UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


   JANUARY 31, 1997                                           0-11088
For the quarterly period ended                           Commission file number

                              ALFACELL CORPORATION
             (Exact name of registrant as specified in its charter)


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

               225 Belleville Avenue, Bloomfield, New Jersey 07003
                    (Address of principal executive offices)
                                 (201) 748-8082
                           (Issuer's telephone number)

                                 NOT APPLICABLE
             (Former name, former address, and former fiscal year,
                         if changed since last report)



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


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Common shares outstanding as of March 6, 1997:    14,577,543

Transitional small business disclosure format (check one):    Yes       No   X

<PAGE>

                              ALFACELL CORPORATION
                          (A Development Stage Company)

Part I.  Financial Information
Item 1.  Financial Statements

                                 BALANCE SHEETS
                       January 31, 1997 and July 31, 1996
<TABLE>
<CAPTION>

                                                                                January 31,              July 31,
                                                     ASSETS                         1997                   1996
                                                     ------                         -----                  ----
                                                                               (Unaudited)
Current assets:
<S>                                                                          <C>                 <C>            
         Cash and cash equivalents                                           $    8,546,686      $     8,131,442
         Loan receivable, related party                                               -                  112,250
         Prepaid expenses                                                           121,784               63,850
                                                                                    ----------       -----------
                  Total current assets                                            8,668,470            8,307,542
                                                                                  ----------           ---------

Property and equipment, net of accumulated depreciation and amortization
of $707,001 at January 31, 1997 and $688,325 at July 31, 1996                        244,439             127,930
                                                                                     --------           -------

Other assets:
         Deferred debt costs, net                                                     10,959              20,362
         Other                                                                        22,462              31,877
                                                                                      ------              ------
                  Total other assets                                                  33,421              52,239
                                                                                     -------             -------
                  Total assets                                                   $ 8,946,330         $ 8,487,711


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
         Current portion of long-term debt                                   $     1,419,573        $     86,936
         Accounts payable                                                            239,068             189,536
         Accrued expenses                                                             51,632             162,213
                                                                                     -------            -------
                  Total current liabilities                                        1,710,273             438,685

Long-term debt, less current portion                                                  20,049           1,398,760
                                                                                  ------------        ---------

                  Total liabilities                                                1,730,322           1,837,445
                                                                                   ---------          ---------

Commitments and contingencies

Stockholders'  equity:
         Preferred stock, $.001 par value.
                  Authorized and unissued, 1,000,000 shares
                  at January 31, 1997 and July 31, 1996                                -                   -
         Common stock, $.001 par value.
                  Authorized  25,000,000  shares  January 31,  1997;  Issued and
                  outstanding 14,577,843 shares at January 31,
                  1997 and 13,859,209 shares at July 31, 1996                        14,577              13,859
         Capital in excess of par value                                          49,674,886          47,023,529
         Common stock to be issued, 89,634 shares at July 31, 1996                     -                258,335
         Subscription receivable, 89,634 shares at July 31, 1996                                       (254,185)
         Deficit accumulated during development stage                           (42,473,455)        (40,391,272)
                                                                                ------------        ------------
                  Total stockholders'  equity                                     7,216,008           6,650,266
                                                                                  ---------           ---------

                  Total liabilities and stockholders'  equity                $    8,946,330         $ 8,487,711

</TABLE>

See accompanying notes to financial statements.

                                      - 2 -

<PAGE>


                              ALFACELL CORPORATION
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS

                        Three months and six months ended
                        January 31, 1997 and 1996 and the
                           Period from August 24, 1981
                     (Date of Inception) to January 31, 1997

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                                    August 24, 1981
                                                                                                                       (Date of
                                                     Three Months Ended                Six Months Ended               Inception)
                                                         January 31,                    January 31,                   To
                                                 1997                1996          1997                1996       January 31, 1997
                                                 ----                 ---           ----               -----      ----------------
REVENUE:
<S>                                      <C>                    <C>            <C>             <C>                       <C>    
   Sales                                 $        -             $     -        $     -         $        -                553,489
     Investment income                         117,065              40,050         229,048           74,480              614,302
     Other income                                 -                   -              -                  -                 60,103


   TOTAL REVENUE                               117,065              40,050         229,048           74,480            1,227,894
                                               --------             ------         -------          ---------        -------------

COSTS AND EXPENSES:
     Cost of sales                                -                   -              -                  -                336,495
     Research and development                  842,868             577,276       1,693,761        1,021,000           24,253,151
     General and administrative                288,677             258,119         554,427          424,489           16,260,209
     Interest:
                  Related parties                 -                    603           -                1,756            1,033,960
                  Others                        31,249              35,121          63,043           65,312            1,817,534
                                               ------               ------          ------           -------           ---------
     TOTAL COSTS AND EXPENSES                1,162,794             871,119       2,311,231        1,512,557           43,701,349
                                            ---------            ----------      ------------     ---------           ----------

NET LOSS                                 $  (1,045,729)         $ (831,069)  $  (2,082,183)     $(1,438,077) $       (42,473,455)
                                            -------------     --------------   --------------   ------------          -----------

Loss per common share                 $         ( .07)        $       (.07)  $        (.14)  $       (.12)       $         (6.98)
                                            ----------           ----------      ----------      ---------          ---------------

Weighted average number of shares
outstanding                                14,567,821           11,662,304      14,444,346      11,497,130             6,081,180
                                           --------------       ----------      ------------    ----------             ------------

</TABLE>


See accompanying notes to financial statements.
               

                                      - 3 -

<PAGE>


                              ALFACELL CORPORATION
                          (A Development Stage Company)


                            STATEMENTS OF CASH FLOWS

                        Six months ended January 31, 1997
                          and 1996 and the Period from
                                 August 24, 1981
                     (Date of Inception) to January 31, 1997

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                       Six Months Ended                 August 24, 1981
                                                                          January 31,                 (Date of inception)
                                                                        1997             1996           January 31, 1997
                                                                        ----             ----           ----------------

Cash flows from operating activities:
<S>                                                            <C>               <C>                       <C>         
   Net Loss                                                    $   (2,082,183)   (1,438,077)               (42,473,455)
   Adjustments to reconcile net loss to net cash
       used in operating activities:
    Gain on sale of marketable securities                                 -            -                       (25,963)
    Depreciation and amortization                                      29,517        45,150                  1,076,746
    Loss on disposal of property and equipment                            -           -                         18,926
    Noncash operating expenses                                         27,900        15,997                  4,915,861
    Amortization of deferred compensation                                 -           -                     11,442,000
    Amortization of organization costs                                    -           -                          4,590
Changes in assets and liabilities:
    Decrease in loan receivable, related party                         112,250        -                        -
    (Increase) decrease in prepaid expenses                            (57,934)     18,418                    (121,784)
    (Increase) decrease in other assets                                  9,415      (9,718)                     13,722
    Increase (decrease) in interest payable, related party                  -       (93,150)                   744,539
    Increase in accounts payable                                        49,532      110,209                    316,333
    Increase (decrease) in accrued payroll and expenses,
      related parties                                                       -       (72,880)                 2,348,145
    Increase (decrease) in accrued expenses                           (110,581)     (21,601)                   593,145
                                                                        ---------   --------                   --------
            Net cash used in operating activities                   (2,022,084)  (1,445,652)               (21,147,195)
                                                                    -----------  -----------               ------------
Cash flows from investing activities:
    Purchase of marketable securities                                      -            -                      (290,420)
    Proceeds from sale of marketable equity securities                     -            -                       316,383
    Purchase of property and equipment                                (136,623)      (5,169)                 (1,178,503)
    Patent costs                                                           -            -                       (97,841)
            Net cash used in investing activities                     (136,623)      (5,169)                 (1,250,381)
                                                                      ---------      -------                -----------



</TABLE>

See accompanying notes to financial statements.
                                                                    (continued)


                                      - 4 -

<PAGE>

                              ALFACELL CORPORATION
                          (A Development Stage Company)


                      STATEMENTS OF CASH FLOWS (continued)

                        Six months ended January 31, 1997
                          and 1996 and the Period from
                                 August 24, 1981
                     (Date of Inception) to January 31, 1997

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                       Six Months Ended                 August 24, 1981
                                                                            January 31,                (Date of inception)
                                                                        1997             1996            January 31, 1997
                                                                        ----             ----            ----------------
Cash flows from financing activities:
<S>                                                            <C>      <C>          <C>                   <C>    
    Proceeds from short-term borrowings                        $           -               -                   849,500
    Payment of short-term borrowings                                       -               -                  (623,500)
    Increase in loans payable - related party, net                         -               -                 2,628,868
    Proceeds from bank debt and other long-term debt,
      net of deferred debt costs                                        4,200              -                 2,410,883
    Reduction of bank debt and long-term debt                         (50,274)          (99,388)            (1,485,833)
    Proceeds from common stock to be issued                                -               -                   433,358
    Proceeds from issuance of common stock
      and warrants, net                                                    -          2,727,519             21,678,561
    Proceeds from exercise of stock options and
       warrants, net                                                 2,620,025           36,560              4,705,425
    Proceeds from issuance of convertible debentures                       -               -                   347,000
                                                                      ---------         ----------            ----------
            Net cash provided by financing activities                2,573,951        2,664,691             30,944,262
                                                                   -----------         -----------           -----------
            Net increase in cash                                       415,244        1,213,870              8,546,686
Cash and cash equivalents at beginning of period                     8,131,442        1,398,027                   -
                                                                     ---------        ---------               ---------
Cash and cash equivalents at end of period                     $     8,546,686        2,611,897              8,546,686
                                                                     ---------        ---------              ---------
Supplemental disclosure of cash flow information -
    interest paid                                              $        74,790           64,890              1,564,518
Noncash financing activities:
    Issuance of convertible subordinated debenture for
      loan payable to officer                                  $         -                -                  2,725,000
                                                                  -----------         -----------           -----------    
    Issuance of common stock upon the conversion of         
      convertible subordinated debentures, related party       $         -                -                  2,945,000   
                                                                  -----------         -----------           -----------   
    Conversion of short-term borrowings to common stock        $         -                 -                   226,000  
                                                                  -----------         -----------           ----------- 
    Conversion of accrued interest, payroll and expenses          
      by related parties to stock options                      $          -                -                 3,194,969 
                                                                  -----------         -----------           ----------- 
    Repurchase of stock options from related party             $          -                -                  (198,417)    
                                                                  -----------         -----------           -----------   
    Conversion of accrued interest to stock options            $          -                -                   142,441   
                                                                  -----------         -----------           -----------   
    Conversion of accounts payable to common stock             $          -                -                    77,265    
                                                                  -----------         -----------           -----------   
    Conversion of notes payable, bank and accrued
      interest to long-term debt                               $          -                -                 1,699,072    
                                                                  -----------         -----------           -----------   
    Conversion of loans and interest payable, 
     related party and accrued payroll and expenses, 
     related parties to long-term accrued payroll and other,
     related party                                            $           -                -                 1,863,514 
                                                                 -----------         -----------           -----------  
    Issuance of common stock upon the conversion of              
     convertible subordinated debentures, other               $          -                -                    127,000  
                                                                  -----------         -----------           -----------   
                                                                                                               
</TABLE>
                                                                 
See accompanying notes to financial statements.


                                      - 5 -

<PAGE>

                              ALFACELL CORPORATION
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                   (Unaudited)

  1. ORGANIZATION AND BASIS OF PRESENTATION
  -----------------------------------------

        In the  opinion of  management,  the  accompanying  unaudited  financial
     statements   contain  all  adjustments   (consisting  of  normal  recurring
     accruals)  necessary to present fairly the Company's  financial position as
     of January 31, 1997;  the results of  operations  for the six month periods
     ended January 31, 1997,  and 1996;  and the period August 24, 1981 (date of
     inception)  to January  31,  1997.  The results of  operations  for the six
     months ended January 31, 1997 are not necessarily indicative of the results
     to be expected for the full year.

        The Company is a  development  stage company as defined in the Financial
     Accounting  Standards Board's Statement of Financial  Accounting  Standards
     No. 7. The Company is devoting  substantially all of its present efforts to
     establishing  a new business.  Its planned  principal  operations  have not
     commenced  and,  accordingly,  no  significant  revenue  has  been  derived
     therefrom.

        Certain  reclassifications to the prior year financial  information were
     made to conform with the January 31, 1997 presentation.


 2. CAPITAL STOCK
 ----------------

        In August  1996,  a total of 387,300  stock  options  were  exercised by
     related parties,  resulting in net proceeds of approximately  $1,499,000 to
     the Company. The exercise price of the options was $3.87 per share.

          In August  1996,  the Company  issued  10,000  stock  options  with an
     exercise price of $4.69  exercisable for five years as payment for services
     rendered.  An equal  portion of these  options  vest  monthly  for one year
     commencing   September   1,  1996.   The  Company   recorded   general  and
     administrative  expense of $27,900  which was the fair value on the date of
     issuance.

        In September 1996,  213,700 stock options were exercised by both related
     and unrelated parties  resulting in net proceeds of approximately  $830,000
     to the  Company.  The exercise  prices of the options  ranged from $3.87 to
     $4.00 per share.

        On September 13, 1996, the Securities and Exchange  Commission  declared
     effective  a  registration  statement  for the  offer  and sale by  certain
     stockholders  of up to 2,042,506  shares of common stock.  Of these shares,
     (i) 1,722,646 were issued in several private placement  transactions during
     the period  October  1995 through  April 1996 and in the private  placement
     completed  in June 1996 (the "June 1996 Private  Placement"),  (ii) 313,800
     are issuable  upon  exercise of the warrants  which were issued in the June
     1996 Private Placement, and (iii) 6,060 were issued to one of the Company's
     raw material suppliers in connection with a supply agreement.

                                      - 6 -

<PAGE>
                              ALFACELL CORPORATION
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                   (Unaudited)


 2.  CAPITAL STOCK (continued)
 -----------------------------

        Also on  September  13, 1996,  the  Securities  and Exchange  Commission
     declared effective another registration statement for the offer and sale by
     certain  stockholders  of up to  3,767,787  shares of  common  stock of the
     Company.  Of these shares (i) an aggregate of 1,951,020  shares were issued
     to the private placement  investors in the private  placement  transactions
     which were  completed  during the period March 1994 through  September 1995
     (the "Earlier Private  Placements"),  (ii) an aggregate of 1,184,451 shares
     are issuable  upon the  exercise of the  warrants  which were issued to the
     private  placement  investors in the Earlier Private  Placements,  (iii) an
     aggregate  of  622,316  shares  may be issued,  or have been  issued,  upon
     exercise  of  options  which were  issued to the option  holders in certain
     other private  transactions,  and (iv) up to 10,000 shares may be issued to
     the  Company's  bank upon  exercise  of the  warrant  issued to the bank in
     connection  with an amendment to the Company's term loan agreement with its
     bank (the "Term Loan").

        In November and December  1996,  26,000 stock options and 2,000 warrants
     were  exercised  by both  related and  unrelated  parties  resulting in net
     proceeds of  approximately  $84,000 to the Company.  The exercise prices of
     the options  ranged from $2.45 to $3.12 per share and the exercise price of
     the warrants was $5.00 per share.

                                      - 7 -

<PAGE>

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


        Information contained herein contains "forward-looking statements" which
     can  be  identified  by the  use of  forward-looking  terminology  such  as
     "believes,"  "expects,"  "may," "will,"  "should" or  "anticipates"  or the
     negative thereof or other variations thereon or comparable terminology,  or
     by  discussions  of  strategy.  No  assurance  can be given that the future
     results covered by the forward-  looking  statements will be achieved.  The
     matters set forth in Exhibit 99.1 to the  Company's  Annual  Report on Form
     10-KSB  for  the  fiscal  year  ended  July  31,  1996,  which  Exhibit  is
     incorporated  herein  by  reference,   constitute  cautionary   statements,
     identifying   important  factors  with  respect  to  such   forward-looking
     statements,  including  certain risks and  uncertainties,  that could cause
     actual results to vary materially from the future results indicated in such
     forward-looking  statements.  Other factors could also cause actual results
     to vary  materially  from the future  results  indicated  in such  forward-
     looking statements.

       Results of Operations

       Three and six month periods ended January 31, 1997 and 1996

        Revenues.  The Company is a development  stage company as defined in the
     Financial  Accounting  Standards Board's Statement of Financial  Accounting
     Standards No. 7. As such, the Company is devoting  substantially all of its
     present efforts to establishing a new business and developing new products.
     The Company's planned principal operations of marketing and/or licensing of
     new drugs have not commenced and,  accordingly,  no significant revenue has
     been  derived  therefrom.   The  Company  continues  to  marshall  all  its
     productive  and  financial  resources  to proceed with its  development  of
     ONCONASE  and as such has not had any sales in the six month  period  ended
     January  31,  1997 and 1996.  Investment  income for the six  months  ended
     January 31, 1997  increased to  $229,000,  compared to $74,000 for the same
     period last year due to an increase in the amount of funds invested.

        Research and Development. Research and development expense for the three
     months  ended  January 31, 1997 was  $843,000  compared to $577,000 for the
     same period  last year,  an  increase  of  $266,000  or 46%.  Research  and
     development  expense  for  the  six  months  ended  January  31,  1997  was
     $1,694,000  compared  to  $1,021,000  for the same  period  last  year,  an
     increase of $673,000 or 66%.  These  increases were primarily due to hiring
     of additional laboratory personnel,  increases in costs associated with the
     purchase of raw materials for  anticipated  future  production of ONCONASE,
     manufacturing  clinical  supplies  of  ONCONASE  and  costs in  support  of
     on-going  clinical  trials,  including  the Phase III  clinical  trials for
     pancreatic   cancer  and  the  Phase  II  clinical   trial  for   malignant
     mesothelioma.

        General and Administrative.  General and administrative  expense for the
     three months ended  January 31, 1997 was $289,000  compared to $258,000 for
     the same  period  last year,  an  increase  of $31,000 or 12%.  General and
     administrative  expense  for the six  months  ended  January  31,  1997 was
     $554,000 compared to $424,000 for the same period last year, an increase of
     $130,000  or 31%.  These  increases  were  primarily  due to the  hiring of
     additional  personnel  including the Company's new president in August 1996
     and an  increase in public  relations  expenses  offset by a  reduction  in
     amortization expense on the Company's Term Loan costs.

                                      - 8 -

<PAGE>

        Interest.  Interest  expense for the three months ended January 31, 1997
     was $31,000  compared to $36,000 for the same period last year,  a decrease
     of $5,000 or 14%.  Interest  expense for the six months  ended  January 31,
     1997 was $63,000  compared  to $67,000  for the same  period  last year,  a
     decrease of $4,000 or 6%. These decreases were primarily due to a reduction
     in the  principal  balance of the  Company's  Term Loan  which was  amended
     effective as of October 31, 1995 and a reduction  in related and  unrelated
     party payables.

          Net Loss.  The Company has incurred net losses  during each year since
     its inception. The net loss for the three months ended January 31, 1997 was
     $1,046,000  compared to $831,000 for the same period last year, an increase
     of $215,000 or 26%. The net loss for the six months ended  January 31, 1997
     was  $2,082,000 as compared to $1,438,000 for the same period last year, an
     increase  of  $644,000  or  45%.  The  cumulative  loss  from  the  date of
     inception,  August 24, 1981 to January 31,  1997  amounted to  $42,473,000.
     Such losses are  attributable  to the fact that the Company is still in the
     development stage and accordingly has not derived sufficient  revenues from
     the operations to offset the development stage expenses.

       Liquidity and Capital Resources

        Alfacell has financed its operations since inception  primarily  through
     equity and debt financing and interest income.  During the six months ended
     January  31,  1997,  the  Company  had a net  increase  in  cash  and  cash
     equivalents of $415,000, which resulted from net cash provided by financing
     activities of $2,574,000,  primarily from the issuance of common stock upon
     the exercise of stock options during August through  December 1996,  offset
     by the purchase of property and  equipment of $137,000 and net cash used in
     operating activities of $2,022,000.

        The  Company's  Term Loan with its bank matures on August 31, 1997.  The
     entire principal amount outstanding on the Term Loan as of January 31, 1997
     was  reflected  as a current  liability.  This is the primary  reason for a
     significant increase in current liabilities as of January 31, 1997 compared
     to July 31, 1996 and a significant decrease in long-term debt as of January
     31,  1997  compared  to July  31,  1996.  The  Company  estimates  that the
     outstanding  balance on August 31, 1997 will be  $1,369,000.  At that time,
     the Company  intends to either  refinance the Term Loan, or use its current
     cash resources or raise  sufficient  equity to pay off the unpaid  balance.
     However,  there can be no assurance  that the Company will have  sufficient
     cash  resources  available  at that  time,  that  it will be able to  raise
     sufficient  equity  or that it will  be  able to  successfully  conclude  a
     refinancing.

        The Company's  continued  operations will depend on its ability to raise
     additional  funds  through  a  combination  of  equity  or debt  financing,
     collaborative  agreements,   strategic  alliances  and  revenues  from  the
     commercial  sale of ONCONASE.  The Company is in  discussions  with several
     potential  collaborative  partners for further development and marketing of
     ONCONASE;  however,  there can be no assurance  that any such  arrangements
     will be consummated.  In addition,  the Company expects that its cash needs
     in the future  will  increase  due to the  on-going  clinical  trials.  The
     Company  believes that its cash and cash equivalents as of January 31, 1997
     will be sufficient to meet its anticipated cash needs for approximately the
     next two years. To date, a significant  portion of the Company's  financing
     has been  through  private  placements  of common stock and  warrants,  the
     exercise of stock  options,  debt  financing and financing  provided by the
     Company's Chief Executive Officer.  The Company's  long-term liquidity will
     depend on its ability to raise substantial  additional funds.  There can be
     no assurance that such funds will be available to the Company on acceptable
     terms, if at all.
                                      - 9 -

<PAGE>

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

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

                                     - 10 -

<PAGE>

       PART II. OTHER INFORMATION
       --------------------------

       Item 2.   (c) Recent Sales of Unregistered Securities

     On December 4, 1996, 2,000 warrants received in connection with the Earlier
Private  Placements  were exercised to purchase  Common Stock,  for an aggregate
consideration  of $10,000.  This  transaction  was consummated as a private sale
pursuant to section 4 (2) of the Securities Act of 1933, as amended.

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

          (a) An annual meeting of stockholders was held on November 21, 1996.

          (b) The directors  elected at the annual meeting were Kuslima  Shogen,
     Michael C. Lowe,  Gail E. Fraser,  Robert R. Henry,  Stanislaw M. Mikulski,
     Allen Siegel and Alan Bell.

          (c) The  matters  voted upon at the annual  meeting and the results of
     the voting are set forth below.  Broker non-votes were not applicable.  All
     of such matters were approved by the stockholders.

               (i)  The  stockholders  voted  10,864,118  shares  in  favor  and
          withheld  58,200 shares with respect to the election of Kuslima Shogen
          as a director; 10,867,318 in favor and withheld 55,000 with respect to
          the election of Michael C. Lowe, as a director;  10,863,318  shares in
          favor and withheld  59,000 shares with respect to the election of Gail
          E.  Fraser as a  director;  10,867,318  shares  in favor and  withheld
          55,000  shares  with  respect to the  election of Robert R. Henry as a
          director;  10,867,118  shares in favor and withheld 55,200 shares with
          respect  to  the  election  of  Stanislaw   Mikulski  as  a  director;
          10,860,853  shares in favor and withheld 61,465 shares with respect to
          the election of Allen Siegel as a director;  and 10,861,553  shares in
          favor and withheld  60,765 shares with respect to the election of Alan
          Bell as a director;

               (ii) The stockholders voted 10,864,640 shares in favor and 41,964
          shares against a proposal to select KPMG Peat Marwick LLP to audit the
          Company's  financial  statements  for the fiscal  year ending July 31,
          1997. 15,714 shares abstained from voting on this proposal.

                                     - 11 -

<PAGE>

       Item 6.  Exhibits and Reports on Form 8-K

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

<TABLE>
<CAPTION>
                                                                         
                                                                          Exhibit No.
                                                                             or
Exhibit                                                                Incorporation
  No.                                         Item Title                by Reference
 ----                                         ----------                ------------
<S>      <C>                                                             <C>     
         3.1     Certificate of Incorporation                                *
         3.2     By-Laws                                                     *
         3.3     Amendment to Certificate of Incorporation                   #
         4.1     Form of Convertible Debenture                               **
        10.1     Form of Stock and Warrant Purchase Agreements used
                 in private placements completed April 1996 and June
                 1996                                                        ##
        10.2     Lease, as amended - 225 Belleville Avenue,
                 Bloomfield, New Jersey                                      **
        10.3     Amendment to Lease - 225 Belleville Avenue,
                 Bloomfield, New Jersey                                      #
        10.4     Term Loan Agreement dated as of May 31, 1993 by
                 and between the Company and First Fidelity Bank,
                 N.A., New Jersey                                            **
        10.5     Term Note dated as of May 31, 1993 issued by the
                 Company to First Fidelity Bank, N.A., New Jersey            **
        10.6     Patent Security Agreement dated as of May 31, 1993
                 by and between the Company and First Fidelity Bank,
                 N.A., New Jersey                                            **
        10.7     Security Agreement dated as of May 31, 1993 by and
                 between the Company and First Fidelity Bank, N.A.,
                 New Jersey                                                  **
        10.8     Subordination Agreement dated as of May 31, 1993 by
                 and among the Company, Kuslima Shogen, and First
                 Fidelity Bank, N.A., New Jersey                             **
        10.9     Amendment to Subordination Agreement dated as of
                 May 31, 1993 by and among the Company, Kuslima
                 Shogen, and First Fidelity Bank, N.A., New Jersey
                 dated June 30, 1995                                         #
        10.10    Form of Stock Purchase Agreement and Certificate
                 used in connection with various private placements         ***
        10.11    Form of Stock and Warrant Purchase Agreement and
                 Warrant Agreement used in Private Placement
                 completed on March 21, 1994                                ***
        10.12    The Company's 1993 Stock Option Plan and Form of
                 Option Agreement                                          *****
        10.13    Debt Conversion Agreement dated March 30, 1994
                 with Kuslima Shogen                                        ****
        10.14    Accrued Salary Conversion Agreement dated March
                 30, 1994 with Kuslima Shogen                               ****
        10.15    Accrued Salary Conversion Agreement dated March
                 30, 1994 with Stanislaw Mikulski                           ****
        10.16    Debt Conversion Agreement dated March 30, 1994
                 with John Schierloh                                        ****


                                     - 12 -

<PAGE>

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

        10.17    Option Agreement dated March 30, 1994 with Kuslima
                 Shogen                                                     ****
        10.18    Amendment No. 1 dated June 20, 1994 to Option
                 Agreement dated March 30, 1994 with Kuslima
                 Shogen                                                     ****
        10.19    Amendment No. 1 dated June 17, 1994 to Term Loan
                 Agreement dated May 31, 1993 between Kuslima
                 Shogen and First Fidelity Bank, N.A., New Jersey           ****
        10.20    Second Pledge Agreement dated June 17, 1994 by and
                 among the Company, Kuslima Shogen and First
                 Fidelity Bank, N.A., New Jersey                            ****
        10.21    Form of Amendment No. 1 dated June 20, 1994 to
                 Option Agreement dated March 30, 1994 with
                 Kuslima Shogen                                            *****
        10.22    Form of Amendment No. 1 dated June 20, 1994 to
                 Option Agreement dated March 30, 1994 with
                 Stanislaw Mikulski                                        *****
        10.23    Form of Stock and Warrant Purchase Agreement and
                 Warrant Agreement used in Private Placement
                 completed on September 13, 1994                             +
        10.24    Form of Subscription Agreements and Warrant
                 Agreement used in Private Placements closed in
                 October 1994 and September 1995.                            +
        10.25    Amendment No. 1 dated as of October 1, 1995 to
                 Term Loan  Agreement  dated as of May 31, 1993 by and
                 between the Company and First Fidelity Bank,
                 N.A. New Jersey                                             ~
        10.26    Amended and Restated Term Note dated as of October
                 1, 1995 issued by the Company to First Fidelity
                 Bank, N.A. New Jersey                                       ~
        10.27    Warrant dated as of October 1, 1995 issued by the
                 Company to First Fidelity Bank, N.A. New Jersey             ~
        27.1     Financial Data Schedule                                    ###


                                     - 13 -
<PAGE>

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

 99.1     Factors to Consider in Connection with Forward-  
          Looking Statements                                                                    +++
</TABLE>

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

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

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

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

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

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

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

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

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

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

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

###  Filed herewith.

     (b)     Reports on Form 8-K.

                  None.

                                   - 14 -

<PAGE>


                                   SIGNATURES


             Pursuant to the  requirements  of the  Securities  Exchange  Act of
     1934, the registrant has duly caused this report to be signed on its behalf
     by the undersigned thereunto duly authorized.



                                                            ALFACELL CORPORATION
                                                                    (Registrant)


     March  17, 1997                                          /s/ GAIL E. FRASER
     ----------------                                       -------------------
     Date                                                         Gail E. Fraser
                                                    Vice President, Finance and
                                              Chief Financial Officer (Principal
                                                Accounting Officer and Principal
                                                              Financial Officer)