloy that employs a
feature  called  shape  memory.  This  shape  memory  feature allows the Horizon
Prostatic  Stent  to  be  soft  and  flexible in its relaxed state, allowing the
device  to be introduced in a relatively pain-free manner using a catheter. When
the device is heated to its transition temperature, the device self-expands to a
pre-determined  shape.  In  the  case  of  the  Horizon  Prostatic  Stent,  the
predetermined  shape is that of a rigid tube, or stent. The catheter is inserted
using  a  local  anesthetic and positioned in the prostatic urethra under direct
vision. The stent is activated by body heat, causing the shape memory to open to
its tube-like position. After approximately 30 days, the stent is removed by the
physician  by  flushing  cool  water  through an endoscope, causing the stent to
return to its soft, relaxed state. The stent is removed by retrieving it through
the  working  channel  of  the  endoscope.

     We  have  completed  phase  two  of the FDA clinical trials for the Horizon
Prostatic  Stent  and  have received approval to expand the trial to the pivotal
study,  which  is  the  final study before clearance can be obtained for broader
use.  Because  the stent will be removed from the patients within 30 to 60 days,
we  expect  that  the  trials  can  be completed quickly and that the regulatory
process  may  be expedited. However, there can be no assurance that the FDA will
not  require  more  time  consuming  and  extensive clinical studies or that FDA
approval will ever be obtained.  We have 9 patents surrounding our inventions in
the  stent  product  line.

LEVERAGING  CORE  TECHNOLOGIES

     We  view  our  cryosurgical  technology  as  a  core technology that can be
applied in the treatment of other types of cancers.  In 1999, we entered into an
alliance  with  Sanarus  Medical, Inc., a women's healthcare company, to develop
market  applications  in  breast  cancer and benign breast tumors.   We are also
exploring  clinical  applications  in  cryoablation  of  kidney,  lung and liver
tumors.


<PAGE>

PRODUCTS

     Endocare  has  developed  the  following  products:

<TABLE>
<CAPTION>

COMMERCIAL
PRODUCT NAME              TARGETED INDICATION      STATUS      LAUNCH DATE
<S>                       <C>                      <C>         <C>
Cryocare-4 Probe System   General Surgery          Marketing   May 1996
Cryocare-8 Probe System   Prostate Cancer          Marketing   July 1999
FastTrac                  Prostate Cancer          Marketing   March 2001
CryoGuide                 Prostate Cancer          Marketing   March 2001
Horizon Prostatic Stent   Acute Urinary Retention  FDA Trials  ------
</TABLE>


PATENTS  AND  INTELLECTUAL  PROPERTY

     Our  policy  is to secure and protect intellectual property rights relating
to  our  technology  through  patenting  inventions  and  licensing  others when
necessary.  While  we  believe  that  the  protection of patents and licenses is
important  to  our  business,  we  also  rely  on  trade  secrets,  know-how and
continuing technological innovation to maintain our competitive position.  Given
our  technology  and  patent  portfolio, we do not consider the operation of our
business  to  be  materially  dependent upon any one patent, group of patents or
single  technological  innovation.

     Our  policy  is  to  sell  our  products  under  trademarks  and  to secure
Trademark  protection  in  the  United States and  worldwide where possible.  We
believe the protection  of  our  trademarks  is  important  to  our  business.

     No  assurance can be given that our processes or products will not infringe
patents  or  proprietary  rights of others or that any license required would be
made available under any such patents or proprietary rights, on terms acceptable
to  us  or  at  all. From time to time, we have received correspondence alleging
infringement  of  proprietary rights of third parties. No assurance can be given
that  any  relevant  claims  of  third  parties would not be upheld as valid and
enforceable,  and  therefore  we  could be prevented from practicing the subject
matter  claimed  or  would be required to obtain licenses from the owners of any
such  proprietary  rights  to  avoid  infringement.

     We seek to preserve the confidentiality  of our technology by entering into
confidentiality  agreements  with  our employees, consultants, customers and key
vendors  and  by  other  means.  No  assurance can be given, however, that these
measures  will  prevent  the  unauthorized disclosure or use of such technology.

SALES  AND  MARKETING

     We  derive  a  majority of our revenues from the sales of Cryocare Systems,
which  includes the sales of associated disposable Cryoprobes, and from the sale
of  disposable Cryoprobes to sites where we have placed cryosurgical systems. We
expect  that sales of these products will continue to constitute the majority of
our  net  sales  for  the  foreseeable future. Accordingly, any factor adversely
affecting  the  sales  of  Cryocare Systems and Cryoprobes would have a material
adverse  effect  on  our  business,  financial  condition  and  results  of  our
operations.  We  also  operate a regional mobile cryosurgery business in Florida
which  provides  cryosurgical  equipment for the treatment of prostate and liver
cancer  on  a procedural basis.  For the years ended December 31, 1998, 1999 and
2000,  the  mobile  cryosurgery  business  accounted  for  20%,  33%  and  11%,
respectively,  of  our  consolidated  revenues.  In  July 1999, HCFA implemented
national Medicare coverage for cryosurgical ablation of the prostate, one of the
approved  uses  of  our  eight probe Cryocare System.  No assurance can be given
that  health  care professionals will adopt the technology or that reimbursement
will be sufficient enough to induce the physicians to perform the procedure.  In
December  2000,  HCFA  approved  national  Medicare  coverage  for  cryosurgical
procedures  to  treat prostate cancer patients who have failed radiation therapy
and  the  coverage  is  scheduled to become  effective  July  2001.

     Until   March   1999,  when   we  exercised  an  option  to  terminate  our
distribution  agreement with  Boston Scientific Corporation, our Cryocare System
for urological applications  was  distributed  worldwide  by  Boston  Scientific
(other  than  in Canada).  For  the  years  ended  December  31, 1998  and 1999,
Boston Scientific accounted  for  41%  and 0%, respectively, of our consolidated
revenues.  We are continuously  evaluating additional international distribution
partners for our  Cryocare System  for urological applications as an alternative
to establishing an international sales force to sell our product. As of December
31,  2000,  we  have  international  distributorship  relationships  in  several
countries.

     We  currently sell our products domestically through our direct sales force
which,  as  of  December 31, 2000, consisted of a senior vice president of sales
and  marketing,  nine  regional  sales  managers  and  two  clinical application
specialists.  Internationally,  products  are sold primarily through independent
distributors.  Overall,  international  sales  were  insignificant  in  1998 and
represented  approximately  12%  and 16% of our consolidated revenue in 1999 and
2000, respectively. Our distributor agreements typically provide the distributor
with exclusive selling rights to our products in a particular territory, and are
terminable  by  either  party generally at will with advance notice.  Each party
bears  its  own expenses in performing its obligations under the agreement.  Our
ability  to distribute our products internationally depends substantially on the
capabilities  and  efforts  of  our international distributors.  There can be no
assurance  that we will be able to maintain or expand our relationships with our
distributors  or  to replace a distributor in the event any such relationship is
terminated.  In  the  event  that our relationships with any of our distributors
were  terminated  and we were unable to replace the distribution capability, our
ability to distribute our products could be materially adversely affected, which
could  have  a  material adverse effect on our business, financial condition and
results  of  operations.  In  addition,  in  such  event,  our current sales and
marketing personnel and financial resources might not be sufficient to enable us
to  establish  our  own distribution capability to market and sell our products.

     We sell our products primarily to  physicians  and  hospitals and have both
domestic and international customers.  No customers account for more than 10% of
our  total revenues.  For further information regarding our customers, see Note
12 to  our  consolidated  financial  statements.

BACKLOG

     As of December 31, 2000 and 1999, we maintained minimal backlog. Our policy
is to stock enough inventory to be able to ship most orders within a few days of
receipt of order. Historically, most of our orders have been for shipment within
30  days  of  the  placement  of  the order. Therefore, we rely on orders placed
during  a  given period for sales during that period.  Backlog information as of
the end of a particular period is not necessarily indicative of future levels of
our  revenue.

MANUFACTURING

     We  manufacture  our  products  internally  at  our  facility  in  Irvine,
California.  Most  of  our purchased components and processes are available from
more  than  one  vendor. However, certain components and processes are currently
available  from  or  performed  by  a  single vendor. The ability of third party
manufacturing  sources  to  deliver components or finished goods will affect our
ability to commercialize our products, and our dependence on third party sources
may  adversely  affect  our  profit  margins.  Further, although we continuously
evaluate  alternative  vendors,  the  qualification of additional or replacement
vendors  for  certain  components  or  services is a lengthy process. Any supply
interruption from a single source vendor would have a material adverse effect on
our  ability  to  manufacture  our  products  until  a  new source of supply was
qualified  and,  as  a  result,  could  have  a  material  adverse effect on our
business,  financial  condition  and  results  of  operations.

     Additionally, our success, if any,  will depend in part upon our ability to
manufacture our products in compliance with the FDA's current Good Manufacturing
Practices  regulations  and  other  regulatory  requirements,  in  sufficient
quantities  and  on  a  timely  basis,  while  maintaining  product  quality and
acceptable  manufacturing  costs.  Failure  to  increase production volumes in a
timely  or  cost  effective  manner  or to maintain compliance with current Good
Manufacturing  Practices  or other regulatory requirements could have a material
adverse  effect  on our business, financial condition and results of operations.

     Manufacturers often  encounter  difficulties  in  scaling  up production of
new  products,  including problems involving production yields, quality control
and  assurance,  component  supply  and  shortages  of qualified personnel. Our
failure to overcome these  manufacturing  problems could have a material adverse
effect on  our  business,  financial  condition  and  results  of  operations.

     Our  manufacturing  facility was subject to an FDA audit in September 1999,
and we did not receive  notice  that  we failed to comply with the FDA's current
Good Manufacturing Practice  regulations.  In  addition,  we  have obtained from
the California Department of Health  Services  a license  to manufacture medical
devices,  subject  to  periodic inspections and other regulation by that agency.


GOVERNMENT  REGULATION

     Governmental  regulation  in  the  United  States  and other countries is a
significant  factor  affecting  the  research  and  development, manufacture and
marketing  of  our  products.  In the United States, the FDA has broad authority
under  the Federal Food, Drug and Cosmetic Act and the Public Health Service Act
to  regulate  the distribution, manufacture and sale of medical devices. Foreign
sales  of  medical  devices  are  subject to foreign governmental regulation and
restrictions  which  vary  from  country  to  country.

     Medical  devices intended for human use in the United States are classified
into one of three categories, depending upon the degree of regulatory control to
which  they  will  be  subject.  Such  devices are classified by regulation into
either class I (general controls), class II (performance standards) or class III
(pre-market approval) depending upon the level of regulatory control required to
provide reasonable assurance of the safety and effectiveness of the device. Good
Manufacturing  Practices,  labeling, maintenance of records and filings with the
FDA  also  apply  to  medical  devices.

     A  subset of medical devices categorized as class I or II devices that were
commercially  distributed  before March 28, 1976 or are substantially equivalent
to a device that was in commercial distribution before that date may be marketed
after  the  acceptance  of the pre-market notification under a 510(k) exemption.
Section  510(k)  of  the Federal Food, Drug and Cosmetic Act allows an exemption
from the requirement of pre-market notification. Generally, devices that have an
existing  history  or  track  record  are  included  in  this  category.

     The  process  of  obtaining FDA and other required regulatory clearances or
approvals  is  lengthy  and expensive. There can be no assurance that we will be
able  to  obtain  necessary  clearances or approvals for clinical testing or for
manufacturing  or  marketing  of our products. Failure to comply with applicable
regulatory  approvals can, among other things, result in warning letters, fines,
suspensions of regulatory approvals, product recalls, operating restrictions and
criminal  prosecution.  In  addition, governmental regulation may be established
which  could  prevent, delay, modify or rescind regulatory clearance or approval
of  our  products.

     Regulatory  clearances  or  approvals,  if granted, may include significant
limitations  on  the  indicated  uses for which our products may be marketed. In
addition, to obtain such clearances or approvals, the FDA and foreign regulatory
authorities  may  impose  numerous  other  requirements  on  our  business.  FDA
enforcement  policy strictly prohibits the marketing of approved medical devices
for unapproved uses. In addition, product approvals can be withdrawn for failure
to  comply  with  regulatory  standards or the occurrence of unforeseen problems
following  initial  marketing. There can be no assurance that we will be able to
obtain  regulatory clearances or approvals for our products on a timely basis or
at  all, and delays in receipt of or failure to receive such approvals, the loss
of  previously  obtained approvals, or failure to comply with existing or future
regulatory  requirements  would  have a material adverse effect on our business,
financial  condition  and  results  of  operations.

     Our  Cryocare  System  has  received  FDA  clearance for sale in the United
States  for  approved  urological  and  general surgery, gynecology and oncology
uses.  In  addition,  we  have  obtained  CE Mark for distribution in Europe and
product  registration  for  distribution  in  Canada, Australia and New Zealand.


COMPETITION

     Currently,  we  market  cryosurgical systems and other urological products.
Significant  competitors  in  the  area  of  prostate  cancer  therapies include
Cryomedical  Sciences,  Inc.,  Galil  Medical, Ltd., Theragenics Corporation and
North  American  Scientific,  Inc.  Significant  competitors  in the area of BPH
therapies include Urologix, Inc., VidaMed, Inc., EDAP/TMS, S.A., C.R. Bard, Inc.
and  ACMI/Circon  Corporation.  The  principal  competitive  factors  in  the
cryosurgical  urology  markets  include  efficiency,  price,  availability  of
government  or  private  insurance reimbursement and service.  Endocare believes
that  it  competes  favorably  in  each  of  these  areas.

     Many  of  our  competitors  are  significantly  larger than we are and have
greater financial, technical, research, marketing, sales, distribution and other
resources  than  we  do.  Additionally,  we  believe there will be intense price
competition for products developed in our market. There can be no assurance that
our  competitors  will  not  succeed in developing or marketing technologies and
products that are more effective or commercially attractive than any that we are
developing or marketing , or that such competitors will not succeed in obtaining
regulatory  approval, introducing or commercializing any such products before we
do.  Such  developments  could  have  a material adverse effect on our business,
financial  condition  and  results  of  operations.  Further,  there  can  be no
assurance that, even if we are able to compete successfully, that we would do so
in  a  profitable  manner.

EMPLOYEES

     As  of  December  31,  2000,  we  had  a  total  of 79 employees. Of the 79
employees,  13 are engaged directly in research and development activities, 6 in
regulatory  affairs/quality  assurance,  19  in  manufacturing,  28 in sales and
marketing, and 13 in general and administrative positions. We expect to increase
employment  in  conjunction with the continued commercialization of the Cryocare
System and expanded research, development and clinical activities related to the
Horizon  Prostatic Stent. We have never experienced a work stoppage, none of our
employees are represented by a labor organization, and we consider  our employee
relations  to  be  good.

     Although  we  conduct  most  of  our research and development using our own
employees,  we  occasionally  have  funded and plan to continue to fund research
using consultants. Consultants provide services under written agreements and are
paid  based  on  the amount of time spent on our matters. Under their consulting
agreements, such consultants are required to disclose and assign to our business
any  ideas,  discoveries  and  inventions  developed  by  them  in the course of
providing  consulting  services.

FACTORS  THAT  MAY  AFFECT  FUTURE  RESULTS  AND  TRADING  PRICE OF COMMON STOCK

WE HAVE A LIMITED OPERATING HISTORY AND WE EXPECT TO CONTINUE TO GENERATE LOSSES

     Since  our inception, we have engaged primarily in research and development
and have minimal experience in manufacturing, marketing and selling our products
in  commercial  quantities.

     We  have  incurred annual operating losses since inception.  For the fiscal
years  ended  December  31,  1998,  1999,  and  2000,  we  had  net  losses  of
approximately $4.9 million, $9.3 million and $12.4 million, respectively.  As of
December  31, 2000, our accumulated deficit was approximately $32.2 million.  We
may  not  be able to successfully develop or commercialize our current or future
products,  achieve  significant  revenues from sales or procedures or achieve or
sustain  profitability.  We expect to continue to incur operating losses because
our  products  will  require  substantial  expenditures relating to, among other
matters, development, clinical testing, regulatory compliance, manufacturing and
marketing.  If  we  do achieve profitability, we cannot be certain that we would
be  able  to  sustain  or  increase profitability on a quarterly or annual basis
thereafter.

OUR  PRODUCTS  MAY  NOT  ACHIEVE MARKET ACCEPTANCE, WHICH COULD LIMIT OUR FUTURE
REVENUE

     Certain  of  our  products, including our Cryocare System, are in the early
stages  of  market  introduction.  Our products may not be accepted by potential
customers.  We  believe  that recommendations and endorsements of physicians and
patients  and  sufficient  reimbursement by health care payers will be essential
for  market  acceptance  of  our  Cryocare  System and other products, and these
recommendations  and  endorsements  may  not  be  obtained  and  sufficient
reimbursement  may  not be forthcoming.  Cryosurgery has existed for many years,
but  has  not been widely accepted due to concerns regarding safety and efficacy
and widespread use of alternative therapies.  Our ability to successfully market
our  Cryocare  System is dependent upon acceptance of cryosurgical procedures in
the  United  States  and  certain  international  markets.  Any  future reported
adverse  events  or  other unfavorable publicity involving patient outcomes from
the  use  of  cryosurgery,  whether  from  our  products  or the products of our
competitors,  could  adversely  affect  acceptance of cryosurgery.  Emerging new
technologies  and  procedures  to  treat  cancer, prostate enlargement and other
prostate  disorders  also  may  negatively  affect  the  market  acceptance  of
cryosurgery.  Our  Cryocare  System  and  our  other  products  may not gain any
significant  degree  of  market acceptance among physicians, patients and health
care  payers.  If  our  products  do  not  achieve market acceptance, our future
revenue  will  be  limited.

WE  MAY  NOT  BE  SUCCESSFUL  IN  DEVELOPING  OR  MARKETING  OUR  PRODUCTS

     Our  growth  depends  in  large  part  on continued ability to successfully
develop  and  commercialize  our  current  products under development or any new
products.  Several  of  our  products are in varying stages of development.  Our
stent  is  in  clinical  trials  and  has not been approved for marketing in the
United  States.  We also are developing enhancements to our Cryocare System.  We
may  experience  difficulties  that  could  delay  or  prevent  the  successful
development  and  commercialization of our current products under development or
any  new products.  Our products in development may not prove safe and effective
in clinical trials.  Clinical trials may identify significant technical or other
obstacles  that  must  be  overcome  prior  to obtaining necessary regulatory or
reimbursement  approvals.  Our failure to successfully develop and commercialize
new  products  or  to  achieve  significant  market  acceptance  would  have  a
significant  negative  effect  on  our  financial  condition.


THERE  IS  UNCERTAINTY RELATING TO THIRD PARTY REIMBURSMENT WHICH IS CRITICAL TO
MARKET  ACCEPTANCE  OF  OUR  PRODUCTS

     In  the  United  States,  health  care  providers,  such  as  hospitals and
physicians,  that  purchase  our  products generally rely on third party payers,
principally federal Medicare, state Medicaid and private health insurance plans,
to  reimburse  all  or  part  of  the  cost  of medical procedures involving our
products.  While  certain  private  health  insurance  companies  pay  for  the
procedures in which our products are used in certain areas of the United States,
private  insurance  reimbursement may not be adopted nationally or by additional
insurers  and  may  be terminated by those private insurance companies currently
paying for procedures in which our products are used.  Reimbursement levels from
Medicare  or  private  insurers  may  not  be sufficient to induce physicians to
perform,  and patients to elect, procedures utilizing our products.  Further, we
anticipate  that,  under  the  prospective payment system used by private health
care payers, the cost of our products will be incorporated into the overall cost
of  the  procedures  in  which they are used and that there will be no separate,
additional  reimbursement for our products.  This also may discourage the use of
our  products.  Furthermore,  we  could  be  negatively  affected  by changes in
reimbursement policies of government or private health care payers, particularly
to  the extent any such changes affect reimbursement for procedures in which our
products  are  used.  Failure  by  physicians,  hospitals and other users of our
products  to  obtain  sufficient  reimbursement  from  health  care  payers  for
procedures  involving  our  products could have a significant negative effect on
our  financial  condition.

     Furthermore,  significant  attention  is placed on reforming the healthcare
system  in  the  United  States and other countries.  Any changes in Medicare or
third party medical expense reimbursement which may arise from healthcare reform
would  likely  have a material adverse effect on the price for our products.  In
addition,  changes  to  the  healthcare  system  may  also affect the commercial
acceptance  of  products we are currently developing and products we may develop
in  the  future.  Several proposals have been made in the United States Congress
and  various  state  legislatures  recently  that,  if adopted, would reform the
healthcare  system  in  the  United  States  and  potentially  reduce healthcare
spending  which  may  result  in  a  material  adverse  effect  on our business.


WE  HAVE  LIMITED  SALES  AND  MARKETING  EXPERIENCE

     We  have  limited  sales  and  marketing experience and if we are unable to
expand  our  sales and marketing capabilities, we may not be able to effectively
commercialize  our  products.  We  have limited experience marketing and selling
our  products,  and do not have experience marketing and selling our products in
commercial  quantities.

     We  derive  the majority of our revenues from the sales of Cryocare Systems
and  expect  that  sales  of  Cryocare  Systems  will continue to constitute the
majority  of  sales for the foreseeable future.  Any factor negatively impacting
the  sales  or  usage of Cryocare Systems would have a significant effect on our
business.  In  March  1999,  we  exercised  our right to terminate our exclusive
worldwide  distribution agreement with Boston Scientific Corporation pursuant to
which Boston Scientific had agreed to market and distribute the Cryocare System,
our principal product.  As a result, future sales of the Cryocare System will be
dependent  on  our marketing efforts.  We may not be able to successfully expand
our  sales  and marketing capabilities in order to effectively commercialize the
Cryocare  System  product.

     We  believe that, to become and remain competitive, we will need to develop
additional  third  party  international distribution channels and a direct sales
force  for  our  products.  If we enter into third party marketing arrangements,
our  percentage  share  of  product  revenues  is  likely to be lower than if we
directly  marketed  and  sold  our  products  through  our  own  sales  force.
Establishing  marketing  and  sales  capabilities sufficient to support sales in
commercial quantities will require significant resources.  We may not be able to
recruit  and  retain  direct  sales  personnel,  succeed  in  establishing  and
maintaining any third party distribution channels or succeed in our future sales
and  marketing  efforts.

WE  ARE  DEPENDENT UPON A LIMITED NUMBER OF THIRD PARTY SUPPLIERS TO MANUFACTURE
OUR  PRODUCTS

     We  depend  upon a limited number of unaffiliated third party suppliers for
components  and  materials used in the manufacture of our products and, as such,
our business would be seriously harmed if we were unable to develop and maintain
relationships  with  suppliers that allow us to obtain sufficient quantities and
quality  materials  and  components  on  acceptable  terms.  If  our  principal
suppliers  cease  to  supply the materials and components we need to manufacture
our  products,  there  may not be adequate alternatives to meet our needs, which
will have a material adverse effect on our business.  To date, we have been able
to  obtain the necessary components and materials used in the manufacture of our
products  without  material  delays,  however, there can be no assurance that we
will  be  able  to  obtain  the  necessary  components and materials used in our
products  in  the  future  on  a  timely  basis,  if  at  all.


WE  ARE  DEPENDENT  ON  ADEQUATE PROTECTION OF OUR PATENT AND PROPRIETARY RIGHTS

     We  may not be able to obtain effective patents to protect our technologies
from  use  by  other  companies  with competitive products, and patents of other
companies  could  prevent  us  from  developing  or marketing our products.  Our
success  will  depend,  to  a  significant  degree, on our ability to secure and
protect  intellectual  proprietary  rights  and  enforce  patent  and  trademark
protections relating to our technology.  While we believe that the protection of
patents or licenses is important to our business, we also rely on trade secrets,
know-how  and  continuing  technological  innovation to maintain our competitive
position. We cannot ensure that (1) we were the first to invent the technologies
covered  by our patents or pending patent applications, (2) we were the first to
file  patent  applications  for  these inventions, (3) any of our pending patent
applications  will  result  in issued patents, (4) others will not independently
develop  similar  or  alternative  technologies  or  duplicate  any  of  our
technologies,  (5)  our  patents  will  provide  a basis for commercially viable
products  or  will  provide  us  with  any  competitive  advantages, and (6) our
processes  or products do not or will not infringe patents or proprietary rights
of others.  We are currently involved in a patent infringement lawsuit initiated
by  us in the U.S. District Court for the Central District of California against
a competitor.  The complaint seeks damages and injunctive relief to prevent this
competitor  from marketing cryosurgical systems and components incorporating our
patented  combination  of  cryocooling,  ultrasound  and  temperature monitoring
technology.  Counterclaims  have  been made against us by the competitor in this
litigation  alleging  that our cryosurgical system infringes on the competitor's
proprietary  rights.  This  litigation  and  any  other  litigation necessary to
protect our patent position could be costly, and it is possible that we will not
have  sufficient  resources  to  fully  pursue this litigation or to protect our
other  patent  rights  and  could result in the rejection or invalidation of our
existing and future patents, if any.  If we are unsuccessful in this lawsuit our
competitors  may  be  able  to  use  certain  or  of  our  cryosurgical  systems
technology.  This  outcome, or any adverse outcome in litigation relating to the
validity  of our patents, or any other failure to pursue litigation or otherwise
to protect our patent position, could materially harm our business and financial
condition.  In  addition,  from  time  to  time, we have received correspondence
alleging  infringement  of  proprietary rights of third parties.  We may have to
pay  substantial  damages,  possibly  including  treble  damages,  for  past
infringement  if  it is ultimately determined that our products infringe a third
party's patents.  Further, we may be prohibited from selling our products before
we  obtain  a  license,  which,  if  available  at  all,  may  require us to pay
substantial  royalties.  Even  if  infringement  claims  against  us are without
merit,  defending  a  lawsuit  takes  significant time, may be expensive and may
divert  management  attention  from other business concerns.  We try to preserve
the  confidentiality  of  our  technology  be  entering  into  confidentiality
agreements  with  our  employees, consultants, customers, and key vendors and by
other  means.  These  measures  may  not,  however,  prevent  the  unauthorized
disclosure or use of such technology.  It is possible that these agreements will
be  breached or that they will not be enforceable in every instance, and that we
will  not  have adequate remedies for any such breach.  In addition, enforcement
of  these  agreements  may  be  costly  and  time  consuming.

WE  ARE  FACED  WITH  INTENSE  COMPETITION  AND RAPID TECHNOLOGICAL AND INDUSTRY
CHANGE

     We  are faced with intense competition and rapid technological and industry
change  and,  if  our  competitors'  existing  products or new products are more
effective than our products, the commercial opportunity for our products will be
reduced  or  eliminated.  The  commercial  opportunity  for our products will be
reduced  or  eliminated  if our competitors develop and market products that are
superior  to  our  products.  We  face  intense  competition from other surgical
device  manufacturers, as well as, in some cases, from pharmaceutical companies.
Many  of  our  competitors  are  significantly  larger  than us and have greater
financial,  technical,  research,  marketing,  sales,  distribution  and  other
resources  than  us.  We  believe  there  will  be intense price competition for
products  developed  in  our  markets.  Our  competitors  may  develop or market
technologies  and  products,  including  drug-based  treatments,  that  are more
effective  or  commercially  attractive  than  any  that  we  are  developing or
marketing.  Our  competitors  may  succeed in obtaining regulatory approval, and
introducing  or  commercializing products before we do.  Such developments could
have  a  significant negative effect on our financial condition.  Even if we are
able  to  compete  successfully,  we  may  not  be able to do so in a profitable
manner.  The  medical  device  industry  generally,  and  the urological disease
treatment market in particular, are characterized by rapid technological change,
changing  customer  needs, and frequent new product introductions.  Our products
may  be  rendered  obsolete  as  a  result  of  future  innovations.

WE  MAY  NEED  ADDITIONAL  LONG  TERM  FINANCING

     If we undertake or accelerate significant research and development projects
for  new  products  or  pursue corporate acquisitions, we may require additional
outside  financing.  Such additional funds may be raised through the sale of our
equity  securities or the incurrence of additional debt or through collaborative
arrangements.   Any additional equity financing may be dilutive to shareholders,
and  debt  financing,  if  available,  may  involve  restrictive  covenants.
Collaborative  arrangements, if necessary to raise additional funds, may require
us  to  relinquish  rights to certain of our technologies, products or marketing
territories.  Our  failure to raise capital when needed could have a significant
negative  effect  on  our  business,  operating results, financial condition and
prospects.

WE  HAVE  LIMITED  MANUFACTURING  EXPERIENCE

     We  have  limited  experience  in  producing  our  products  in  commercial
quantities.  Manufacturers often encounter difficulties in scaling up production
of new products, including problems involving production yields, quality control
and  assurance,  component  supply  and  shortages  of qualified personnel.  Our
failure  to  overcome  these  manufacturing problems could negatively impact our
business and financial condition.  We use internal manufacturing capacity in our
manufacturing  efforts.  Certain  of  our purchased components and processes are
currently  available  from  or  performed  by  a  single  vendor.  Any  supply
interruption  from  a  single  source  vendor  would have a significant negative
effect  on  our ability to manufacture our products until a new source of supply
is  qualified  and, as a result, could have a significant negative effect on our
business  and  financial  condition.  Our  success  will depend in part upon our
ability  to  manufacture  our  products  in  compliance  with  the  FDA's  Good
Manufacturing  Practices  regulations  and  other  regulatory  requirements  in
sufficient  quantities  and on a timely basis, while maintaining product quality
and acceptable manufacturing costs.  Failure to increase production volumes in a
timely  or  cost-effective  manner or to maintain compliance with the FDA's Good
Manufacturing  Practices  or  other  regulatory  requirements  could  have  a
significant  negative  effect  on  our  financial  condition.

WE  ARE  DEPENDENT  ON  KEY  PERSONNEL

     Failure  to  attract and retain skilled personnel could hinder our research
and development and sales and marketing efforts. Our future success depends to a
significant  degree  upon  the  continued  services  of key technical and senior
management  personnel,  including  Paul  W.  Mikus, our Chief Executive Officer.
None  of  these individuals is bound by an employment agreement or covered by an
insurance  policy  of  which  we  are  the beneficiary.  Our future success also
depends  on  our  continuing  ability  to  attract,  retain  and motivate highly
qualified managerial, technical and sales personnel.  The inability to retain or
attract  qualified  personnel  could have a significant negative effect upon our
research  and development and sales and marketing efforts and thereby materially
harm  our  business  and  financial  condition.

GOVERNMENT  REGULATION  CAN  HAVE  A  SIGNIFICANT  IMPACT  ON  OUR  BUSINESS

     Government  regulation  in  the  United  States  and  other  countries is a
significant  factor  affecting  the  research  and  development, manufacture and
marketing  of  our  products.  In the United States, the FDA has broad authority
under  the federal Food, Drug and Cosmetic Act and the Public Health Service Act
to  regulate the distribution, manufacture and sale of medical devices.  Foreign
sales  of  drugs  and  medical  devices  are  subject  to  foreign  governmental
regulation  and restrictions which vary from country to country.  The process of
obtaining  FDA and other required regulatory approvals is lengthy and expensive.
We may not be able to obtain necessary approvals for clinical testing or for the
manufacturing  or  marketing of our products.  Failure to comply with applicable
regulatory  approvals  can,  among  other things, result in fines, suspension of
regulatory  approvals,  product  recalls,  operating  restrictions, and criminal
prosecution.  In  addition,  governmental  regulations  may be established which
could prevent, delay modify or rescind regulatory approval of our products.  Any
such position by the FDA, or change of position by the FDA, may adversely impact
our  business  and  financial  condition.  Regulatory approvals, if granted, may
include significant limitations on the indicated uses for which our products may
be  marketed.  In  addition,  to  obtain  such  approvals,  the  FDA and foreign
regulatory  authorities  may  impose  numerous  other  requirements  on us.  FDA
enforcement  policy strictly prohibits the marketing of approved medical devices
for  unapproved  uses.  In  addition,  product  approvals  can  be withdrawn for
failure  to  comply  with  regulatory  standards or the occurrence of unforeseen
problems  following  initial marketing.  We may not be able to obtain regulatory
approvals  for  our products on a timely basis, or at all, and delays in receipt
of  or  failure  to  receive  such  approvals,  the  loss of previously obtained
approvals,  or failure to comply with existing or future regulatory requirements
would  have  a  significant  negative  effect  on  our  financial condition.  In
addition,  the health care industry in the United States is generally subject to
fundamental  change  due  to  regulatory,  as well as political, influences.  We
anticipate  that  Congress  and  state  legislatures will continue to review and
assess  alternative  health  care  delivery  and  payment  systems.  Potential
approaches  that  have  been considered include controls on health care spending
through  limitations  on  the  growth  of  private  purchasing  groups and price
controls.  We  cannot  predict  what impact the adoption of any federal or state
health  care  reform  measures  may  have  on  our  business.

     We, our distributors and healthcare providers who purchase our products and
services  are  subject  to state and federal laws prohibiting kickbacks or other
forms  of  bribery  in  the healthcare industry.  We may be subject to civil and
criminal  prosecution  and  penalties  if  we or our agents violate any of these
laws.

WE  MAY  BE  NEGATIVELY  IMPACTED  BY  PRODUCT  LIABILITY  AND  PRODUCT  RECALL

     The  manufacture  and  sale of medical products entails significant risk of
product  liability  claims  or product recalls.  Our existing insurance coverage
limits  may not be adequate to protect us from any liabilities we might incur in
connection  with  the  clinical trials or sales of our products.  We may require
increased  product  liability  coverage  as  our  products  are  commercialized.
Insurance  is expensive and may not be available on acceptable terms, or at all.
A  successful  product liability claim or series of claims brought against us in
excess  of  our  insurance  coverage,  or a recall of our products, could have a
significant  negative  effect  on  our  business  and financial condition.  Even
unsuccessful claims could result in the expenditure of funds and management time
and  could  have  a  negative  impact  on  our  business.

WE  MAY  EXPERIENCE  FLUCTUATIONS  IN  OUR  FUTURE  OPERATING  RESULTS

     If  our  revenue  declines  in  a  quarter from the revenue in the previous
quarter  our  earnings  will  likely  decline  because  many of our expenses are
relatively  fixed.  In particular, research and development, sales and marketing
and  general and administrative expenses are not affected directly by variations
in revenue.  In some future quarter or quarters, due to a decrease in revenue or
for  some  other  reason,  our  operating  results  likely  will  be  below  the
expectations  of  securities  analysts  or investors.  In this event, the market
price  of  our  common  stock  may  fall  abruptly  and  significantly.

OUR  BUSINESS  IS  EXPOSED  TO  RISKS  RELATED  TO  ACQUISITIONS  AND  MERGERS

     As  part  of our strategy to commercialize our products, we may acquire one
or  more  businesses,  such  as a related company that would use our products in
clinical applications.  In June 1999, we consummated a business combination with
Advanced  Medical Procedures, LLC, a regional mobile cryosurgery service company
that provides our cryosurgical equipment for the treatment of prostate and liver
cancer  on  a procedural basis.  We may not be able to effectively integrate our
business  with  any  other  business we may acquire or merge with or effectively
utilize  the  business acquired to develop and market our products.  The failure
to  integrate  an  acquired  company  or acquired assets into our operations may
cause  a  drain  on  our  financial and managerial resources, and thereby have a
significant  negative  effect  on  our  business  and  financial  results.

     These  difficulties  could  disrupt  our  ongoing  business,  distract  our
management  and  employees  or increase our expenses.  Furthermore, any physical
expansion  in  facilities  due  to an acquisition may result in disruptions that
seriously impair our business.  We are not experienced in managing facilities or
operations  in geographically distant areas.  In addition, our profitability may
suffer  because  of acquisition-related costs or amortization costs for acquired
goodwill  and  other  intangible assets.  Finally, in connection with any future
acquisitions, we may incur debt or issue equity securities as part or all of the
consideration  for  the  acquired  company's assets or capital stock.  We may be
unable  to  obtain sufficient additional financing on favorable terms or at all.
Equity  issuances  would  be  dilutive  to  our  existing  stockholders.

OUR  COMMON  STOCK  HAS  A  LIMITED  MARKET  AND  TRADING  HISTORY

     If  we  fail  to  satisfy  the continued listing requirements of the Nasdaq
National Market or Nasdaq SmallCap Market, our stock could become subject to the
SEC's  Penny  Stock Rules, making the stock difficult to sell.  Our common stock
began trading on the Nasdaq SmallCap Market on February 28, 1997 and in May 2000
was  listed  and  is  currently traded on the Nasdaq National Market.  If we are
unable  to maintain the standards for quotation on the Nasdaq National Market or
the  Nasdaq SmallCap Market, the ability of our investors to resell their shares
may  be  limited.  In addition, our securities may be subjected to "penny stock"
rules  that  impose  additional sales practice and market making requirements on
broker-dealers  who sell or make a market in such securities.  This could affect
the  ability  or  willingness  of broker-dealers to sell or make a market in our
securities and the ability of holders of our securities to sell their securities
in  the  secondary  market.

OUR  STOCK  PRICE  MAY  FLUCTUATE  SIGNIFICANTLY

     Our  stock price may fluctuate significantly, making it difficult to resell
shares  when  an  investor  wants to at prices they find attractive.  The market
prices  for  securities  of  emerging  companies  have  historically been highly
volatile.  Future  announcements  concerning  us  or our competitors could cause
such  volatility including:  our operating results, technological innovations or
new  commercial  products,  corporate  collaborations,  government  regulation,
developments  concerning  proprietary rights, litigation or public concern as to
the  safety  of  our  products,  investor perception of us and our industry, and
general  economic  and  market  conditions.  In  addition,  the  stock market is
subject  to  price  and  volume  fluctuations  that affect the market prices for
companies  in  general,  and  small-capitalization, high technology companies in
particular,  which  are  often  unrelated  to the operating performance of these
companies.

THE  FUTURE  SALES OF SHARES OF OUR COMMON STOCK MAY NEGATIVELY AFFECT OUR STOCK
PRICE

     Future sales of our common stock (including shares issued upon the exercise
of  outstanding  options  and  warrants  and  the  conversion  of  convertible
debentures)  could have a significant negative effect on the market price of our
common  stock.  Such  sales  also  might  make  it more difficult for us to sell
equity securities or equity-related securities in the future at a time and price
that  we  would  deem  appropriate.

ANTI-TAKEOVER  PROVISIONS  IN OUR CHARTER MAY HAVE A POSSIBLE NEGATIVE EFFECT ON
OUR  STOCK  PRICE

     Certain  provisions of our Certificate of Incorporation and Bylaws may have
the  effect  of  making  it  more  difficult for a third party to acquire, or of
discouraging  a third party from attempting to acquire, control of us.  In March
1999,  our  board  of  directors  adopted  a  stockholder  rights  plan in which
preferred  stock  purchase  rights  were  distributed  as  a  dividend.  These
provisions  may  make  it  more  difficult  for  stockholders  to  take  certain
corporation  actions  and may have the effect of delaying or preventing a change
in  control.  In  addition,  we  are  subject to the anti-takeover provisions of
Section 203 of the Delaware General Corporation Law.  This section provides that
a  corporation  shall not engage in any business combination with any interested
stockholder  during  the  three-year  period  following  the  time  that  such
stockholder  becomes  an  interested stockholder.  This provision could have the
effect of delaying or preventing a change of control of Endocare.  The foregoing
factors  could limit the price that certain investors might be willing to pay in
the  future  for  shares  of  our  common  stock.

CALIFORNIA  ENERGY  CRISIS

     Our  headquarters  and  principal  operations are located in Orange County,
California.  California has recently found itself in a utility crisis caused, in
part,  by  a  lack  of affordable power sources and the financial instability of
several  of  its  primary  power suppliers.  Orange County has undergone several
periods  of  "rolling  blackouts,"  a  technique  used  by our power provider to
conserve  its  resources.  Although  our  operations  have  not been halted as a
result  of  these conservation measures, potential suspensions of our operations
due  to  power  disruptions  could  result  in  materially higher costs and lost
revenues,  either  of  which  would  materially  adversely  impact our business,
financial  condition  and  results  of  operations.

ITEM  2.  PROPERTIES

     We  currently  occupy  approximately  16,000  square  feet  of  office,
manufacturing,  engineering,  warehouse,  and  research and development space in
Irvine,  California.  The  property is leased through March 2002. We also occupy
approximately  1,320  square  feet of office space in Winter Park, Florida.  The
property is leased through March 2002.  We believe the leased properties satisfy
our  current  needs.

ITEM  3.  LEGAL  PROCEEDINGS

     In  March 2000, we filed patent infringement lawsuits against Israeli-based
Galil  Medical,  Ltd.,  and  its  U.S.  affiliate,  Galil  Medical  USA,  Inc.
(collectively,  "Galil").  The  suit  against  Galil  filed in the U.S. District
Court  for  the  Central District of California, alleges that Galil has marketed
and  sold  cryosurgical  systems  that  infringe  our  patented  combination  of
cryocooling,  ultrasound  and temperature monitoring technology.  Our suit seeks
damages  and injunctive relief with respect to products and procedures which are
found  to  infringe our proprietary technology.  In August 2000, Galil submitted
counterclaims  alleging  that  our  cryosurgical  probes  infringe Galil's probe
patents.  Galil  seeks unspecified damages and injunctive relief with respect to
our  cryosurgical  system.  We believe we have adequate defenses to these claims
and intend to defend the litigation vigorously if necessary.  All proceedings in
the  action  were  stayed by the District Court on December 13, 2000 pending the
outcome of the settlement discussions by the parties.  The parties are currently
engaged in settlement discussions.  We do not expect any material adverse effect
on  our consolidated financial condition or the results of operations because of
such  actions.

     In  March  2000, we filed a similar suit to the one discussed above against
Cryomedical Sciences, Inc. In December 2000, the parties reached a settlement in
this  action.  In  the settlement agreement, CMSI stipulated for purposes of the
agreement  that  our  patent  combining cryo-cooling, ultrasound and temperature
monitoring  technology  is valid and enforceable.  On December 20, 2000, as part
of  the  settlement, the District Court signed a Consent Judgment validating the
settlement agreement in which CMSI stipulated for purposes of the agreement that
our  patent  combining  cryo-cooling,  ultrasound  and  temperature  monitoring
technology  is  valid  and  enforceable.  The  settlement  resulted  in  certain
cross-licensing  agreements.

     In  the  normal  course  of business, we are subject to various other legal
matters.   While  the  results of litigation and claims cannot be predicted with
certainty,  we  believe  that the final outcome of these matters will not have a
material  adverse  effect on our consolidated results of operations or financial
condition.

     From  time  to  time,  we  have  received  other  correspondence  alleging
infringement  of proprietary rights of third parties.  No assurance can be given
that  any  relevant  claims  of  third  parties would not be upheld as valid and
enforceable,  and  therefore  that  we  could  be  prevented from practicing the
subject  matter  claimed or would be required to obtain licenses from the owners
of  any  such  proprietary  rights  to avoid infringement.  We do not expect any
material  adverse  effect on our consolidated financial condition or the results
of  operations  because  of  such  actions.

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

     No  matters  were  submitted  to  a vote of our security holders during the
fourth  quarter  of  2000.

                                     PART II

ITEM  5.  MARKET  FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

     Our  common  stock  began trading on the Nasdaq SmallCap Market on February
28,  1997  and  on May 23, 2000 was listed and is currently traded on the Nasdaq
National  Market  System under the symbol "ENDO".  Between February 20, 1996 and
February 27, 1997, our common stock was traded on the over-the-counter market on
the  Nasdaq  Electronic  Bulletin  Board  under the symbol "ENDO." The following
table sets forth the high and low closing prices for our common stock during the
periods  indicated  as  quoted  on the Nasdaq SmallCap Market or Nasdaq National
Market:

<TABLE>
<CAPTION>


                            FISCAL YEAR ENDED DECEMBER 31,
                           -------------------------------
                                1999            2000
                               -----           -----
                              HIGH    LOW    HIGH    LOW
                             -----  -----   ------  ------
<S>                          <C>    <C>     <C>     <C>
            Fourth quarter   $8.94  $5.31   $19.44  $12.44

            Third quarter.   $8.25  $5.00   $21.38  $16.00

            Second quarter   $6.00  $3.06   $20.25  $11.88

            First quarter.   $6.00  $2.03   $21.75  $ 9.00
</TABLE>


     As  of March 13, 2001,  the  closing  price of our common stock was $11.25.
Also,  as  of  that  date,  we had approximately 326 stockholders of record.  On
March  13,  2001  there  were  15,212,030  shares of our common stock issued and
outstanding.

     In March 1999, our Board of Directors adopted a Stockholder Rights Plan in
which preferred stock purchase rights were distributed as a dividend at the rate
of one preferred stock purchase right for each share of common stock held as of
the close of business on April 15, 1999. The preferred stock purchase rights are
designed  to guard against partial tender offers and other coercive tactics that
might  be  used  in  an  attempt  to  gain  control  of  Endocare  or to deprive
stockholders  of  their  interest  in  the long-term value of our business.  The
preferred  stock  purchase  rights will be exercisable only if a person or group
acquires  15%  or more of our common stock (subject to certain exceptions stated
in the Stockholder Rights Plan) or announces a tender offer, the consummation of
which  would  result  in  ownership by a person or a group of 15% or more of our
common  stock.  Each preferred stock purchase right will entitle stockholders to
buy  one  one-thousandth  of  a  share  of  a new series of junior participating
preferred stock at an exercise price of $25 upon certain events.  If a person or
group  acquires  15% or more of our outstanding common stock (subject to certain
exceptions stated in the Stockholder Rights Plan), or a holder of 15% or more of
our  common  stock  engages  in  certain  self-dealing  transactions or a merger
transaction  in  which  we  are  the  surviving corporation and our common stock
remains  outstanding, then each preferred stock purchase right not owned by such
person  or group or certain related parties will entitle its holder to purchase,
at  the  preferred  stock purchase right's then-current exercise price, units of
our  Series  A  Preferred Stock (or, in certain circumstances, our common stock,
cash,  property or other securities of Endocare) having  a market value equal to
twice  the  then-current  exercise  price.  In addition, if, after the preferred
stock  purchase  rights become exercisable, we are acquired in a merger or other
business  combination transaction, or sell 50% or more of our assets or earnings
power,  each  stock  purchase  right will entitle its holder to purchase, at the
preferred  stock  purchase right's then-current price, a number of the acquiring
company's common shares having a market value at the time of twice the preferred
stock  purchase right's exercise price.  At any time on or prior to the close of
business  on  the first date of a public announcement that a person or group has
acquired  beneficial  ownership  of  15% or more of our common stock (subject to
certain  exceptions  stated in the Stockholder Rights Plan), the preferred stock
purchase  rights  are  redeemable  for  one cent per stock purchase right at the
option  of  our  Board  of  Directors.  The  preferred stock purchase rights are
intended  to  enable  all  stockholders  to realize the long-term value of their
investment  in  our  business.  The  preferred  stock  purchase  rights will not
prevent  a  takeover attempt, but should encourage anyone seeking to acquire our
business  to  negotiate  with  our  Board  of Directors prior to attempting to a
takeover.  The  dividend  distribution  was  made  on  April  15,  1999  to  the
stockholders  of  record on that date.  The preferred stock purchase rights will
expire  on  April  15,  2009.

     We  have  not paid any cash dividends on our common stock and do not intend
to  pay  any  cash  dividends  in the foreseeable future.  We are precluded from
paying  cash dividends under our existing debt agreement without first obtaining
the  consent  of  our  creditor.

     On  November 22,  2000,  we entered into a common stock purchase agreement
with SAFECO  401(k)  Savings  Plan, SAFECO  Common  Stock Trust, SAFECO Resource
Series Trust, Narragansett I, L.P, Narragansett Offshore, Ltd., and SDS Merchant
Fund, L.P. Pursuant to a purchase agreement, on  November  24,  2000, we sold an
aggregate  of  1,509,440  shares  of  our common  stock  to  the  investors  at
a  price of $13.25 per shares and issued warrants to purchase up to an aggregate
of 188,680 shares of our common stock to the  investors  at an exercise price of
$13.9125 per share.  The issued warrants resulted  in  total  gross  proceeds of
$20,000,080 to our business (before deducting fees and expenses of approximately
$1.7 million).  The issued warrants  are  exercisable  for  a term of five years
from the date of issuance.  We agreed to register the resale by the investors of
the  shares  and  the  shares  of  common  stock  issuable  upon exercise of the
warrants.  The  shares  and  warrants  were sold pursuant  to an exemption from
registration under the Securities Act of 1933, as amended, by virtue of Rule 506
of  Regulation D under such act.  We also granted the  investors  the  right  to
purchase, subject to certain exceptions and restrictions,  a  pro  rata  portion
of  any  of  our  capital  stock  (including  securities  convertible  into  or
exercisable for capital stock) which we may, from time to time, propose to  sell
and issue.  Such right expires upon the first anniversary of the effective date
of the registration statement described above.  PaineWebber  Incorporated acted
as  the  placement  agent  and received a 6% fee for the  sale  of  our  common
stock  and  warrants.

ITEM  6.  SELECTED  FINANCIAL  DATA

     The  following  table  presents selected financial data of our business for
the  years  ended  December  31,  1996,  1997,  1998,  1999  and  2000.

<TABLE>
<CAPTION>

                                                               YEARS ENDED DECEMBER 31,
                                                               ------------------------
                                             1996          1997          1998          1999        2000
                                         -----------  -----------  ------------  ------------  -----------
                                                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                      <C>          <C>          <C>           <C>           <C>
Statement of Operations Data:
Revenues:
Net product sales . . . . . . . . . . .  $    1,878   $    1,918   $     1,363   $     2,329   $     5,968
Mobile cryosurgical procedures. . . . .         148          347           490         1,133           703
Revenue from collaborative agreements .         250           83           642            --            --
Research revenue from related party . .           1           --            --            --            --
                                         -----------  -----------  ------------  ------------  ------------
Total revenues. . . . . . . . . . . . .       2,277        2,348         2,495         3,462         6,671
                                         -----------  -----------  ------------  ------------  ------------
Costs and expenses:
Cost of product sales . . . . . . . . .         994        1,271           974         1,255         2,607
Cost of mobile cryosurgical procedures.          59          151           209           429           405
Research and development. . . . . . . .       1,023        1,596         1,920         2,574         3,204
Selling, general and administrative . .       1,410        3,553         4,653         7,992        12,230
Impairment loss on long-lived assets. .         325           --            --            --            --
                                         -----------  -----------  ------------  ------------  ------------
Total costs and expenses. . . . . . . .       3,811        6,571         7,756        12,250        18,446
                                         -----------  -----------  ------------  ------------  ------------
Loss from operations. . . . . . . . . .      (1,534)      (4,223)       (5,261)       (8,788)      (11,775)
Interest income (expense), net. . . . .         (29)         201           336          (476)    (     624)
                                         -----------  -----------  ------------  ------------  ------------
Net loss. . . . . . . . . . . . . . . .  $   (1,563)  $   (4,022)  $    (4,925)  $    (9,264)  $   (12,399)
                                         ===========  ===========  ============  ============  ============
Net loss per share. . . . . . . . . . .  $     (.27)  $     (.48)  $      (.49)  $      (.86)  $      (.97)
                                         ===========  ===========  ============  ============  ============
Weighted average shares outstanding . .   5,895,000    8,307,000    10,062,000    10,838,000    12,757,000
                                         ===========  ===========  ============  ============  ============
</TABLE>


<TABLE>
<CAPTION>

                                                      BALANCES AT DECEMBER 31,
                                                     ------------------------
                                               1996     1997    1998     1999     2000
                                              -------  ------  ------  --------  -------
                                                           (IN THOUSANDS)
<S>                                           <C>      <C>     <C>     <C>       <C>
     Balance Sheet Data:
     -------------------
     Working capital . . . . . . . . . . . .  $  595   $3,718  $5,544  $ 6,445   $19,452
     Total assets. . . . . . . . . . . . . .   1,952    5,691   7,992   12,996    28,845
     Long-term debt. . . . . . . . . . . . .     771       44     201   10,153     7,574

     Total shareholders' equity (deficiency)     (17)   3,960   6,011     (480)   14,869
</TABLE>


ITEM  7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

     The  following  Management's Discussion and Analysis of Financial Condition
and  Results  of  Operations may be deemed to contain forward-looking statements
within  the  meaning  of  Section 21E of the Securities Exchange Act of 1934, as
amended  and  are subject to the Safe Harbor provisions created by that statute.
Our  business  and  results of operations are subject to risks and uncertainties
including,  but  not limited to, those discussed under the caption "Factors That
May  Affect Future Results and Trading Price of Common Stock" included elsewhere
in  this  report,  and in risk factors contained in other periodic reports filed
with the Securities and Exchange Commission.  Such risk factors include, but are
not  limited  to,  limited  operating  history of our business with a history of
losses;  fluctuations  in  our  order  levels;  uncertainty  regarding  market
acceptance  of  our  new  products;  uncertainty  of product development and the
associated  risks  related  to  clinical trials; the rapid pace of technological
change  in  our  industry;  our  limited  sales,  marketing  and  manufacturing
experience,  and  the  ability  to  convince health care professionals and third
party  payers  of the medical and economic benefits of our Cryocare System.  The
actual  results  that  we achieve may differ materially from any forward-looking
statements  due  to  such  risks  and  uncertainties.

GENERAL

     We  are  a  vertically-integrated  medical  device  company  that develops,
manufactures and markets cryosurgical and stent technologies for applications in
oncology  and  urology.  We  have  concentrated  on  developing  devices for the
treatment  of  the two most common diseases of the prostate, prostate cancer and
benign  prostate  hyperplasia.  We are also developing cryosurgical technologies
for  treating  tumors  in  other organs, including the kidney, breast and liver.
Since  our  formation  in  1990, we operated first as a research and development
department,  then later as a division of Medstone International, Inc.  Effective
January 1, 1996, we became an independent, publicly-owned corporation upon being
spun-out  to  existing  Medstone  shareholders.

     We derive revenues primarily from the sale of our Cryocare Systems, related
disposable  Cryoprobes  and  revenue  from  mobile  cryosurgical  procedures.
Revenue's  are  recognized  upon the shipment of products, or in the case of our
mobile  cryosurgical  procedures,  upon the completion of procedures.  Under our
cryosurgical system placement program, a system is placed at a customer site for
use  with our disposable Cryoprobes.  The cost of the system is depreciated into
product  cost  of  sales  over  an  estimated  useful  life  of  three  years.

     We have incurred losses since our inception.  As  of  December 31, 2000, we
had  an  accumulated  deficit  of  $32.2 million.  These  losses and accumulated
deficit have resulted from  significant costs incurred in the development of the
cryosurgery and stent  technology  platforms,  clinical studies and establishing
our  infrastructure  to  launch  our  products.  We intend to continue to invest
heavily in  research,  development,  clinical  studies, sales and marketing, and
general  administrative  infrastructure.  As  a result,  we  do not expect to be
profitable in the  near  future.  Although  we  have  experienced revenue growth
in  recent  periods,  operating  results  for  future  periods  are  subject  to
numerous uncertainties.  In  view of the rapidly evolving nature of the business
and  our  limited  operating  history, period-to-period comparisons of operating
results  are  not  necessarily  meaningful  and  should not be relied upon as an
indication  of  future  performance.  There  can be no assurance that we will be
able to achieve or  sustain  profitability.

     On June 30, 1999, we acquired  all  the outstanding membership interests of
Advanced  Medical  Procedures,  LLC,  a  Florida limited liability company.  AMP
operates a mobile cryosurgery business which provides cryosurgical equipment for
the treatment of prostate and liver cancer on a per procedure basis.  The merger
was  accounted  for  as a pooling-of-interests for financial reporting purposes.
The  historical  financial  statements  for  the periods prior to the merger are
restated  as  though  our  businesses  had  been  combined  during such periods.

RESULTS  OF  OPERATIONS

The  following  table  sets  forth, for the periods indicated, certain financial
data  as  a  percentage  of  total  revenues.

<TABLE>
<CAPTION>

                                                     YEARS ENDED DECEMBER 31,
                                                     ------------------------
                                                       1998     1999    2000
                                                      ------   ------  ------
<S>                                                   <C>      <C>     <C>
           Revenues:
             Net product sales. . . . . . . . . . .      55%     67%     89%
             Mobile cryosurgical procedures . . . .      20      33      11
             Revenue from collaborative agreements.      25      --      --
                                                      ------  ------   -----
               Total revenues . . . . . . . . . . .     100%    100%    100%
                                                      ------  ------   -----

           Costs and expenses:
             Cost of product sales. . . . . . . . .      39%     36%     39%
             Cost of mobile cryosurgical procedures       8      13       6
             Research and development . . . . . . .      77      74      48
             Selling, general and administrative. .     187     231     183
                                                      ------   ------  -----
               Total costs and expenses . . . . . .     311     354     276
                                                      -----    -----   -----
            Loss from operations. . . . . . . . . .    (211)   (254)   (177)
            Interest income (expense), net. . . . .      14     (14)    ( 9)
                                                       -----   -----   -----
            Net loss. . . . . . . . . . . . . . . .    (197)%  (268)%  (186)%
                                                      ======   =====   =====
</TABLE>


     Year  Ended  December  31,  2000  Compared  to Year Ended December 31, 1999

     Product  revenue  for  the  year  ended December 31, 2000 increased 156% to
$5,968,000  compared  to  $2,329,000  in  1999.   The  increase was attributable
primarily  to  increased  sales  of  our  Cryocare System and related disposable
Cryoprobes following Medicare's July 1, 1999 implementation of national coverage
for  localized  prostate  cancer.  We  have  also  experienced increased general
surgery  system  sales  in  Asia  in  2000.

     Revenue from mobile cryosurgical procedures for the year ended December 31,
2000  decreased  38%  to  $703,000  compared to $1,133,000 in 1999. The decrease
corresponds  to  a  decline  in  the  number  of  mobile cryosurgical procedures
performed  in  2000,  including a reduction in higher revenue liver cryosurgical
procedures.


     Gross  margins  on  product  sales were 56% for the year ended December 31,
2000  compared  to  46%  in 1999.  The increase is due to a mix of higher margin
cryosurgical  probe and system sales in 2000 coupled with a reduction in product
costs  due  to  manufacturing efficiencies associated with increased production.

     Gross margin on mobile cryosurgical procedures  was  42% for the year ended
December  31,  2000  compared  to  62%  in  1999.  The  change  in  margins  is
attributable  to procedure mix, including fewer higher margin cryosurgical liver
procedures  performed  in  2000.

     Research  and  development expense increased 24% to $3,204,000 for the year
ended  December  31,  2000 compared to $2,574,000 in 1999. The increase reflects
the  investment  we  have  made  in the form of additional personnel and related
infrastructure  to  support  improvement  in  our  Cryocare  System product, new
product  development  efforts  and  clinical  costs  associated with the Horizon
Prostatic  Stent.

     Selling,  general  and  administrative expense increased 53% to $12,230,000
for  the  year  ended  December  31,  2000  compared to $7,992,000 in 1999. This
increase reflects increased sales and marketing costs, including increased sales
commissions,  associated  with the commercialization of our cryosurgical product
for  prostate  cancer and an average increase of approximately 60% in our direct
sales  and  marketing  personnel  between  periods.

     Interest  income  (expense), net was ($624,000) for the year ended December
31, 2000 compared to ($476,000) in 1999.  The change was due to interest expense
associated  with  the issuance of debt in the middle of 1999 and 2000, including
corresponding  amortization  of  deferred  financing  costs, partially offset by
interest  income.

     Our  net  loss  for  the year ended December 31, 2000 was $12,399,000 or 97
cents per share on 12,757,000 weighted average shares outstanding, compared to a
net  loss  of  $9,264,000,  or 86 cents per share on 10,838,000 weighted average
shares  outstanding  for  the  same  period  in  1999.  The increase in net loss
resulted from higher research and development costs, higher selling, general and
administrative  expenses  and  increased  interest  expense  partially offset by
increased  revenues  and  lower  cost  of  sales  as  a  percentage  of  sales.

     Year  Ended  December  31,  1999  Compared  to Year Ended December 31, 1998

     Product  revenue  for  the  year  ended  December 31, 1999 increased 71% to
$2,329,000  compared  to  $1,363,000 in 1998.   The increase was attributable to
the third quarter 1999 launch of our cryosurgical technology in conjunction with
Medicare's  July  1, 1999 implementation of national coverage for this treatment
protocol  for  localized  prostate  cancer.

     Revenue from our mobile cryosurgical procedures for the year ended December
31,  1999  increased  131%  to  $1,133,000  compared  to  $490,000 in 1998.  The
increase  corresponds  to  a greater number of procedures performed in 1999 as a
result  of  increased  sales  and  marketing  efforts.

     Revenue  from collaborative agreements for the year ended December 31, 1999
was  zero compared to $642,000 in 1998.  The 1998 amount represented a licensing
fee  and the respective quarters' amortization of a lump-sum payment from Boston
Scientific Corporation based upon a previous distribution agreement entered into
in  November  1996.  The  distribution  agreement  with  Boston  Scientific  was
terminated  by  us  in  March  1999.

     Gross margins on our product sales were 46% for the year ended December 31,
1999  compared  to  29%  in 1998.  The increase is due to a mix of higher margin
cryosurgical  probe and system sales in 1999 coupled with a reduction in product
costs  due  to  manufacturing efficiencies associated with increased production.

     Gross  margin  on  our  mobile cryosurgical procedures was 62% for the year
Ended December 31, 1999 compared to  57% in  1998.  The  change  in  margins  is
attributable  to  procedure  mix  and  higher  surgery  rental  rates  in  1998.

     Our  Research  and  development expense increased 34% to $2,574,000 for the
year  ended  December  31,  1999  compared  to  $1,920,000 in 1998. The increase
reflects  the  investment  we  have made in the form of additional personnel and
related  infrastructure  to  support  general  product  improvement, new product
development  efforts  and  clinical  costs associated with the Horizon Prostatic
Stent.

     Selling, general and administrative expense increased 72% to $7,992,000 for
the  year  ended December 31, 1999 compared to $4,653,000 in 1998. This increase
reflects increased sales and marketing costs associated with the mid-1999 launch
of  our  cryosurgical  product for prostate cancer and an almost doubling of our
direct  sales  and  marketing  personnel  between  periods.

     Interest  income  (expense), net was ($476,000) for the year ended December
31,  1999  compared to $337,000 in 1998.  The change was due to interest expense
associated  with  the  issuance  of convertible debentures and a note payable in
1999,  including  corresponding amortization of deferred financing costs, offset
by  interest  income.

     Our  net  loss  for  the year ended December 31, 1999 was $9,264,000, or 86
cents per share on 10,838,000 weighted average shares outstanding, compared to a
net  loss  of  $4,925,000,  or 49 cents per share on 10,062,000 weighted average
shares  outstanding  for  the  same  period  in  1998.  The increase in net loss
resulted from higher research and development costs, higher selling, general and
administrative  expenses  and  increased  interest  expense  partially offset by
increased  revenues  and  lower  cost  of  sales  as  a  percentage  of  sales.

LIQUIDITY  AND  CAPITAL  RESOURCES

     We  have  funded  our  operations since inception primarily through private
placements  of  equity  securities,  loans that were subsequently converted into
equity  securities,  convertible  debentures, sales to customers, licensing fees
from  a  former distributor, a credit facility, interest on investments, and the
proceeds  from  the  exercise  of  outstanding  options  and  warrants.

     At  December  31,  2000,  our  cash  and  cash  equivalents  balance  was
$22,016,000, compared to $7,365,000 at  December 31,  1999.  This  increase  was
provided  primarily by the 2000 financing transactions discussed below offset by
cash used in operating activities. At December 31, 2000, net working capital was
$19,452,000,  and the ratio of current assets to current liabilities was 4 to 1.

     For the year ended December 31, 2000, net cash used by operating activities
was  approximately  $10.7  million compared to $8.4 million and $4.3 million for
the  years  ended December 31, 1999 and 1998, respectively.  Working capital has
been  used  as  our  operations have increased in 2000.  Net accounts receivable
increased  to  $2,114,000 at December 31, 2000, compared to $958,000 at December
31,  1999.  The  increase  resulted  primarily  from a corresponding increase in
product  sales  in  conjunction  with  the commercialization of our cryosurgical
technology for prostate cancer.  Inventories increased to $1,544,000 at December
31,  2000  compared  to $1,279,000 at December 31, 1999.  Property and equipment
additions  during  2000  were approximately $230,000 as compared to $339,000 and
$351,000  in  1999  and 1998, respectively.  Additionally, $781,000 of inventory
was  transferred  to  property  and equipment during 2000 under our cryosurgical
system  placement  program as compared to $490,000 in 1999.  Working capital was
provided as accounts payable and other current liabilities grew to approximately
$5,401,000  compared  to  $3,324,000  at December 31, 1999 due to an increase in
operating activities.  In 2000, we invested $250,000 in a business that provides
medical  equipment  and technician services to hospitals and out patient surgery
centers.  In  1999,  we  invested  $300,000  in  Sanarus Medical Inc., a women's
healthcare  company.

     In  June  and July 1999, we received a total of $8,000,000 from the sale to
institutional investors of 7% convertible debentures due in three years from the
date  of  issuance.  During  the  second  quarter  of  2000,  the  $8,000,000 in
convertible debentures was converted into 1,475,610 shares of common stock under
the  terms  of  the  agreements.  Under  the  agreements,  the purchasers of the
convertible  debentures  had  options  to purchase additional debentures for the
aggregate  principal  amounts of $5,000,000 and $3,000,000 prior to June 7, 2002
and  July  29, 2002, respectively.  The additional debentures mature three years
from the date they are issued, bear interest at 7% per annum and are convertible
in whole or in part at a conversion price of $6.75 per share (subject to certain
anti-dilution  adjustments).  We  had  a put option to require the purchasers to
buy  the $5,000,000 principal amount of additional debentures if the closing bid
price for the common stock as listed for quotation is more that $10.00 per share
for the twenty (20) trading days in a consecutive thirty (30) trading day period
and  on  the  date  we  elect  to  exercise the put option, and if certain other
conditions are met.    We also had a put option to require the purchasers to buy
the  $3,000,000  principal  amount  of  additional debentures if the closing bid
price  for the common stock as listed for quotation is more that $9.00 per share
for twenty (20) trading days in a consecutive thirty (30) trading day period and
on the date we elect to exercise the put option, and if certain other conditions
are  met. On May 5, 2000, we received $8,000,000 from the sale of the additional
7%  convertible  debentures  to institutional investors pursuant to the purchase
options  discussed  above  of which $500,000 was converted into 74,074 shares of
common  stock  during  the fourth quarter of 2000. In addition, in July 1999, we
entered  into  a  Loan  and  Security  Agreement  with a lender which originally
provided  for  a revolving credit line in the amount of $2,000,000 plus up to an
additional  $1,000,000  based on eligible accounts receivable. In April 2000, we
increased  the  revolving  portion  of  the  credit  facility from $2,000,000 to
$4,000,000, in addition to the $1,000,000 based on eligible accounts receivable.
As  of  December  31,  2000,  $1,000,000  of the loan was outstanding.  The loan
matures  and  all  amounts  must  be  repaid  on  July 31, 2001.  The loan bears
interest at the highest prime or equivalent rate announced by certain designated
banks,  plus 2% for the option of the loan based on eligible account receivables
or  3.5%.  The  loan is secured by a first priority lien on all of the assets of
our  business,  except  for  intellectual  property,  is fully guaranteed by our
subsidiary, AMP, and contains certain restrictive covenants.  We expect to renew
or  replace  the  loan  upon  maturity.

     In November 2000, we  sold 1,509,440 shares of our common stock at a price
Of $13.25 per share in  a  private  placement.  After  transaction  fees, legal,
accounting,  filing  fees  and  other  associated  expenses  of  approximately
$1,648,000,  the  net contribution to our capital was approximately $18,352,000.

     We  believe  that  our  existing  cash  resources  and credit facility will
provide sufficient  resources to meet present and reasonably foreseeable working
capital  requirements  and other cash needs through at least the end of 2001. If
we  elect  to  undertake  or  accelerate  significant  research  and development
projects  for  new products  or  pursue  corporate  acquisitions, it may require
additional  outside  financing  prior  to such time.  We expect that to meet our
long-term needs we may  need  to  raise  substantial  additional  funds  through
the sale of our equity securities, the  incurrence  of  indebtedness  or through
funds derived through entering into collaborative agreements with third parties.
We also expect to renew or replace our credit line which expires in  July  2001.

OTHER  MATTERS

     ACCOUNTING  PRINCIPLES

     In  June  1998,  the  Financial Accounting Standards Board, or FASB, issued
Statement  of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments  and  Hedging  Activities".  The provisions of the statement require
the  recognition  of  all  derivatives  as  either  assets or liabilities in the
consolidated  balance  sheet  and  the  measurement of those instruments at fair
value.  The  accounting for changes in the fair value of a derivative depends on
the  intended  use  of  the  derivative  and  the  resulting  designation.  This
statement,  as amended, is effective in the first quarter of 2001.  The adoption
of  SFAS 133 is not expected to have a material effect on our financial position
or  results  of  operations.

     In  September  2000,  the  FASB  issued  Statement  of Financial Accounting
Standards No. 140.  "Accounting for Transfers and Servicing of  Financial Assets
and  Extinguishments  of  Liabilities".  The  statement  replaces  Statement  of
Financial Accounting Standards  No. 125  and is effective in the second quarter
of  2001.  SFAS  140  revises  the  accounting  for  securitizations and other
transfers of financial assets.  The adoption of SFAS 140 is not expected to have
a material effect  on  our  financial  position  or  results  of  operations.

     OTHER

     We  are not aware of any issues related to environmental concerns that have
or  are  expected  to  materially  effect  our  business.

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     Our  financial instruments include cash, cash equivalents, notes receivable
and  debentures.  At  December  31,  2000,  the carrying values of our financial
instruments  approximated  their  fair  values.

     Our policy is not to enter into derivative financial instruments. We do not
have any significant foreign currency exposure since we do not transact business
in  foreign  currencies.  Therefore, we do not have significant overall currency
exposure.  In  addition,  we  do not enter into any futures or forward contracts
and  therefore  we  do not have significant market risk exposure with respect to
commodity  prices.

     We  maintain  a $5,000,000  credit facility bearing interest at the highest
Prime  rate or equivalent rate announced by certain designated banks, plus 2% or
3.5%.  The  current  rate  of  interest  on the credit facility is approximately
12.5%.  This is our only debt which does not have  a  fixed-rate of interest.  A
significant  change  in  interest  rates  would  not  materially  impact  our
consolidated  financial  statements.  The  credit facility expires in July 2001.

ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

(a)  DOCUMENTS  FILED  AS  A  PART  OF  THIS  REPORT

(1)  Index  to  Financial  Statements

       Independent  Auditors'  Report

       Consolidated  Statements  of  Operations  for  the  years  ended
       December  31,  1998,  1999  and  2000

       Consolidated  Balance  Sheets  at  December  31,  1999  and  2000

       Consolidated  Statements  of  Shareholders'  Equity  (Deficiency)
       for  the  years  ended  December  31,  1998,  1999  and  2000

       Consolidated  Statements  of  Cash  Flows  for  the  years  ended
       December  31,  1998,  1999  and  2000

       Notes  to  Consolidated  Financial  Statements

(2)  Financial  Statement  Schedule
       Schedule  II--Valuation  and  Qualifying  Accounts - for  the years ended
       December  31,  1998,  1999  and  2000

(All other schedules are omitted because they are not applicable or the required
information  is  included  in  the  financial  statements  or  notes  thereto.)





REPORT  OF  INDEPENDENT  AUDITORS

To  the  Board  of  Directors
Endocare,  Inc.:

We  have audited the accompanying consolidated financial statements of Endocare,
Inc.  (the  Company)  and  subsidiary  as  listed  in the accompanying index. In
connection with our audits of the financial statements, we also have audited the
financial  statement  schedule  as  listed  in  the  accompanying  index.  These
consolidated  financial  statements  and  financial  statement  schedule are the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  consolidated  financial  statements  and financial statement
schedule  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  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 consolidated financial statements referred to above present
fairly,  in  all material respects, the financial position of Endocare, Inc. and
subsidiary as of December 31, 1999 and 2000, and the results of their operations
and  their  cash  flows  for  each  of  the years in the three year period ended
December  31,  2000, in conformity with accounting principles generally accepted
in  the  United  States  of  America. Also in our opinion, the related financial
statement  schedule,  when  considered  in  relation  to  the  basic  financial
statements  taken  as  a  whole,  presents fairly, in all material respects, the
information  set  forth  therein.

KPMG  LLP

Orange  County,  California
February  8,  2001

<PAGE>


                             ENDOCARE, INC. AND SUBSIDIARY
                         CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                               FOR  THE  YEARS  ENDED  DECEMBER  31,
                                              --------------------------------------
                                              1998           1999            2000
                                          -------------  -------------  --------------
<S>                                       <C>            <C>            <C>
Revenues:
  Net product sales. . . . . . . . . . .  $  1,363,112   $  2,328,973   $   5,967,708
  Mobile cryosurgical procedures . . . .       490,066      1,132,901         703,240
  Revenue from collaborative agreements.       641,672             --              --
                                          -------------  -------------  --------------
    Total revenues . . . . . . . . . . .     2,494,850      3,461,874       6,670,948
                                          -------------  -------------  --------------
Costs and expenses:
  Cost of product sales. . . . . . . . .       974,308      1,254,917       2,607,128
  Cost of mobile cryosurgical procedures       208,685        429,751         405,321
  Research and development . . . . . . .     1,919,527      2,573,518       3,203,717
  Selling, general and administrative. .     4,653,487      7,991,885      12,230,294
                                          -------------  -------------  --------------
    Total costs and expenses . . . . . .     7,756,007     12,250,071      18,446,460
                                          -------------  -------------  --------------
Loss from operations . . . . . . . . . .   ( 5,261,157)    (8,788,197)    (11,775,512)
Interest income (expense), net . . . . .       336,593       (475,978)       (624,114)
                                          -------------  -------------  --------------
Net loss . . . . . . . . . . . . . . . .  $( 4,924,564)  $( 9,264,175)  $( 12,399,626)
                                          =============  =============  ==============
Net loss per share of common stock -
  basic and diluted. . . . . . . . . . .  $       (.49)  $       (.86)  $        (.97)
                                          =============  =============  ==============
Weighted average shares of
  common stock outstanding . . . . . . .    10,062,000     10,838,000      12,757,000
                                          =============  =============  ==============
</TABLE>

    The accompanying notes are an integral part of these consolidated financial
                                   statements.


<PAGE>


                          ENDOCARE, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                                           DECEMBER  31
                                                                                          -------------
                                                                                       1999           2000
                                                                                   -------------  -------------
<S>                                                                                <C>            <C>
                                    ASSETS
                                   ---------
      Current assets:
         Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . .  $  7,364,951   $ 22,016,448
         Accounts receivable, less allowances of $270,000
             and $406,639 at December 31, 1999 and 2000,
             respectively. . . . . . . . . . . . . . . . . . . . . . . . . . . . .      958,145      2,113,766
         Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1,278,785      1,543,733
         Prepaid expenses and other current assets. . . . . . . . . . . . . . . .       166,969        178,972
                                                                                   -------------  -------------
             Total current assets . . . . . . . . . . . . . . . . . . . . . . . .     9,768,850     25,852,919
      Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . .       962,720      1,496,153
      Deferred financing costs and other assets, net of accumulated amortization
      of $413,394 and $188,742 at December 31, 1999 and 2000, respectively.           2,264,803      1,495,718
                                                                                   -------------  -------------
                Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 12,996,373   $ 28,844,790
                                                                                   =============  =============
             LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
             -------------------------------------------------
      Current liabilities:
         Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  1,517,470   $  2,231,344
         Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . .       910,103      1,646,079
         Other accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . .       896,210      1,523,602
         Credit facility. . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --      1,000,000
                                                                                   -------------  -------------
             Total current liabilities. . . . . . . . . . . . . . . . . . . . . .     3,323,783      6,401,025

      Convertible debentures. . . . . . . . . . . . . . . . . . . . . . . . . . .     8,000,000      7,500,000
      Note payable and other liabilities. . . . . . . . . . . . . . . . . . . . .     2,153,082         74,268
                                                                                   -------------  -------------
             Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . .    13,476,865     13,975,293

      Shareholders' equity (deficiency):
         Preferred stock, $.001 par value; 1,000,000 shares
             authorized; none issued and outstanding. . . . . . . . . . . . . . .            --             --
         Common stock, $.001 par value; 50,000,000 shares
             authorized;  11,248,323 and 15,018,649 issued and
             outstanding at December 31, 1999 and 2000, respectively. . . . . . .        11,248         15,019
         Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . .    20,310,010     48,163,186
         Receivable from shareholders . . . . . . . . . . . . . . . . . . . . . .    (1,028,125)    (1,135,457)
         Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . . .   (19,773,625)   (32,173,251)
                                                                                   -------------  -------------
             Total shareholders' equity (deficiency). . . . . . . . . . . . . . .      (480,492)    14,869,497
                                                                                   -------------  -------------
      Commitments and contingencies
             Total liabilities and shareholders' equity (deficiency). . . . . . .  $ 12,996,373   $ 28,844,790
                                                                                   =============  =============
</TABLE>


    The accompanying notes are an integral part of these consolidated financial
                                   statements.

<PAGE>


                                     ENDOCARE, INC. AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)


<TABLE>
<CAPTION>

                                                                                                                        TOTAL
                                                                        ADDITIONAL      RECEIVABLE                  SHAREHOLDERS'/
                                                 COMMON STOCK            PAID-IN           FROM        ACCUMULATED      EQUITY
                                              SHARES       CAPITAL        AMOUNT        SHAREHOLDERS     DEFICIT     (DEFICIENCY)
                                          ------------  -----------  ---------------  --------------  -------------  -------------
<S>                                       <C>           <C>          <C>              <C>             <C>            <C>
BALANCE AT DECEMBER 31, 1997 . . . . . .     8,638,354  $     8,638  $     9,536,347  $          --   $ (5,584,886)  $  3,960,099
Common stock issued in
   private placement, net. . . . . . . .     2,000,000        2,000        6,883,820             --             --      6,885,820
Stock options exercised. . . . . . . . .        60,000           60           10,741             --             --         10,801
Equity provided by
    warrant amortization . . . . . . . .            --           --           79,044             --             --         79,044
Net loss . . . . . . . . . . . . . . . .            --           --               --             --     (4,924,564)    (4,924,564)
                                          ------------  -----------  ---------------  --------------  -------------  -------------
BALANCE AT DECEMBER 31, 1998 . . . . . .    10,698,354       10,698       16,509,952             --   $(10,509,450)  $  6,011,200
Common stock issued. . . . . . . . . . .       210,988          211        1,316,535     (1,028,125)            --        288,621
Stock options and warrants exercised . .       338,981          339          750,023             --             --        750,362
Equity provided by
    warrant amortization . . . . . . . .            --           --          133,500             --             --        133,500
Fair value of convertible debenture
    purchase options . . . . . . . . . .            --           --        1,600,000             --             --      1,600,000
Net loss . . . . . . . . . . . . . . . .            --           --               --             --     (9,264,175)    (9,264,175)
                                          ------------  -----------  ---------------  --------------  -------------  -------------
BALANCE AT DECEMBER 31, 1999 . . . . . .    11,248,323       11,248       20,310,010     (1,028,125)   (19,773,625)      (480,492)

Private placement of common stock, net .     1,509,440        1,509       18,350,059             --             --     18,351,568
Conversion of convertible debentures and
    accrued interest, net. . . . . . . .     1,588,545        1,589        7,473,928             --             --      7,475,517
Common stock issued for domain name. . .        20,000           20          434,980             --             --        435,000
Common stock issued, other . . . . . . .         7,216            8          100,675             --             --        100,683
Stock options and warrants exercised . .       645,125          645        1,199,386       (107,332)            --      1,092,699
Equity provided by
    warrant amortization . . . . . . . .            --           --          294,148             --             --        294,148
Net loss . . . . . . . . . . . . . . . .            --           --               --             --    (12,399,626)   (12,399,626)
                                          ------------  -----------  ---------------  --------------  -------------  -------------
BALANCE AT DECEMBER 31, 2000 . . . . . .    15,018,649  $    15,019  $    48,163,186  $  (1,135,457)  $(32,173,251)  $ 14,869,497
                                          ============  ===========  ===============  ==============  =============  =============
</TABLE>

    The accompanying notes are an integral part of these consolidated financial
                                   statements.

<PAGE>


                                  ENDOCARE, INC. AND SUBSIDIARY
                              CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                     FOR  THE  YEARS  ENDED  DECEMBER  31,
                                                     -------------------------------------
                                                      1998           1999           2000
                                                  -------------  ------------  ---------------
<S>                                               <C>            <C>           <C>
Cash flows from operating activities:
------------------------------------
  Net loss . . . . . . . . . . . . . . . . . . .  $ (4,924,564)  $(9,264,175)  $(  12,399,626)
  Adjustments to reconcile net loss to net
  cash used in operating activities:
  Depreciation and amortization. . . . . . . . .       164,629       365,925          575,057
  Amortization of warrant value. . . . . . . . .        79,044       133,500          294,148
  Amortization of deferred financing costs . . .            --       378,695          395,614
  Common stock issued for interest payable . . .            --       288,621          549,098
Changes in operating assets and liabilities:
  Accounts receivable. . . . . . . . . . . . . .        12,039      (550,543)     ( 1,155,621)
  Inventories. . . . . . . . . . . . . . . . . .       382,982    (1,226,412)     ( 1,046,242)
  Prepaid expenses and other current
   assets . . . . . . . . . . .. . . . . . . . .       (23,160)      (79,572)      (   25,410)
  Other assets . . . . . . . . . . . . . . . . .      (112,922)       26,778           30,044
  Accounts payable . . . . . . . . . . . . . . .      (169,015)      863,922          713,874
  Accrued compensation . . . . . . . . . . . . .       370,798       305,475          735,976
  Other accrued liabilities. . . . . . . . . . .        90,286       373,656          627,257
  Deferred revenue . . . . . . . . . . . . . . .      (166,672)           --       (   38,000)
                                                  -------------  ------------  ---------------
Net cash used in operating activities. . . . . .   ( 4,296,555)   (8,384,130)    ( 10,743,831)
                                                  -------------  ------------  ---------------
Cash flows from investing activities:
------------------------------------------------
  Purchases of property and equipment. . . . . .      (350,645)     (338,818)        (229,812)
  Investments. . . . . . . . . . . . . . . . . .            --      (300,061)        (250,000)
                                                  -------------  ------------  ---------------
Net cash used in investing activities. . . . . .      (350,645)     (638,879)        (479,812)
                                                  -------------  ------------  ---------------
Cash flows from financing activities:
------------------------------------------------
Proceeds from credit facility. . . . . . . . . .            --     2,000,000        2,000,000
Payments made to credit facility and other debt.            --            --      ( 3,040,814)
Proceeds from private placement. . . . . . . . .     6,885,820            --       18,351,568
Stock options and warrants exercised . . . . . .        10,801       750,362        1,199,386
Proceeds from issuance of debentures . . . . . .            --     8,000,000        8,000,000
Debt issuance costs and other. . . . . . . . . .       124,000      (648,201)        (635,000)
                                                  -------------  ------------  ---------------
Net cash provided by financing activities. . . .     7,020,621    10,102,161       25,875,140
                                                  -------------  ------------  ---------------
Net increase in cash and cash equivalents. . . .     2,373,421     1,079,152       14,651,497
Cash and cash equivalents, beginning of year . .     3,912,378     6,285,799        7,364,951
                                                  -------------  ------------  ---------------
Cash and cash equivalents, end of year . . . . .  $  6,285,799   $ 7,364,951   $   22,016,448
                                                  =============  ============  ===============
Non-cash activities:
-------------------
  Note receivable from stock sale. . . . . . . .  $         --   $ 1,028,125   $           --
  Convertible debentures and accrued interest
   converted to common stock, net of unamortized
   deferred financing costs of $1,573,585. . . .            --            --        7,475,517
  Acquisition of trademark and domain name through
   issuance of 20,000 shares of common stock . .            --            --          435,000
  Transfer of inventory to property
   and equipment for placement at customer sites            --       490,237          781,294
  Fair value of convertible debenture
   purchase options credited to additional
   paid-in-capital. . . . . . . . . . . . . . . . .         --     1,600,000               --
  Issuance of common stock for receivable. . . .            --            --          107,332
                                                  -------------  ------------  ---------------
      Total non-cash activities. . . . . . . . .  $         --   $ 3,118,362   $    8,799,143
                                                  =============  ============  ===============
</TABLE>

    The accompanying notes are an integral part of these consolidated financial
                                   statements.

<PAGE>


                          ENDOCARE, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.     ORGANIZATION  AND  OPERATIONS  OF  THE  COMPANY

Endocare,  Inc.  (the  "Company")  is  a  medical  device company that develops,
manufactures and markets cryosurgical and stent technologies for applications in
oncology  and urology.  The Company also operates a mobile cryosurgery business.
The  Company has concentrated on developing devices for the treatment of the two
most  common  diseases  of  the  prostate,  prostate  cancer and benign prostate
hyperplasia.  The  Company  is  also  developing  cryosurgical  technologies for
treating  tumors  in  other  organs,  including  the  kidney,  breast and liver.

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Principles  of Consolidation:  The consolidated financial statements include the
accounts  of  Endocare,  Inc.  and  its wholly-owned subsidiary Advanced Medical
Procedures,  Inc.  All  intercompany  balances  and  transactions  have  been
eliminated  in  consolidation.

Use  of  Estimates:  The  preparation of financial statements in conformity with
generally  accepted  accounting principles requires management to make estimates
and  assumptions  that  affect the reported amounts of assets and liabilities at
the  date  of  the financial statements and the reported amounts of revenues and
expenses  during  the  reporting period.  Actual results could differ from those
estimates.

Cash  and  Cash  Equivalents:  All  highly  liquid investments purchased with an
original maturity of three months or less are considered to be cash equivalents.

Inventories:  Inventories  are  stated  at  the  lower of actual cost (first-in,
first-out)  or  net  realizable  value.

Property  and  Equipment:  Property  and  equipment  are  stated at cost and are
depreciated  on  a  straight-line  basis  over the estimated useful lives of the
respective  assets,  which  range from two to five years. Leasehold improvements
are  amortized  over  the shorter of the estimated useful lives of the assets or
the related lease term.  Cryosurgical equipment placed at customer sites for use
with  the  Company's disposable Cryoprobes (TM) is depreciated into product cost
of  sales  over  estimated  useful  lives  of  three  years.

Long-Lived  Assets:  The  Company  reviews  property,  equipment, and intangible
assets  for  possible  impairment whenever events or circumstances indicate that
the  carrying  amounts may not be recoverable. If the sum of the expected future
undiscounted  cash  flows  is  less  than  the  carrying  amount of an asset, an
impairment  loss  is recognized as the excess of the carrying value of the asset
over  its  fair  value. In accordance with management policies, during 2000, the
Company recorded a $100,000 impairment charge for certain non-revenue producing,
cryosurgical  fixed  asset placements.  The amount represents the net book value
of  the product, as the fair value of these assets was determined to be nominal.

Deferred  Financing  Costs:  Deferred  financing costs are amortized to interest
expense  over  the  lives  of  the  respective  debt.

Revenue Recognition: The Company recognizes product revenue upon the shipment of
its  products,  including  the shipment of disposable products to customer sites
where  the  Company  has  placed  cryosurgical  systems.  Revenue  from  mobile
cryosurgical  procedures  is  recognized upon completion of procedures.  Revenue
from  collaborative  agreements  are  recognized  as  the related activities are
performed  or  milestones  are  met.  Realizability  of  accounts  receivable is
determined  based upon an understanding of the financial condition of, and prior
history  with,  the  buyer and overall historical experience.  In December 1999,
the  SEC  issued  Staff  Accounting  Bulletin  No. 101 ("SAB 101").  SAB 101, as
amended,  was effective October 1, 2000 and provides the SEC's views in applying
Generally Accepted Accounting Principles to selected revenue recognition issues.
The  adoption  of  SAB  101  did  not  cause  a material change to the Company's
existing  revenue  recognition  policies.

Warranty  Costs:  Certain  of  the  Company's products are covered by warranties
against  defects in material and workmanship for periods of up to twelve months.
The  estimated  warranty  cost  is  recorded at the time of sale and is adjusted
periodically  to  reflect  actual  experience.

Research  and Development: Research and development costs relate to both present
and  future  products  and  are  expensed  as  incurred.

Net  Loss Per Share: The Company has adopted SFAS No. 128, "Earnings Per Share".
Under  SFAS  128, basic EPS is calculated by dividing net earnings (loss) by the
weighted-average  common  shares  outstanding  during  the  period.  Diluted EPS
reflects the potential dilution to basic EPS that could occur upon conversion or
exercise of securities, options, convertible debentures, or other such items, to
common  shares  using  the treasury stock method based upon the weighted-average
fair  value of the Company's common shares during the period. In accordance with
SFAS  128, the consolidated loss (numerator), shares (denominator) and per-share
amount  for  fiscal 1998 are $(4,924,564), 10,062,000 and $(0.49), respectively,
the consolidated loss (numerator), shares (denominator) and per-share amount for
fiscal  1999  are  $(9,264,175),  10,838,000  and $(0.86), respectively, and the
consolidated  loss  (numerator),  shares  (denominator) and per-share amount for
fiscal  2000  are  $(12,399,626),  12,757,000  and $(0.97), respectively. As the
Company  has  been  in  a net loss position for the fiscal years 1998, 1999, and
2000,  the  potential  dilution  from  the  conversion  of options, warrants and
convertible  debentures to common stock of 2,549,000, 3,953,000 and 4,332,027 as
of  December  31,  1998,  1999  and 2000, respectively, were not used to compute
diluted loss per share as the effect was antidilutive. Consequently, diluted EPS
equals  basic  EPS  for  all  periods  presented.

Fair  Value  of  Financial  Instruments:  The  carrying  amount of cash and cash
equivalents  approximates  fair  value  for all periods presented because of the
short-term  maturity of these financial instruments. The carrying amounts of all
other financial instruments on the consolidated balance sheets approximate their
fair  values.

Comprehensive  Income:  The  Company  has  adopted  SFAS  No.  130 ("SFAS 130"),
"Reporting  Comprehensive  Income."  This  statement  establishes  rules for the
reporting  of comprehensive income and its components.  The adoption of SFAS 130
did  not  impact  the  Company's  consolidated  financial  statements or related
disclosures  as  the Company does not have any components of other comprehensive
income.  Therefore,  comprehensive  income  (loss) equaled net income (loss) for
all  periods  presented.

Segment  Disclosures:  The  Company  has  adopted  SFAS  No.  131  ("SFAS 131"),
"Disclosure  about Segments of an Enterprise and Related Information."  SFAS 131
establishes  standards  for reporting information about operating segments.  The
Company operates in one industry segment - the design, manufacture and marketing
of  surgical  devices  and  related  procedures  to  treat  prostate  diseases.

3.     MERGER

On  June  30,  1999,  Endocare  acquired  all  the outstanding units of Advanced
Medical  Procedures,  LLC,  a  Florida  limited  liability company ("AMP").  AMP
operates a mobile cryosurgery business which provides cryosurgical equipment for
the  treatment  of  prostate  and  liver  cancer  on  a  procedural  basis.  The
acquisition  was  consummated  pursuant  to  a  Plan  of Merger (the "AMP Merger
Agreement")  by  and  among AMP, Endocare, and Advanced Medical Procedures, Inc.
("AMPI"),  a  Delaware  corporation  and  wholly-owned  subsidiary  of Endocare.
Pursuant  to  the Merger Agreement, AMP was merged with and into AMPI, with AMPI
surviving  as  a  wholly-owned  subsidiary  of  Endocare.  The  AMP  unitholders
received an aggregate of 260,000 shares of Endocare Common Stock in exchange for
all  of  their  AMP  units.  The  acquisition  was  accounted  for  as  a
pooling-of-interests for financial reporting purposes.  The pooling-of-interests
method  of  accounting  is  intended to present as a single interest two or more
common  stockholders'  interests which were previously independent; accordingly,
the  historical  financial  statements  for the periods prior to the merger have
been  restated  as  though  the  companies had been combined.  Fees and expenses
related  to  the  merger were expensed as incurred and amounted to approximately
$50,000.






4.     SUPPLEMENTAL  FINANCIAL  STATEMENT  DATA

<TABLE>
<CAPTION>

                                                                 YEARS ENDED DECEMBER 31,
                                                                 ------------------------
                                                             1998          1999          2000
                                                          -----------  ------------  ------------
<S>                                                       <C>          <C>           <C>
Interest income (expense), net
  Interest income. . . . . . . . . . . . . . . . . . . .  $  338,710   $   315,864   $   652,331
  Interest Expense . . . . . . . . . . . . . . . . . . .      (2,117)     (791,842)   (1,276,445)
                                                          -----------  ------------  ------------
    Interest income (expense), net . . . . . . . . . . .  $  336,593   $  (475,978)  $   624,114
                                                          ===========  ============  ============

  Cash paid for interest . . . . . . . . . . . . . . . .  $    2,117   $    17,580   $     8,993
                                                          ===========  ============  ============

Inventories:
  Raw materials. . . . . . . . . . . . . . . . . . . . .                $  481,141   $   763,389
  Work in process. . . . . . . . . . . . . . . . . . . .                   310,651       288,480
  Finished goods . . . . . . . . . . . . . . . . . . . .                   486,993       491,864
                                                                       -----------   -----------
    Total inventories. . . . . . . . . . . . . . . . . .                $1,278,785   $ 1,543,733
                                                                        ===========  ============

Property and equipment:
  Equipment. . . . . . . . . . . . . . . . . . . . . . . .              $  488,000   $   616,360
  Equipment -cryosurgical systems placed at customer sites                 490,237     1,271,532
  Furniture and fixtures . . . . . . . . . . . . . . . . .                 442,531       530,388
  Leasehold improvements . . . . . . . . . . . . . . . . .                  86,440       100,034
                                                                       -----------   ------------
    Total property and equipment, at cost. .                             1,507,208     2,518,314
  Accumulated depreciation and amortization. . . . . . . .                (544,488)   (1,022,161)
                                                                        -----------  ------------
    Net property and equipment . . . . . . .                            $  962,720   $ 1,496,153
                                                                        ===========  ============
</TABLE>


5.     DEBT

Convertible  Debentures

On  June  7,  1999  and  July  30,  1999, the  Company  received $5,000,000  and
$3,000,000,  respectively, from the sale of its 7% convertible debentures due in
three  years  (the  "Debentures").  Interest was payable annually in cash or, at
the  Company's  option, in common stock at a price per share based on recent bid
prices  prior  to  the date interest is paid.  Under the financing arrangements,
the  purchasers  had options to purchase additional debentures for the aggregate
principal  amounts  of  $5,000,000  and  $3,000,000.   Under  the  circumstances
described  below,  the  Company  could  require the purchasers to exercise these
purchase  options.  The  $5,000,000  principal  amount  of  the  Debentures  was
originally  due  on  June  7,  2002,  and  was  eligible for conversion into the
Company's common stock in whole or in part at the purchasers' option at any time
on  or  prior  to  June  7, 2002 at a conversion price of $5.125 per share.  The
$3,000,000  principal  amount  of  the Debentures was originally due on July 29,
2002,  and  was eligible for conversion into the Company's common stock in whole
or  in  part  at  the  purchasers'  option  at  any  time,  subject  to  certain
restrictions,  on  or  prior to July 29, 2002 at a conversion price of $6.00 per
share.  The conversion prices were subject to certain anti-dilution adjustments.
In addition to the purchasers' option to convert the $5,000,000 principal amount
of  the Debentures, the Company could have required the purchaser to convert the
Debentures  into common stock at a conversion price of $5.125 per share (subject
to  certain  anti-dilution adjustments) if the bid price for the common stock as
listed  for  quotation  was  above  $8.00 per share for twenty (20) trading days
during  a consecutive (30) trading day period, and certain other conditions were
met.  Subject  to certain restrictions, the Company could have required that the
purchasers convert the $3,000,000 principal amount of the debentures into common
stock at a conversion price of $6.00 per share (subject to certain anti-dilution
adjustments)  if  the bid price for the common stock as listed for quotation was
above  $9.00  per share for twenty (20) trading days during a consecutive thirty
(30)  trading  day  period,  and  certain other conditions were met.  During the
second  quarter  of 2000, the original $8,000,000 in convertible debentures sold
to  the  investors  in 1999 were converted into 1,475,610 shares of common stock
under  the  terms  of  the  original  agreements.

Under  a  securities  purchase  agreement,  the  purchasers  had  a  call option
exercisable  at  any time prior to June 7, 2002 to require that the Company sell
to  the purchasers an additional $5,000,000 principal amount of debentures.  The
additional  debentures  mature  three  years from the date they are issued, bear
interest at 7% per annum and are convertible in whole or in part at a conversion
price  of  $6.75  per share (subject to certain anti-dilution adjustments).  The
Company  had  a  put  option  to  require  the  purchasers to buy the $5,000,000
principal  amount  of  additional  debentures  if  the closing bid price for the
common  stock  as  listed  for  quotation was more that $10.00 per share for the
twenty  (20)  trading  days  in a consecutive (30) trading day period and on the
date  the  Company  elected  to  exercise  the  put option, and if certain other
conditions  were  met.  The purchasers also had a call option exercisable at any
time  prior to July 29, 2002 to require the Company to sell to the purchasers an
additional $3,000,000 principal amount of debentures.  The additional debentures
mature  three years from the date they are issued, bear interest at 7% per annum
and  are  convertible in whole or in part at the option of the purchasers at any
time  prior  to  maturity  into  common stock at a conversion price of $6.75 per
share  (subject  to  certain  anti-dilution adjustments).  The Company had a put
option  to  require  the  purchasers  to  buy the $3,000,000 principal amount of
additional  debentures  if  the closing bid price for the common stock as listed
for  quotation  was  more than $9.00 per share for twenty (20) trading days in a
consecutive  thirty  (30) trading day period and on the date the Company elected
to  exercise  the  put option, and certain other conditions were met.  On May 5,
2000,  the  Company  received  $8,000,000  from  the  sale  of the additional 7%
convertible  debentures  to  institutional  investors  pursuant  to the purchase
options  discussed  above  of which $500,000 was converted into 74,074 shares of
common  stock  during  the  fourth  quarter  of  2000.  Financing costs totaling
$585,000 associated with the transaction are being amortized to interest expense
over  three  years.  The  same  investors originally purchased the $8,000,000 of
convertible  debentures  in  1999.  In 2000, the Company issued 38,861 shares of
common  stock  for  $549,098  in  interest  payable.

The  fair  value  of  the  purchasers' two call options described above totaling
$1,600,000,  was  estimated  using  the  Black-Scholes  pricing  model  and  was
reflected  in  deferred  financing  costs  and  other assets in the accompanying
condensed  consolidated  balance sheet as of December 31, 1999.  This amount was
being amortized to interest expense over the original lives of the call options.
The  net  unamortized balance totaling $1,156,863 was reclassified to additional
paid  in  capital  upon  conversion  of  the  original $8,000,000 of convertible
debentures  into  common  stock.

Credit  Facility

On  July 29, 1999, the Company entered into a Loan and Security Agreement with a
lender  which  originally  provided for a revolving credit line in the amount of
$2,000,000  plus  up  to  an  additional  $1,000,000  based on eligible accounts
receivable  of  the  Company (the "Loan").  In April 2000, the Company increased
the  revolving  portion  of its credit facility from $2,000,000 to $4,000,000 in
addition to the $1,000,000 based on eligible accounts receivable of the Company.
As  of  December  31, 1999 and 2000, $2,000,000 and $1,000,000, respectively, of
the  loan  was  outstanding.  The Loan matures and all amounts must be repaid on
July  31, 2001.  The Loan bears interest at the highest prime or equivalent rate
announced  by certain designated banks, plus 2% for the option of the loan based
on  eligible  accounts  receivable  or  3.5%.  The  Loan  is  secured by a first
priority  lien  on  all  of  the  assets of the Company, except for intellectual
property,  is fully guaranteed by the Company's subsidiary, and contains certain
restrictive  covenants.   The  Company  is  in  compliance  with the restrictive
covenants  of  the  agreement  as  of  December  31,  2000.

Long-term  debt  is comprised of convertible debentures as of December 31, 2000.
Aggregate  maturities  of  long-term  debt are zero, zero and $7,500,000 for the
years ending December 31, 2001, 2002 and 2003, respectively.  The balance of the
long-term  liabilities  of  approximately  $74,000 as of December 2000, consists
primarily  of  a  capital  lease  obligation  and  equipment  loan.

6.     PRIVATE  PLACEMENTS

In  April  1998, the Company sold 2,000,000 shares of common stock at a price of
$3.50  per share in a direct private placement.  After legal, accounting, filing
fees  and  other  associated  expenses  of  approximately  $150,000,  the  net
contribution  to  the  Company's  capital  was  approximately  $6,886,000.

In  November  2000,  the  Company sold 1,509,440 shares of its common stock at a
price  of  $13.25  per  share  in a private placement.  In addition, warrants to
purchase up to an aggregate of 188,680 shares of the Company's common stock were
issued  to  the  investors  at  an  exercise  price  of $13.9125 per share.  The
warrants  are  exercisable for  a  term of five years from the date of issuance.
After  transaction  fees,  legal,  accounting,  filing fees and other associated
expenses  of  approximately  $1,648,000  the  net  contribution to the Company's
capital  was  approximately  $18,352,000.

7.     STOCK  OPTIONS  AND  WARRANTS

At  December  31,  2000,  Endocare  had  two  stock-based compensation plans, as
described  below.  Per  FASB Statement No. 123, the Company has elected to apply
APB  Opinion  No.  25  and  related Interpretations in accounting for its plans.

The  1995  Stock  Plan  authorizes the Board or one or more committees which the
Board  may appoint from among its members (the "Committee") to grant options and
rights  to  purchase  common  stock  to  employees  and  certain consultants and
distributors. Options granted under the 1995 Stock Plan may be either "incentive
stock  options"  as defined in Section 422 of the Internal Revenue Code of 1986,
as  amended,  or  nonstatutory  stock options, as determined by the Board or the
Committee.  The  exercise  price of options granted under the 1995 Stock Plan is
equal  to  the  fair market value of Endocare common stock on the date of grant.
Options  generally vest 25% on the one year anniversary date, with the remaining
75%  vesting monthly over the following three years. Options are exercisable for
ten  years.  A  total of 3,649,449 shares of common stock have been reserved for
issuance  under  the  1995  Stock  Plan,  subject  to  an automatic annual share
increase  to  which  the  number of shares available for issuance under the plan
will automatically increase on the first trading day of each calendar year by 3%
of  the  total number of shares of the Company's common stock outstanding at the
end of the preceding calendar year, to a maximum of 500,000 shares each year. As
of  December  31,  2000,  options to purchase a total of 3,510,247 shares of the
Company's  common  stock  have  been  granted  under  the  1995  Stock  Plan.

The  1995 Director Option Plan (the "Director Plan") was adopted by the Board of
Directors  (the  "Board")  in  October  1995 and approved by the shareholders in
November  1995.  It  provides  automatic,  nondiscretionary grants of options to
Endocare's  non-employee  directors  ("Outside  Directors").  The  Director Plan
provides  that  each  Outside  Director  is granted an option to purchase 20,000
shares  of  Endocare  common stock vested over a two-year period upon his or her
initial  election  or  appointment  as  an  Outside Director. Subsequently, each
Outside  Director  who  has  served  for  at least six months will be granted an
additional  option to purchase 5,000 shares of Endocare common stock, on January
1  of  each  year,  or  the  first  trading day thereafter, so long as he or she
remains  an  Outside  Director. The exercise price of options granted to Outside
Directors  must be the fair market value of Endocare common stock on the date of
grant.  Options  granted to Outside Directors have ten-year terms, subject to an
Outside  Director's  continued  service  as  a  director. The Subsequent Options
granted  to  the  Outside  Directors  become  fully  exercisable  on  the  first
anniversary  of the date of grant. A total of 300,000 shares of common stock has
been  reserved  for  issuance  under the Director Plan. As of December 31, 2000,
options to purchase a total of 130,000 shares of the Company's common stock have
been  granted  under  the  Director  Plan.

<PAGE>


The  following  tables  summarize  Endocare's  option activity under both plans:

<TABLE>
<CAPTION>

                                         1998                      1999                        2000
                                         ----                      ----                        ----
                                            WEIGHTED AVG.              WEIGHTED AVG.               WEIGHTED AVG.
                                NUMBER OF  EXERCISE PRICE  NUMBER OF  EXERCISE PRICE  NUMBER OF   EXERCISE PRICE
                                 OPTIONS     PER OPTION     OPTIONS     PER OPTION     OPTIONS     PER OPTION
                                ----------  -----------     ----------  -----------    ----------  -----------
<S>                             <C>        <C>             <C>        <C>             <C>         <C>
Outstanding, beginning of year  1,499,916  $      1.36     2,657,553  $      1.96     2,959,184   $      2.24
Granted during year. . . . . .  1,463,000  $      2.70       749,500  $      3.31       428,500   $     11.09
Cancelled during year. . . . .   (245,363) $      2.84      (245,138) $      3.04      (192,669)  $      5.61
Exercised. . . . . . . . . . .    (60,000) $      0.18      (202,731) $      1.60      (458,425)  $      2.38
                                ---------- -----------     ---------- -----------     ----------  -----------
Outstanding, end of year . . .  2,657,553  $      1.96     2,959,184  $      2.24     2,736,590   $      3.37
                                ========== ===========     ========== ===========     ==========  ===========
</TABLE>




<TABLE>
<CAPTION>

                                    OPTIONS OUTSTANDING                             OPTIONS EXERCISABLE
                                    -------------------                             -------------------
                        NUMBER                                                    NUMBER
                      OUTSTANDING         WEIGHTED-AVG.                         EXERCISABLE
RANGE OF                  AT                REMAINING        WEIGHTED-AVG.           AT           WEIGHTED-AVG.
EXERCISE PRICES    DECEMBER 31, 2000    CONTRACTUAL LIFE    EXERCISE PRICE   DECEMBER 31, 2000  EXERCISE PRICE
---------------    -----------------    ----------------    --------------   -----------------  ---------------
<S>               <C>                  <C>                  <C>              <C>                 <C>
0.18  -  2.00 .              788,354           5.4  years  $          0.50             709,982   $         0.34
2.03  -  4.00 .            1,402,831           7.3  years  $          2.65             960,310   $         2.70
4.25  -  6.19 .              166,105           8.6  years  $          5.08              37,043   $         5.08
6.81  -  9.00 .              178,300           9.0  years  $          8.93               6,083   $         8.51
11.75  -13.88 .              154,500           9.8  years  $         12.38               5,000   $        11.88
16.00  -16.75 .               46,500           9.4  years  $         16.23                  --   $           --
                  -------------------  -------------------  ---------------  ------------------  --------------
0.18  -16.75. .            2,736,590           7.1  years  $          3.37           1,718,418   $         1.82
                  ===================  ===================  ===============  ==================  ==============
</TABLE>





The  following  table  presents  consolidated  pro  forma  information as if the
Company  recorded  compensation  cost  using  the fair value of the issued stock
options  using  the  Black-Scholes  valuation  model  consistent  with SFAS 123:



<TABLE>
<CAPTION>

                                             1998          1999           2000
                                         ------------  -------------  -------------
<S>                                      <C>           <C>            <C>
Net loss:
--------
   As reported . . . . . . . . . . .     $(4,924,564)  $ (9,264,175)  $(12,399,626)
   Assumed stock compensation cost .        (363,000)      (896,000)    (1,830,000)
                                         ------------  -------------  -------------
   Pro forma, adjusted . . . . . . .     $(5,287,564)  $(10,160,175)  $(14,229,626)
                                         ============  =============  =============
Net loss per share - basic and diluted:
---------------------------------------
   As reported . . . . . . . . . . .     $     (0.49)  $      (0.86)  $      (0.97)
   Pro forma, adjusted . . . . . . .     $     (0.53)  $      (0.94)  $      (1.12)
</TABLE>

The  weighted  average fair value of the Company's options at the grant date was
approximately  $1.35  in  1998,  and  $1.90 in 1999, and $3.22 in 2000. The fair
value  of  each  option  grant  is  estimated  on  the  date  of grant using the
Black-Scholes  option  pricing  model,  with  the  following  assumptions:


<TABLE>
<CAPTION>

                                1998        1999       2000
                              --------    -------    --------
<S>                           <C>         <C>        <C>
    Stock volatility. . . .         .1          .5         .9
    Risk-free interest rate      6.00%       6.00%       4.7%
    Option term in years. .   10 years    10 years   10 years
    Stock dividend yield. .         --          --         --
</TABLE>

The Company issued warrants to purchase 5,000, 176,506 and 239,070 shares of the
Company's  common  stock  in  1998,  1999,  and 2000, respectively (see note 6).
Warrants generally vest over a one to five year period and have been provided in
conjunction  with financing transactions, patent licenses and service contracts.
As  of December 31, 2000, the Company had 469,326 warrants outstanding, of which
358,076 are exercisable.  Warrant exercise prices range from $2.31 to $15.40 per
share.  During  1999 and 2000, 136,250 and 186,400 warrants, respectively,  were
exercised,  and  no  warrants were exercised in 1998.  The Company amortizes the
fair  values  of warrants associated with non-equity transactions, as determined
using  the  Black-Scholes  option  pricing  method,  to expense over the service
period  of  the  related  warrants.  The  Company  records  warrants  issued  in
connection  with  equity  transactions  in  additional  paid  in  capital,  as
determined  using  the  Black-Scholes  option  pricing  model.

8.     STOCKHOLDER  RIGHTS  PLAN

On  March 5, 1999, the Company's Board of Directors adopted a Stockholder Rights
Plan  ("Plan") in which preferred stock purchase rights will be distributed as a
dividend  at the rate of one Right for each share of Common Stock held as of the
close  of  business  on April 15, 1999.  Each Right will entitle Stockholders to
buy  one one-thousandth of a share of Series A Preferred Stock of the Company at
an  Exercise  Price  of  $25.  The  Rights are designed to guard against partial
tender  offers  and  other  coercive tactics that might be used in an attempt to
gain control of the Company or to deprive Stockholders of their interests in the
long-term value of the Company.  The Rights will be exercisable only if a person
or  group acquires 15% or more of the Company's Common Stock (subject to certain
exceptions  stated in the Plan) or announces a tender offer, the consummation of
which  would  result  in  ownership  by  a person or group of 15% or more of the
Company's  Common  Stock.  Each  Right  will  entitle  stockholders  to  buy one
one-thousandth  of a share of new series of junior participating preferred stock
at  an exercise price of $25 upon certain events.  If a person or group acquires
15%  or  more  of  the  Company's  outstanding  Common Stock (subject to certain
exceptions  stated  in  the  Plan),  or a holder of 15% or more of the Company's
Common  Stock  engages  in  certain  self-dealing  transactions  or  a  merger
transaction  in  which  the  Company is the surviving corporation and its Common
Stock  remains  outstanding, then each Right not owned by such person or certain
related parties will entitle its holder to purchase, at the Right's then-current
exercise  price, units of the Company's Series A Preferred Stock (or, in certain
circumstances,  Company  Common Stock, cash, property or other securities of the
Company)  having  a market value equal to twice the then-current exercise price.
In addition, if, after the Rights become exercisable, Endocare, Inc. is acquired
in  a  merger or other business combination transaction, or sells 50% or more of
its assets or earnings power, each Right will entitle its holder to purchase, at
the  Right's  then-current  price,  a  number  of the acquiring company's common
shares  having  a  market value at the time of twice the Right's exercise price.
At  any  time on or prior to the close of business on the first date of a public
announcement  that a person or group has acquired beneficial ownership of 15% or
more  of the Company's Common Stock (subject to certain exceptions stated in the
Plan),  the  Rights  are  redeemable for one cent per Right at the option of the
Board  of  Directors.  The  Rights  are  intended  to enable all stockholders to
realize the long-term value of their investment in the Company.  The Rights will
not  prevent  a takeover attempt, but should encourage anyone seeking to acquire
the  Company to negotiate with the Board prior to attempting to a takeover.  The
dividend  distribution  was  made  on  April 15, 1999 payable to stockholders of
record  on  that  date.  The  Rights  will  expire  on  April  15,  2009.

9.     INCOME  TAXES

Income tax expense, which  is included as an operating expense in the Company's
consolidated  statements  of  operations,  consisted  of:


<TABLE>
<CAPTION>

                               YEARS ENDED DECEMBER 31,
                               ------------------------
                                   1998   1999    2000
                                  -----  ------  ------
<S>                              <C>     <C>     <C>
    Current:   Federal . . . .   $   --  $   --  $   --
               State and local    3,400   3,600   1,600
    Deferred:  Federal . . . .       --      --      --
               State and local       --      --      --
                                 ------  ------  ------
                   Total . .     $3,400  $3,600  $1,600
                                 ======  ======  ======
</TABLE>

The  following  table  summarizes the tax effects of temporary differences which
give  rise  to  significant  portions of the deferred tax assets at December 31:

<TABLE>
<CAPTION>

                                            1999           2000
                                        -------------  -------------
<S>                                     <C>            <C>
    Deferred tax assets:
      Product and other reserves
         established for book purposes  $     42,000   $    440,000
      Property and equipment reserve .        96,000        112,000
      Inventory obsolescence reserve .        52,000        119,000
      Accounts receivable reserve. . .       107,000        172,000
      Recognition of deferred revenue.        15,000             --
      Net operating loss carryforwards     7,373,000     11,172,000
      Other. . . . . . . . . . . . . .       267,000        716,000
                                        -------------  -------------
          Gross deferred tax assets. .     7,952,000     12,731,000
      Valuation allowance. . . . . . .   ( 7,952,000)   (12,731,000)
                                        -------------  -------------
          Net deferred tax assets. . .  $         --   $         --
                                        =============  =============
</TABLE>


The  valuation allowance increased by $3,812,000 and $4,779,000 during the years
ended December 31, 1999 and 2000, respectively.  The Company has recognized that
it  is  not  more likely than not that future tax benefits will be realized as a
result  of  future and current income.  Accordingly, the valuation allowance has
been  increased  to  fully  reserve  the  deferred  tax  assets.

Actual  income  tax  expense  differs from amounts computed by applying the U.S.
federal  income  tax  rate  of  34% to pretax loss as a result of the following:


<TABLE>
<CAPTION>

                                                       YEARS ENDED DECEMBER 31,
                                                       ------------------------
                                                   1998          1999          2000
                                               ------------  ------------  ------------
<S>                                            <C>           <C>           <C>
    Computed expected tax benefit . . . . . .  $(1,644,000)  $(3,150,000)  $(4,216,000)
    State income taxes net of federal benefit     (282,000)     (541,000)     (506,000)
    Nondeductible expenses. . . . . . . . . .       13,000        19,400        38,000
    Change in valuation allowance . . . . . .    1,992,000     3,812,000     4,779,000
    Provision to return adjustment. . . . . .           --      (114,000)        3,000
    Other . . . . . . . . . . . . . . . . . .      (75,600)      (22,800)      (96,400)
                                               ------------  ------------  ------------
                Actual tax expense. . . . . .  $     3,400   $     3,600   $     1,600
                                               ============  ============  ============
</TABLE>



As  of  December  31, 2000, the Company has net operating loss carryforwards for
federal  income tax purposes of approximately $29,219,000 which are available to
offset  future  federal taxable income, if any, through the year 2020. For state
income  tax  purposes,  the  Company  has  net operating losses of approximately
$16,795,000  which  are available to offset future state taxable income, if any,
through  the  year  2005.

In  accordance with Internal Revenue Code Section 382, the annual utilization of
net  operating  loss  carryforwards  and  credits  existing prior to a change in
control  may  be  limited.  No  such  changes  in  control occurred during 2000.

10.     COLLABORATIVE  AGREEMENTS

Boston  Scientific:  In  March 1999, Endocare exercised its right, at no cost to
the Company, to terminate a distribution agreement with Boston Scientific, which
was  originally  entered  into  in  November 1996. This agreement granted Boston
Scientific  exclusive  worldwide marketing rights for Endocare's Cryocare System
for  urology  and  a  purchase  right  on  the  technology.  Under  the original
distribution  agreement,  Boston  Scientific guaranteed Endocare certain minimum
purchases  of  Cryocare  Systems  over  a  five -year period, subject to certain
conditions  and  renegotiations. In addition, Boston Scientific committed to pay
Endocare  four  payments  of $250,000 each, based upon meeting certain specified
milestones.  The  first  milestone  payment,  based  upon  contract signing, was
received  in  November 1996, and revenue was recognized in the fourth quarter of
1996.  Due  to  continuing obligations of the Company to Boston Scientific, cash
related  to  the  second milestone of $250,000 was received in December 1996 and
was  being  recognized  as  earned.  The  remaining obligations relating to this
second  milestone  were  fulfilled in 1998 and the remaining deferred revenue of
$166,672  recognized.  In  1998, Boston Scientific paid additional nonrefundable
licensing  payments  of  $475,000  to  Endocare.

Sanarus  Medical,  Inc.:  In  October 1999, the Company entered into a strategic
alliance  with  Sanarus  Medical,  Inc.  ("Sanarus") to commercialize Endocare's
proprietary  cryosurgical  technology  in  the  treatment  of  breast tumors and
gynecological  diseases.  The terms of the related agreements included an equity
investment  by  Endocare  in Sanarus totaling $300,000 and a warrant received by
Endocare  to  acquire  at that time approximately 57% of Sanarus common stock in
consideration  for  entering  into a manufacturing supply and license agreement.
In the event Endocare were to exercise the warrant, the Company would then own a
majority  equity position in Sanarus.  As of December 31, 2000, the Company owns
less  than  5%  of  the  outstanding  shares  in  Sanarus  and the investment is
reflected  at  cost,  which  approximates fair market value, as it does not have
significant  influence  over  the  operations  of  Sanarus.  The  investment  is
included  in  other assets in the accompanying consolidated balance sheets as of
December  31,  1999  and  2000.

11.     COMMITMENTS  AND  CONTINGENCIES

Commitments

In  February 1997, the Company signed a five-year lease for a 16,100 square foot
facility in Irvine, California. Rent expense on this lease was $153,860 in 1998,
$157,727  in  1999  and  $161,754  in  2000.  Future minimum commitments on this
operating  lease  are   $165,460  in  2001,  and  $34,639  in  2001.

The Company also leases other space and various office equipment under operating
leases, with lease commitments through 2003 totaling $17,686 in  2001, $6,809 in
2002,  and  $6,809  in  2003.

As  of  December  31,  2000,  the  Company has no other facility leases, capital
leases,  or  other  long-term  commitments.


Contingencies

In  March  2000,  the  Company  filed  patent  infringement  lawsuits  against
Israeli-based  Galil  Medical,  Ltd., and its U.S. affiliate, Galil Medical USA,
Inc. (collectively, "Galil").  The suit against Galil filed in the U.S. District
Court  for  the  Central District of California ("District Court"), alleges that
Galil  has  marketed  and  sold  cryosurgical  systems  that infringe Endocare's
patented  combination  of  cryocooling,  ultrasound  and  temperature monitoring
technology.  Endocare's  suit seek damages and injunctive relief with respect to
products  and  procedures  which  are  found  to infringe Endocare's proprietary
technology.  In  August  2000,  Galil  submitted counterclaims alleging that the
Company's  cryosurgical  probes  infringe  Galil's  probe  patents.  Galil seeks
unspecified  damages  and  injunctive  relief  with  respect  to  the  Company's
cryosurgical  system.  The  Company  believes  it has adequate defenses to these
claims  and  intends  to  defend  the  litigation  vigorously if necessary.  All
proceedings in the action were stayed by the District Court on December 13, 2000
pending  the  outcome of the settlement discussions by the parties.  The parties
are currently engaged in settlement discussions.  Management does not expect any
material adverse effect on the Company's consolidated financial condition or the
results  of  operations  because  of  such  actions.

In  March  2000,  the  Company  filed  a similar suit to the one discussed above
against  Cryomedical  Sciences,  Inc.  ("CMSI").  In  December 2000, the parties
reached  a  settlement  in  this  action.  In  the  settlement  agreement,  CMSI
stipulated  for  purposes  of  the agreement that the Company's patent combining
cryo-cooling,  ultrasound  and  temperature  monitoring  technology is valid and
enforceable.  On  December  20,  2000,  as  part of the settlement, the District
Court  signed  a  Consent  Judgment validating the settlement agreement in which
CMSI stipulated for purposes of the agreement that the Endocare patent combining
cryo-cooling,  ultrasound  and  temperature  monitoring  technology is valid and
enforceable.  The  settlement  resulted  in  certain cross-licensing agreements.

The Company, in the normal course of business, is subject to various other legal
matters.   While  the  results of litigation and claims cannot be predicted with
certainty, the Company believes that the final outcome of these matters will not
have  a  material  adverse  effect  on  the  Company's  consolidated  results of
operations  or  financial  condition.

From  time  to  time,  the  Company  has  received other correspondence alleging
infringement  of proprietary rights of third parties.  No assurance can be given
that  any  relevant  claims  of  third  parties would not be upheld as valid and
enforceable,  and  therefore that the Company could be prevented from practicing
the  subject  matter  claimed  or  would be required to obtain licenses from the
owners  of  any  such proprietary rights to avoid infringement.  Management does
not  expect  any material adverse effect on the consolidated financial condition
or  the  results  of  operations  because  of  such  actions.

12.     MAJOR  CUSTOMERS  AND  CONCENTRATION  OF  CREDIT  RISK

The Company currently operates in one industry segment - the design, manufacture
and  marketing  of  surgical  devices  and  related procedures to treat prostate
diseases. The Company markets and sells its devices worldwide to distributors of
medical  devices  and  directly  to  hospitals  and  other  medical professional
organizations.  Until  the  Company  exercised  its  right  to  terminate  the
distribution  agreement  with Boston Scientific in March 1999 (see Note 10), the
Company's  Cryocare  System was distributed exclusively by Boston Scientific for
urological  applications.

Customer  credit  may  be  extended  based  upon  evaluation  of  the customer's
financial  condition.  The  Company  maintains  reserves  for credit losses, and
Company  management considers such reserves to be adequate based upon historical
experience.  International  shipments are billed and collected by the Company in
U.S.  dollars.

During the year ended December 31, 2000, no customer accounted for more that 10%
of  the  Company's  total  revenues.  As  of  December  31,  2000, two customers
accounted for approximately 29% of net accounts receivable.  The Company derived
16%  of its total revenues from foreign customers during the year ended December
31,  2000.  By  significant  geographic  area,  approximately 10%, 6% and 84% of
revenues  were  from  Asia,  other  foreign  countries  and  the  United States,
respectively.

During the year ended December 31, 1999, no customer accounted for more than 10%
of the Company's total revenues. As of December 31, 1999, one customer accounted
for  approximately  11%  of net accounts receivable.  The Company derived 12% of
its  total  revenues  from  foreign customers during the year ended December 31,
1999.  By  significant geographic area, approximately 9%, 3% and 88% of revenues
were  from  Asia,  other  foreign countries and the United States, respectively.

During  the year ended December 31, 1998, Boston Scientific accounted for 41% of
the  Company's  revenues.  As of December 31, 1998, four customers accounted for
approximately  98%  of  net  accounts receivable.  The Company derived 8% of its
total  revenues  from foreign customers during the year ended December 31, 1998.

13.     RELATED  PARTY  TRANSACTIONS

Relationship  with  AMP

The  Company  originally had a $135,000 note payable from AMP (see Note 3).  The
loan  bore  interest  at  prime  plus  1% and was originally repayable beginning
September  30, 2000 in equal monthly installments of principal and interest over
a  twelve month period.  The loan was secured by the assets of AMP and Robert F.
Byrnes,  a  former  member of AMP and a member of Endocare's Board of Directors.
In  June 1999, Endocare acquired all of the outstanding units of interest in AMP
in  exchange  for  260,000  shares of common stock.  Mr. Byrnes received 102,413
shares  of  common  stock  for  his  ownership  interest  in  AMP.

Loan  to  Officers

In  November  1999,  the  Company  received  a full recourse promissory note for
$1,028,125  in connection with the sale of 175,000 shares of its common stock to
Jerry  W.  Anderson,  the  Company's Senior Vice President, Sales and Marketing.
The  note bears interest at 5.99% per annum, payable annually, and the principal
is  payable  in  September 2003.  The stock was sold at the fair market value of
the  common stock on the date of sale.  As of December 31, 1999, the Company had
loans  and  related  accrued  interest  due from various other officers totaling
$93,725,  which  was  included  in  other  assets  in  the  accompanying  1999
consolidated  balance  sheet.  The  loans  accrued  interest  at  5.41%  and all
interest  and  principal  were  forgiven  and  recorded  as  compensation to the
officers  in  2000.

14.SUBSEQUENT  EVENTS

In  February  2001, $1,000,000 of the convertible debentures were converted into
148,418  shares  of  common  stock at a conversion price of $6.75.  In addition,
accrued  interest  related to these debentures of $6,482 was also converted into
482  additional  shares  of  common  stock  at  an  average of $13.45 per share.

<PAGE>


14.     QUARTERLY  RESULTS  OF  OPERATIONS  (UNAUDITED)

<TABLE>
<CAPTION>

                             TOTAL                    NET  LOSS
                            REVENUE      NET LOSS     PER SHARE
                           ----------  ------------  -----------
<S>                        <C>         <C>           <C>
    Quarter Ended:
       December 31, 2000.  $2,034,828  $(3,181,412)  $    (0.23)
       September 30, 2000   1,759,878   (2,852,654)       (0.22)
       June 30, 2000. . .   1,565,213   (3,351,393)       (0.27)
       March 31, 2000 . .   1,311,030   (3,013,668)       (0.27)

       December 31, 1999.  $1,169,023  $(2,332,833)  $    (0.21)
       September 30, 1999   1,029,220   (2,510,629)       (0.23)
       June 30, 1999. . .     606,510   (2,577,036)       (0.24)
       March 31, 1999 . .     657,121   (1,843,677)       (0.17)

       December 31, 1998.  $  601,788  $(1,463,302)  $    (0.14)
       September 30, 1998     538,666   (1,191,229)       (0.11)
       June 30, 1998. . .     821,306   (1,221,940)       (0.12)
       March 31, 1998 . .     533,090   (1,048,093)       (0.12)
</TABLE>

<PAGE>


                          ENDOCARE, INC. AND SUBSIDIARY
                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>


                                    ALLOWANCE  FOR
                                DOUBTFUL  RECEIVABLES
                                   AND SALES RETURNS
                                  -------------------
<S>                               <C>
    Balance at December 31, 1997             192,000
       Charges to operations . .              34,736
       Deductions. . . . . . . .            (140,736)
       Other . . . . . . . . . .                  --
                                  -------------------
    Balance at December 31, 1998              86,000
       Charges to operations . .             254,238
       Deductions. . . . . . . .             (70,238)
       Other . . . . . . . . . .                  --
                                  -------------------
    Balance at December 31, 1999             270,000
       Charges to operations . .             379,885
       Deductions. . . . . . . .            (243,246)
       Other . . . . . . . . . .                  --
                                  -------------------
    Balance at December 31, 2000  $          406,639
                                  ===================
</TABLE>


ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL DISCLOSURE

     Not applicable.

                                    PART III

ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT  *

ITEM  11.  EXECUTIVE  COMPENSATION  *

ITEM  12.  SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT *

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS  *

_  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _  _

     *The information called for by items 10, 11, 12 and 13 is omitted from this
Report  and is incorporated by reference to the definitive Proxy Statement to be
filed  by  us  no  later than 120 days after December 31, 2000, the close of our
fiscal  year,  for  the annual meeting of our stockholders to be held on May 22,
2001.


                                     PART IV

ITEM 14.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES,  AND  REPORTS ON FORM 8-K

(a)    DOCUMENTS  FILED  AS  A  PART  OF  THIS  REPORT

(1)    Index  to  Financial  Statements

       Independent  Auditors'  Report

       Consolidated  Statements  of  Operations  for  the  years  ended
       December  31,  1998,  1999  and  2000

       Consolidated  Balance  Sheets  at  December  31,  1999  and  2000

       Consolidated  Statements  of  Shareholders'  Equity  (Deficiency)
       for  the  years  ended  December  31,  1998,  1999  and  2000

       Consolidated  Statements  of  Cash  Flows  for  the  years  ended
       December  31,  1998,  1999  and  2000

       Notes  to  Consolidated  Financial  Statements

(2)    Financial  Statement  Schedule
       Schedule  II--Valuation  and  Qualifying  Accounts  for the years ended
       December  31,  1998,  1999  and  2000

(All other schedules are omitted because they are not applicable or the required
information  is  included  in  the  financial  statements  or  notes  thereto.)

(3)    Exhibits

2.1    Distribution  Agreement  between  the  Registrant  and  Medstone
       International,  Inc.,  dated  October  31,  1995(1)

3.1    Certificate  of  Incorporation  of  the  Company(2)

3.2    Amended  and  Restated  Bylaws  of  the  Company(3)

4.1    Specimen  Certificate  of  the  Company's  Common  Stock(4)

10.1   Form  of  Indemnification  Agreement(2)

10.2   1995  Stock  Plan(1)

10.3   1995  Director  Option  Plan(1)

10.4   Patent  License  Agreement  between  the Company and  Brigham and Women's
       Hospital,  Inc.,  dated  April  17,  1996(5)

10.5   Form  of  Warrant  to purchase an aggregate of 150,000 shares  of  common
       stock,  dated  August  26,  1996(6)

10.6   Common  Stock  Purchase  Agreement  by  and  among  the Company  and  the
       persons listed  on the Schedule of Investors attached thereto as Exhibit
        A, dated January  21,  1997(7)

10.7   Facility  Lease  dated  January  31,  1997  for  7  Studebaker(8)

10.8   Common  Stock  Purchase  Agreements  by  and  among the  Company  and the
       persons  indicated  therein,  dated  April  15  and  April  11,  1998(3)

10.9   Rights  Agreement,  dated as of March 31, 1999, between the  Company  and
       U.S. Stock Transfer Corporation, which  includes the form  of Certificate
       Of Designation  for the Series A Junior Participating Preferred Stock as
       Exhibit A, the form of Rights Certificate as  Exhibit  B  and the Summary
       of  Rights  to Purchase  Series A Preferred Shares as Exhibit C (filed as
       Exhibit 4 to Form 8-K filed  on  June  3,  1999)  (9)

10.10  Debenture  dated  June  7,  1999  between  the  Company and Brown Simpson
       Strategic  Growth  Fund,  Ltd. (filed as Exhibit 4.1 to Form 8-K filed on
       June 14, 1999)  (10)

10.11  Debenture  dated  June  7,  1999 between  the  Company  and Brown Simpson
       Strategic  Growth  Fund, L.P. (filed as Exhibit 4.2  to Form 8-K filed on
       June 14, 1999)  (10)

10.12  Securities  Purchase  Agreement  dated June 7, 1999 among the Company and
       the  Purchasers .(filed  as  Exhibit 10.1  to  Form 8-K filed on June 14,
       1999) (10)

10.13  Registration  Rights  Agreement  dated June 7, 1999 among the Company and
       the  Purchasers. (filed  as  Exhibit 10.2  to  Form 8-K filed on June 14,
       1999) (10)

10.14  Debenture  dated  July  29, 1999  between  the  Company and Brown Simpson
       Strategic  Growth  Fund, Ltd. (filed as Exhibit 4.1  to Form 8-K filed on
       August 6, 1999)  (11)

10.15  Debenture  dated  July 29, 1999  between  the  Company  and Brown Simpson
       Strategic  Growth Fund, L.P. (filed as Exhibit 4.2 to Form 8-K filed on
       August  6,  1999)  (11)

10.16  Securities Purchase Agreement dated July  29, 1999 among the Company  and
       the  Purchasers .(filed  as Exhibit 10.1  to  Form 8-K  filed  on  August
       6, 1999) (11)

10.17  Registration Rights Agreement dated July 29, 1999  among the Company  and
       the  Purchasers. (filed as  Exhibit 10.2  to  Form 8-K filed  on  August
       6, 1999) (11)

10.18  Loan and Security Agreement dated July  29, 1999 between the Company  and
       TBCC. (filed as Exhibit 10.3 to Form  8-K  filed on August 6, 1999)  (11)

10.19  Streamlined  Facility  Agreement  dated July 29, 1999 between the Company
       and TBCC (filed as Exhibit 10.3 to Form 8-K filed on August 6, 1999) (11)

10.20  Continuing  Guaranty  dated  July  29,  1999 by the AMP in favor of TBCC.
       (filed as Exhibit 10.3  to  Form  8-K  filed  on  August  6,  1999)  (11)

10.21  Security  Agreement  dated  July 29, 1999 between AMP and TBCC. (filed as
       Exhibit  10.3  to  Form  8-K  filed  on  August  6,  1999)  (11)

10.22  Debenture for  $3 million dated May 4, 2000 between the Company and Brown
       Simpson  Partners  I,  Ltd.  (12)

10.23  Debenture for  $5 million dated May 4, 2000 between the Company and Brown
       Simpson  Strategic  Partners  I,  Ltd.  (12)

10.24  Amendment  to  Loan  Agreement  dated  April 24, 2000 between the Company
       and  TBCC  (12)

10.25  Common  Stock Purchase Agreement dated November 22, 2000 by and among the
       Company  and  the  Investors  (13)

10.26  Form  of  Stock  Purchase  Warrant  dated  November  24,  2000  (13)

23.1   Consent  of  KPMG  LLP*

__________

(1)     Previously filed with the Company's Application for Registration on Form
10-SB under the Securities Exchange Act of 1934, filed on November 14, 1995, and
incorporated  herein by reference. Each such exhibit had the same exhibit number
in  that filing, except that the 1995 Stock Plan was exhibit number 10.6 and the
1995  Director  Option  Plan  was  exhibit  10.7.

(2)     Previously  filed  with  Amendment number 1 to Company's Application for
Registration  on Form 10-SB, filed on December 21, 1995, and incorporated herein
by  reference.

(3)     Previously  filed with the Company's current report on Form 8-K as filed
with  the Securities and Exchange Commission on April 23, 1998, and incorporated
herein  by  reference.

(4)     Previously  filed  with the Company's Annual Report on Form 10-K for the
year  ended  December  31,  1995,  and  incorporated  herein  by  reference.

(5)     Previously  filed  with  the  Company's  Current  Report on Form 8-K, as
amended, as filed with the Securities and Exchange Commission on April 26, 1996,
and  incorporated  herein  by  reference.

(6)     Previously  filed with the Company's Current Report on Form 8-K as filed
with  the  Securities  and  Exchange  Commission  on  September  10,  1996,  and
incorporated  herein  by  reference.

(7)     Previously  filed with the Company's Current Report on Form 8-K as filed
with  the  Securities  and  Exchange  Commission  on  January  31,  1997,  and
incorporated  herein  by  reference.

(8)     Previously  filed  with  the  Company's  Annual  Report  on  Form 10-K/A
(Amendment  No. 3) for the year ended December 31, 1996, and incorporated herein
by  reference.

(9)     Previously  filed with the Company's current report on Form 8-K as filed
with  the  Securities  and Exchange Commission on June 3, 1999, and incorporated
herein  by  reference.

(10)    Previously  filed with the Company's current report on Form 8-K as filed
with  the  Securities and Exchange Commission on June 14, 1999, and incorporated
herein  by  reference.

(11)    Previously  filed with the Company's current report on Form 8-K as filed
with  the Securities and Exchange Commission on August 6, 1999, and incorporated
herein  by  reference.

(12)    Previously  filed with the Company's current report on Form 8-K as filed
with  the  Securities  and Exchange Commission on May 11, 2000, and incorporated
herein  by  reference.

(13)    Previously  filed with the Company's current report on Form 8-K as filed
with  the  Securities  and  Exchange  Commission  on  December  15,  2000,  and
incorporated  herein  by  reference.

* Filed  herewith.

(b) REPORTS  ON  FORM  8-K

On  December  15,  2000,  the  Company  filed a Form 8-K with the Securities and
Exchange  Commission  dated November 22, 2000 reporting the sale of an aggregate
of  1,509,440 shares of its common stock at $13.25 per share and issued warrants
to  purchase  up  to  an  aggregate  of  188,680  shares at an exercise price of
$13.1925  per  share  for  an  aggregate  gross  proceeds  of $20,000,000 to the
Company.  The  Form 8-K also reported that the Company granted the investors the
right  to  purchase,  subject  to certain exceptions on restrictions, a pro rata
portion  of  any of the Company's capital stock which the Company may, from time
to  time,  propose  to  sell  and  issue.

<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.

                                             ENDOCARE,  INC.
                                             By: /s/ PAUL  W.  MIKUS
                                                     ---------------
                                                     Paul  W.  Mikus
                                                     Chief Executive Officer and
                                                     President

Dated:  March  30,  2001



     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  and  in  the  capacities  indicated  on  March  30,  2001.

         SIGNATURE                                   TITLE
         ---------                                   -----


/s/ PAUL W. MIKUS
-------------------
    Paul W. Mikus                      Chief Executive Officer, President,
                                            and Chairman of the Board


/s/ WILLIAM R. HUGHES
-----------------------
    William R. Hughes                        Senior Vice President and
                                              Chief Financial Officer
                                             (Principal Financial and
                                                 Accounting Officer)


/s/ PETER  F.  BERNARDONI
---------------------------
    Peter F. Bernardoni                                Director


/s/ ROBERT  F.  BYRNES
------------------------
    Robert F. Byrnes                                   Director


/s/ BENJAMIN  GERSON,  M.D.
-----------------------------
    Benjamin Gerson, M.D.                              Director


/s/ ALAN  L.  KAGANOV,  SC.D
------------------------------
    Alan L. Kaganov, Sc.D                              Director


/s/ MICHAEL  J.  STRAUSS,  M.D.
---------------------------------
    Michael J. Strauss, M.D.                           Director

<PAGE>




                                 ENDOCARE, INC.
                                INDEX TO EXHIBITS

2.1    Distribution  Agreement  between  the  Registrant  and  Medstone
       International,  Inc.,  dated  October  31,  1995(1)

3.1    Certificate  of  Incorporation  of  the  Company(2)

3.2    Amended  and  Restated  Bylaws  of  the  Company(3)

4.1    Specimen  Certificate  of  the  Company's  Common  Stock(4)

10.1   Form  of  Indemnification  Agreement(2)

10.2   1995  Stock  Plan(1)

10.3   1995  Director  Option  Plan(1)

10.4   Patent  License  Agreement  between  the  Company and Brigham and Women's
       Hospital,  Inc.,  dated  April  17,  1996(5)

10.5   Form  of  Warrant  to purchase  an aggregate  of 150,000 shares of common
       stock,  dated  August  26,  1996(6)

10.6   Common  Stock  Purchase  Agreement  by  and  among  the  Company  and the
       persons  listed  on the Schedule of Investors attached thereto as Exhibit
       A, dated January  21,  1997(7)

10.7   Facility  Lease  dated  January  31,  1997  for  7  Studebaker(8)

10.8   Common  Stock  Purchase  Agreements  by  and  among  the  Company and the
       persons  indicated  therein,  dated  April  15  and  April  11,  1998(3)

10.9   Rights  Agreement,  dated as  of  March 31, 1999, between the Company and
U.S.  Stock  Transfer  Corporation,  which  includes  the form of Certificate of
Designation  for the Series A Junior Participating Preferred Stock as Exhibit A,
the  form  of  Rights  Certificate  as  Exhibit  B  and the Summary of Rights to
Purchase  Series A Preferred Shares as Exhibit C (filed as Exhibit 4 to Form 8-K
filed  on  June  3,  1999)  (9)

10.10  Debenture  dated  June  7,  1999  between  the  Company and Brown Simpson
       Strategic  Growth Fund, Ltd. (filed  as Exhibit 4.1  to Form 8-K filed on
       June 14, 1999)  (10)

10.11  Debenture  dated  June  7,  1999  between  the  Company and Brown Simpson
       Strategic  Growth Fund, L.P. (filed  as Exhibit 4.2  to Form 8-K filed on
       June 14, 1999)  (10)

10.12  Securities  Purchase  Agreement  dated June 7, 1999 among the Company and
       the  Purchasers. (filed as  Exhibit 10.1  to  Form 8-K  filed on June 14,
       1999) (10)

10.13  Registration  Rights  Agreement  dated June 7, 1999 among the Company and
       the  Purchasers. (filed  as Exhibit 10.2  to  Form 8-K  filed on June 14,
       1999) (10)

10.14  Debenture  dated  July  29, 1999 between  the  Company  and Brown Simpson
       Strategic  Growth  Fund, Ltd. (filed as  Exhibit 4.1 to Form 8-K filed on
       August 6, 1999)  (11)

10.15  Debenture  dated  July  29, 1999 between  the  Company  and Brown Simpson
       Strategic  Growth  Fund, L.P. (filed  as Exhibit 4.2 to Form 8-K filed on
       August 6, 1999)  (11)

10.16  Securities  Purchase  Agreement dated July 29, 1999 among the Company and
       the  Purchasers.(filed as  Exhibit 10.1  to Form 8-K  filed  on August 6,
       1999) (11)

10.17  Registration  Rights Agreement  dated July 29, 1999 among the Company and
       the  Purchasers. (filed  as Exhibit 10.2  to Form 8-K  filed on August 6,
       1999) (11)

10.18  Loan and  Security  Agreement dated July 29, 1999 between the Company and
       TBCC.(filed as Exhibit 10.3 to  Form  8-K  filed on  August 6, 1999) (11)

10.19  Streamlined  Facility  Agreement  dated July 29, 1999 between the Company
       and TBCC.(filed as Exhibit 10.3 to Form 8-K filed on August 6, 1999) (11)

10.20  Continuing  Guaranty  dated  July 29, 1999  by  the AMP in favor of TBCC.
       (filed  as  Exhibit  10.3  to  Form 8-K filed on August     6, 1999) (11)

10.21  Security  Agreement  dated July 29, 1999  between AMP and TBCC. (filed as
       Exhibit  10.3  to  Form  8-K  filed  on  August  6,  1999)  (11)

10.22  Debenture for  $3 million dated May 4, 2000 between the Company and Brown
       Simpson  Partners  I,  Ltd.  (12)

10.23  Debenture for  $5 million dated May 4, 2000 between the Company and Brown
       Simpson  Strategic  Partners  I,  Ltd.  (12)

10.24  Amendment  to  Loan Agreement  dated  April 24, 2000  between the Company
       and  TBCC  (12)

10.25  Common  Stock Purchase Agreement dated November 22, 2000 by and among the
       Company  and  the  Investors  (13)

10.26  Form  of  Stock  Purchase  Warrant  dated  November  24,  2000  (13)

23.1   Consent  of  KPMG  LLP*

__________

(1)    Previously filed with the Company's Application for Registration on Form
10-SB under the Securities Exchange Act of 1934, filed on November 14, 1995, and
incorporated  herein by reference. Each such exhibit had the same exhibit number
in  that filing, except that the 1995 Stock Plan was exhibit number 10.6 and the
1995 Director  Option  Plan  was  exhibit  10.7.

(2)    Previously  filed  with  Amendment number 1 to Company's  Application for
Registration on Form  10-SB, filed on December 21, 1995, and incorporated herein
by  reference.

(3)    Previously  filed with the Company's current report on Form 8-K as  filed
with  he Securities and  Exchange Commission on April 23, 1998, and incorporated
herein  by  reference.

(4)    Previously  filed  with the Company's Annual Report on Form  10-K for the
year  ended  December  31,  1995,  and  incorporated  herein  by  reference.

(5)    Previously  filed  with  the  Company's  Current  Report on Form  8-K, as
amended,  as  filed  with the  Securities and Exchange Commission  on  April 26,
1996, and  incorporated  herein  by  reference.

(6)    Previously  filed with the Company's Current Report on  Form 8-K as filed
with  he  Securities  and  Exchange  Commission  on  September  10,  1996,  and
incorporated  herein  by  reference.

(7)    Previously  filed with the Company's Current Report on  Form 8-K as filed
with  the  Securities  and  Exchange  Commission  on  January  31,  1997,  and
incorporated  herein  by  reference.

(8)    Previously  filed  with  the  Company's  Annual  Report  on  Form  10-K/A
(Amendment No. 3) for the year ended December 31, 1996, and incorporated  herein
by reference.

(9)    Previously  filed with the Company's current report on  Form 8-K as filed
with  the  Securities and Exchange Commission on June 3, 1999, and  incorporated
herein by reference (10)  Previously  filed  with  the Company's current  report
on  Form 8-K as filed with  the  Securities and Exchange Commission on  June 14,
1999, and incorporated herein  by  reference.

(11)   Previously filed with  the Company's current report on  Form 8-K as filed
with the Securities and Exchange Commission on August 6, 1999, and  incorporated
herein  by  reference.

(12)   Previously filed with  the Company's current report on  Form 8-K as filed
with the  Securities  and Exchange Commission on May 11, 2000, and  incorporated
herein by reference.

(13)   Previously filed with  the Company's current report on  Form 8-K as filed
with  the  Securities  and  Exchange  Commission  on  December  15,  2000,  and
incorporated  herein  by  reference.

*   Filed  herewith.

(b) REPORTS  ON  FORM  8-K

On  December  15,  2000,  the  Company  filed a Form 8-K with the Securities and
Exchange  Commission  dated November 22, 2000 reporting the sale of an aggregate
of  1,509,440 shares of its common stock at $13.25 per share and issued warrants
to  purchase  up  to  an  aggregate  of  188,680  shares at an exercise price of
$13.1925  per  share  for  an  aggregate  gross  proceeds  of $20,000,000 to the
Company.  The  Form 8-K also reported that the Company granted the investors the
right  to  purchase,  subject to certain exceptions and restrictions, a pro rata
portion  of  any of the Company's capital stock which the Company may, from time
to  time,  propose  to  sell  and  issue.

<PAGE>