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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

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

For the quarterly period ended April 30, 2002

Commission File Number 0-26670

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NORTH AMERICAN SCIENTIFIC, INC.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of incorporation or organization) |  | 51-0366422(I.R.S. Employer Identification No.)
|---------------------------------------------------------------------- |  | ----------------------------------------------

20200 Sunburst Street, Chatsworth, CA 91311(Address of principal executive offices)

(818) 734-8600(Registrant's telephone number, including area code)

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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.    ý    Yes o    No

The
number of shares of Registrant's Common Stock, $.01 par value, outstanding as of June 3, 2002 was 10,197,349 shares.

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NORTH AMERICAN SCIENTIFIC, INC.
Index

|                                                                                                 |  |                                                                                                  |  | Page
|------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------ |  | ----
|Part IFinancial Information                                                                     |  |                                                                                                 
|Item 1.    Financial Statements                                                                  |  |                                                                                                 
|                                                                                                 |  | Consolidated Balance Sheets as of April 30, 2002 and October 31, 2001                            |  | 3   
|                                                                                                 |  | Consolidated Statements of Operations for the three and six months ended April 30, 2002 and 2001 |  | 4   
|                                                                                                 |  | Consolidated Statements of Cash Flows for the six months ended April 30, 2002 and 2001           |  | 5   
|                                                                                                 |  | Condensed Notes to the Consolidated Financial Statements                                         |  | 6   
|Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 9                                                                                               
|Item 3.    Quantitative and Qualitative Disclosures about Market Risk                            |  | 14                                                                                              
|Part IIOther Information                                                                        |  |                                                                                                 
|Item 4.    Submissions of Matters to a Vote of Security Holders                                  |  | 14                                                                                              
|Item 6.    Exhibits and Reports on Form 8-K                                                      |  |                                                                                                 
|                                                                                                 |  | Exhibits and Reports on Form 8-K                                                                 |  | 14  

2

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NORTH AMERICAN SCIENTIFIC, INC.
Consolidated Balance Sheets

|                                          |                                                                                                                                                                             | April 30,
2002                             |           | October 31,
2001 |           
|----------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | ---------------- | ----------
|
|Assets                                    |                                                                                                                                                                             |                                            |           |                  |           
|Current assets                            |                                                                                                                                                                             |                                            |           |                  |           
|                                          | Cash and cash equivalents                                                                                                                                                   |                                            | $         | 2,618,000        |           
|                                          | Marketable securities                                                                                                                                                       |                                            |           | 52,123,000       |           
|                                          | Accounts receivable, net                                                                                                                                                    |                                            |           | 1,899,000        |           
|                                          | Inventories                                                                                                                                                                 |                                            |           | 732,000          |           
|                                          | Income taxes receivable                                                                                                                                                     |                                            |           |                 |           
|                                          | Deferred income taxes                                                                                                                                                       |                                            |           | 1,326,000        |           
|                                          | Prepaid expenses and other current assets                                                                                                                                   |                                            |           | 1,194,000        |           
|                                          |                                                                                                                                                                             |                                            |           |                  |           
|                                          |                                                                                                                                                                             | Total current assets                       |           |                  | 59,892,000
|Equipment and leasehold improvements, net |                                                                                                                                                                             |                                            | 3,101,000 |                  |           
|Goodwill                                  |                                                                                                                                                                             |                                            | 3,659,000 |                  |           
|Licenses and patents, net                 |                                                                                                                                                                             |                                            | 452,000   |                  |           
|Deferred income taxes                     |                                                                                                                                                                             |                                            | 876,000   |                  |           
|Other assets                              |                                                                                                                                                                             |                                            | 96,000    |                  |           
|                                          |                                                                                                                                                                             |                                            |           |                  |           
|                                          |                                                                                                                                                                             | Total assets                               |           | $                | 68,076,000
|                                          |                                                                                                                                                                             |                                            |           |                  |           
|Liabilities and Stockholders' Equity      |                                                                                                                                                                             |                                            |           |                  |           
|Current liabilities                       |                                                                                                                                                                             |                                            |           |                  |           
|                                          | Accounts payable                                                                                                                                                            |                                            | $         | 1,049,000        |           
|                                          | Accrued expenses                                                                                                                                                            |                                            |           | 1,829,000        |           
|                                          |                                                                                                                                                                             |                                            |           |                  |           
|                                          |                                                                                                                                                                             | Total current liabilities                  |           |                  | 2,878,000 
|                                          |                                                                                                                                                                             |                                            |           |                  |           
|Commitments and contingencies             |                                                                                                                                                                             |                                            |           |                  |           
|Stockholders' equity                      |                                                                                                                                                                             |                                            |           |                  |           
|                                          | Preferred stock, $.01 par value, 2,000,000 shares authorized; no shares issued                                                                                              |                                            |           |                 |           
|                                          | Common stock, $.01 par value, 40,000,000 shares authorized; 10,196,215 and 10,163,470 shares issued and outstanding as of April 30, 2002 and October 31, 2001, respectively |                                            |           | 102,000          |           
|                                          | Additional paid-in capital                                                                                                                                                  |                                            |           | 73,677,000       |           
|                                          | Accumulated other comprehensive income                                                                                                                                      |                                            |           | 58,000           |           
|                                          | Accumulated deficit                                                                                                                                                         |                                            |           | (8,639,000       | )         
|                                          |                                                                                                                                                                             |                                            |           |                  |           
|                                          |                                                                                                                                                                             | Total stockholders' equity                 |           |                  | 65,198,000
|                                          |                                                                                                                                                                             |                                            |           |                  |           
|                                          |                                                                                                                                                                             | Total liabilities and stockholders' equity |           | $                | 68,076,000
|                                          |                                                                                                                                                                             |                                            |           |                  |           

See
notes to the consolidated financial statements.

3

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NORTH AMERICAN SCIENTIFIC, INC.  Consolidated Statements of Operations

|                                                   |                                | Three Months Ended
April 30, |            | Six Months Ended
April 30, |          
|-------------------------------------------------- | ------------------------------ | ---------------------------- | ---------- | -------------------------- | ---------
|
|
|Net sales                                          |                                | $                            | 4,957,000  |                            | $        
|Cost of goods sold                                 |                                |                              | 1,870,000  |                            |          
|                                                   |                                |                              |            |                            |          
|                                                   |                                | Gross profit                 |            |                            | 3,087,000
|Selling, general and administrative expenses       |                                |                              | 1,639,000  |                            |          
|Research and development                           |                                |                              | 2,139,000  |                            |          
|Write-off of licenses and construction in progress |                                |                              | 2,714,000  |                            |          
|                                                   |                                |                              |            |                            |          
|Loss from operations                               |                                |                              | (3,405,000 | )                          |          
|                                                   | Interest and other income, net |                              |            | 466,000                    |          
|                                                   |                                |                              |            |                            |          
|Loss before provision for income taxes             |                                |                              | (2,939,000 | )                          |          
|Provision (benefit) for income taxes               |                                |                              | 1,939,000  |                            |          
|                                                   |                                |                              |            |                            |          
|Net loss                                           |                                | $                            | (4,878,000 | )                          | $        
|                                                   |                                |                              |            |                            |          
|Loss per share:                                    |                                |                              |            |                            |          
|                                                   | Basic                          |                              | $          | (.48                       | )        
|                                                   |                                |                              |            |                            |          
|                                                   | Diluted                        |                              | $          | (.48                       | )        
|                                                   |                                |                              |            |                            |          
|Shares used in per share calculations:             |                                |                              |            |                            |          
|                                                   | Basic                          |                              |            | 10,189,762                 |          
|                                                   |                                |                              |            |                            |          
|                                                   | Diluted                        |                              |            | 10,189,762                 |          
|                                                   |                                |                              |            |                            |          

See
notes to the consolidated financial statements.

4

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NORTH AMERICAN SCIENTIFIC, INC.
Consolidated Statements of Cash Flows

|                                                  |                                                                                          | Six Months Ended
April 30,                         |                                                     
|------------------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------------------------------------- | ----------------------------------------------------
|
|
|Cash flows from operating activities:             |                                                                                          |                                                    |                                                     
|                                                  | Net loss                                                                                 |                                                    | $                                                   
|                                                  | Adjustments to reconcile net loss to net cash provided by (used in) operating activities |                                                    |                                                     
|                                                  |                                                                                          | Depreciation and amortization                      |                                                     
|                                                  |                                                                                          | Non-cash stock option compensation                 |                                                     
|                                                  |                                                                                          | Write-off of licenses and construction in progress |                                                     
|                                                  |                                                                                          | Deferred income taxes                              |                                                     
|                                                  |                                                                                          | Changes in assets and liabilities                  |                                                     
|                                                  |                                                                                          |                                                    | Accounts receivable                                 
|                                                  |                                                                                          |                                                    | Inventories                                         
|                                                  |                                                                                          |                                                    | Prepaid expenses and other assets                   
|                                                  |                                                                                          |                                                    | Accounts payable                                    
|                                                  |                                                                                          |                                                    | Accrued expenses                                    
|                                                  |                                                                                          |                                                    | Income taxes                                        
|                                                  |                                                                                          |                                                    |                                                     
|                                                  |                                                                                          |                                                    | Net cash provided by (used in) operating activities 
|                                                  |                                                                                          |                                                    |                                                     
|Cash flows from investing activities:             |                                                                                          |                                                    |                                                     
|                                                  | Net purchases of marketable securities                                                   |                                                    |                                                     
|                                                  | Notes receivable, net                                                                    |                                                    |                                                     
|                                                  | Purchase of licenses                                                                     |                                                    |                                                     
|                                                  | Capital expenditures                                                                     |                                                    |                                                     
|                                                  |                                                                                          |                                                    |                                                     
|                                                  |                                                                                          |                                                    | Net cash used in investing activities               
|                                                  |                                                                                          |                                                    |                                                     
|Cash flows from financing activities:             |                                                                                          |                                                    |                                                     
|                                                  | Net proceeds from follow-on offering                                                     |                                                    |                                                     
|                                                  | Net proceeds from stock options and stock purchase plan                                  |                                                    |                                                     
|                                                  |                                                                                          |                                                    |                                                     
|                                                  |                                                                                          | Net cash provided by financing activities          |                                                     
|                                                  |                                                                                          |                                                    |                                                     
|                                                  |                                                                                          |                                                    | Net increase (decrease) in cash and cash equivalents
|Cash and cash equivalents at beginning of period  |                                                                                          |                                                    | 3,084,000                                           
|                                                  |                                                                                          |                                                    |                                                     
|Cash and cash equivalents at end of period        |                                                                                          | $                                                  | 2,618,000                                           
|                                                  |                                                                                          |                                                    |                                                     
|Supplemental disclosure of cash flow information: |                                                                                          |                                                    |                                                     
|Interest paid                                     |                                                                                          | $                                                  |                                                    
|                                                  |                                                                                          |                                                    |                                                     
|Income taxes paid                                 |                                                                                          | $                                                  |                                                    
|                                                  |                                                                                          |                                                    |                                                     

See
notes to the consolidated financial statements.

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NORTH AMERICAN SCIENTIFIC, INC.  Condensed Notes to Consolidated Financial Statements  (Unaudited)

Note 1Consolidated Financial Statements

Basis of Presentation

The accompanying consolidated financial statements of the Company are unaudited, other than the consolidated balance sheet at October 31, 2001, and reflect
all material adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary to present fairly the Company's financial position, results of operations
and cash flows for the interim periods. The results of operations for the current interim period are not necessarily indicative of the results to be expected for the entire fiscal year.

These
consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnotes
normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted pursuant to these rules
and regulations. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's
Form 10-K, as filed with the Securities and Exchange Commission for the year ended October 31, 2001.

Certain
reclassifications have been made to prior period balances in order to conform to the current period presentation.

Use of Estimates

In the normal course of preparing the financial statements in conformity with generally accepted accounting principles in the United States of America, management
is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and
reported amounts of revenue and expenses during the reporting period. Actual results could differ from those amounts.

Note 2Marketable Securities

The Company invests excess cash in short-term marketable securities consisting primarily of commercial paper, corporate notes and bonds, U.S.
Government securities and money market funds.

Marketable
securities are classified as either held to maturity or available for sale. Held to maturity securities are stated at amortized cost, which approximates fair value. Available
for sale securities are carried at fair value, with unrealized gains and losses included in accumulated other comprehensive income in stockholders' equity. Realized gains and losses and declines in
value judged to be other than temporary on available for sale securities are included in other income.

6

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Note 3Inventories

Inventories are valued at the lower of cost or market as determined under the first-in, first-out method. Costs include materials, labor
and manufacturing overhead. Inventories are shown net of applicable reserves and allowances. Inventories consist of the following:

April 30,
2002

October 31,
2001Raw materials

$
554,000

$
420,000Work in process


106,000


87,000Finished goods


72,000


102,000$
732,000

$
609,000


Note 4Goodwill

The Company has elected to early adopt statement of financial accounting standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets", effective the
beginning of fiscal 2002. Under this standard, goodwill and other intangible assets with indefinite lives are no longer amortized, but rather are reviewed for impairment annually, or more frequently
if certain indicators arise.

The
following table presents the impact of SFAS No. 142 on net income (loss) and earnings (loss) per share had the standard been in effect for the three and six months ended
April 30, 2002 and 2001.

|                                               |  | Three Months Ended
April 30, |            | Six Months Ended
April 30, |  
|---------------------------------------------- |  | ---------------------------- | ---------- | -------------------------- | -
|
|
|Net loss as reported                           |  | $                            | (4,878,000 | )                          | $
|Goodwill amortization                          |  |                              |           |                            |  
|                                               |  |                              |            |                            |  
|Net income (loss), as adjusted                 |  | $                            | (4,878,000 | )                          | $
|                                               |  |                              |            |                            |  
|Basic and diluted loss per share, as reported  |  | $                            | (.48       | )                          | $
|                                               |  |                              |            |                            |  
|Basic earnings (loss) per share, as adjusted   |  | $                            | (.48       | )                          | $
|                                               |  |                              |            |                            |  
|Diluted earnings (loss) per share, as adjusted |  | $                            | (.48       | )                          | $
|                                               |  |                              |            |                            |  

The
Company is required to perform goodwill impairment tests on an annual basis and between annual tests in certain circumstances. As of April 30, 2002, no impairment of goodwill
has been recognized.

Note 5Net Income (Loss) per Share

Basic earnings (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares outstanding for the period. Diluted
earnings (loss) per share is computed by dividing the net income (loss) by the sum of the weighted average number of common shares outstanding for the period plus the assumed exercise of all dilutive
securities by applying the treasury

7

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stock method unless such assumed exercises are anti-dilutive. The following table sets forth the computation of basic and diluted earnings (loss) per share:

|                                              |  | Three Months Ended
April 30, |            | Six Months Ended
April 30, |  
|--------------------------------------------- |  | ---------------------------- | ---------- | -------------------------- | -
|
|
|Net loss                                      |  | $                            | (4,878,000 | )                          | $
|                                              |  |                              |            |                            |  
|Weighted average shares outstandingBasic     |  |                              | 10,189,762 |                            |  
|Dilutive effect of stock options and warrants |  |                              |           |                            |  
|                                              |  |                              |            |                            |  
|Weighted average shares outstandingDiluted   |  |                              | 10,189,762 |                            |  
|                                              |  |                              |            |                            |  
|Basic earnings (loss) per share               |  | $                            | (.48       | )                          | $
|Diluted earnings (loss) per share             |  | $                            | (.48       | )                          | $

Since
the Company reported a net loss for the three and six months ended April 30, 2002 and 2001, stock options and warrants to purchase 540,751 and 460,473 common shares for the
three months ended April 30, 2002 and 2001, respectively, and 565,486 and 587,853 shares for the six months ended April 30, 2002 and 2001, respectively, were outstanding, but were not
included in the computation of diluted earnings per share because the effect would have been anti-dilutive.

Stock
options to purchase 475,163 and 491,254 common shares for the three months ended April 30, 2002 and 2001, respectively, and 441,098 and 358,603 shares for the six months
ended April 30, 2002 and 2001, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the exercise price of the options was greater than
the average market price of the common shares and, therefore, the effect would have been anti-dilutive.

Note 6Comprehensive Loss

The components of comprehensive loss are as follows:

|                          |                                                  | Three Months Ended
April 30, |            | Six Months Ended
April 30, |  
|------------------------- | ------------------------------------------------ | ---------------------------- | ---------- | -------------------------- | -
|
|
|Comprehensive Loss:       |                                                  |                              |            |                            |  
|Net loss                  |                                                  | $                            | (4,878,000 | )                          | $
|Other Comprehensive Loss: |                                                  |                              |            |                            |  
|                          | Unrealized loss on securities available for sale |                              |            | (4,000                     | )
|                          |                                                  |                              |            |                            |  
|                          | Total comprehensive loss                         |                              | $          | (4,882,000                 | )
|                          |                                                  |                              |            |                            |  



8

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Note 7Write-off of Licenses and Construction in Progress

Licenses and equipment include certain costs related to patents and technology licensed from third parties for the development of Apomate. In 2001
the Company licensed additional technology and patent rights from a third party for the development of an improved version of the Apomate kit. During the second quarter ended
April 30, 2002 the Company completed an evaluation of this new technology. Based on this evaluation, the Company decided to exclusively pursue the development of Apomate with the
newly licensed technology. Results of operations for the three and six month periods ended April 30, 2002 include a charge of approximately $2.7 million to reflect the total
write-off and abandonment of previously acquired licenses and associated equipment.

Note 8Deferred Income Taxes

The Company continually reviews the adequacy of the valuation allowance of its net deferred tax assets in accordance with the provisions of SFAS No. 109.
The company's net deferred tax assets include substantial amounts of net operating loss and tax credit carryforwards. Failure to achieve forecasted taxable income would affect the ultimate realization
of the net deferred tax assets. There can be no assurance that in the future there would not be increased competition or other factors that may result in a decline in margins, loss of market share or
technological obsolescence. In addition, the Company expects to incur significant expenses for the next several years for ongoing clinical trials and development of the Apomate kit. Due
to these uncertainties, the Company recorded an additional valuation allowance of approximately $1.9 million during the three months ended April 30, 2002.

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information, which our management believes is relevant to an assessment and understanding of our financial
condition and results of operations. The discussion should be read in conjunction with the Consolidated Financial Statements contained herein and the notes thereto. Certain statements contained in
this Form 10-Q, including, without limitation, statements containing the words "believes", "anticipate", "estimates", "expects", "projections", and words of similar import are
forward looking as that term is defined by: (i) the Private Securities Litigation Reform Act of 1995 (the "1995 Act") and (ii) releases issued by the SEC. These statements are being made
pursuant to the provisions of the 1995 Act and with the intention of obtaining the benefits of the "Safe Harbor" provisions of the 1995 Act. We caution that any forward looking statements made herein
are not guarantees of future performance and that actual results may differ materially from those in such forward looking statements as a result of various factors, including, but not limited to, any
risks detailed herein or detailed from time to time in our other filings with the SEC including our most recent report on Form 10-K. We are not undertaking any obligation to update
publicly any forward-looking statements. Readers should not place undue reliance on these forward-looking statements.

Overview

We design, develop and produce innovative radioisotopic products, including brachytherapy seeds and radiopharmaceuticals, for the treatment and diagnosis of
disease. Since 1990, we have also applied our expertise in radioisotopes to develop and market products for medical, environmental, research and industrial applications. Sales of our brachytherapy
products represented approximately 79% of our revenue for the six months ended April 30, 2002.

In
October 2000, we acquired Theseus Imaging Corporation, a developer of proprietary radiopharmaceuticals to enhance the medical management of cancer, heart attack, and heart
transplant rejection. We expect to continue to incur significant ongoing clinical trial and development costs related

9

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to Theseus' principal product candidate, Apomate. In addition, we expect to incur substantial expenses associated with the launch of Apomate, pending receipt of marketing
approval from the FDA.

Results of Operations

Three Months Ended April 30, 2002 Compared to Three Months Ended April 30, 2001

Net sales.Net sales decreased $103,000, or 2%, to $4,957,000 for the three months ended April 30, 2002 from
$5,060,000 for the three months ended April 30, 2001. The decrease in net sales was due to the decrease in revenues generated from our brachytherapy product lines.

Gross profit.Gross profit decreased $203,000 or 6% to $3,087,000 for the three months ended April 30, 2002 from
$3,290,000 for the three months ended April 30, 2001. Gross profit as a percent of sales decreased from 65% to 62% during this period. The decrease in gross profit as a percentage of sales was
primarily due to a change in product mix and increased competition in both our brachytherapy and non-therapeutic product lines.

Selling, general and administrative expenses.Selling, general and administrative ("SG&A") expenses decreased $38,000, or 2%,
to $1,639,000 for the three months ended April 30, 2002 from $1,677,000 for the three months ended April 30, 2001. The decrease is primarily attributed to discontinued amortization of
goodwill offset by an increase in salary expense. The Company has elected to early adopt Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets"
effective November 1, 2001. In accordance with SFAS 142 we discontinued the amortization of goodwill. Amortization of goodwill for the three months ended April 30, 2001 was
$92,000. For additional information regarding SFAS 142, see Note 4 in the financial statement footnotes.

Research and development.Research and development expenses decreased $24,000 or 1% to $2,139,000 for the three months ended
April 30, 2002 from $2,163,000 for the three months ended April 30, 2001. These costs primarily represent our continued investment in Apomate, which is currently in clinical
trials. Research and development spending reflects our belief that to maintain our competitive position in a market characterized by rapid rates of technological advancement, we must continue to
invest significant resources in new product development, as well as continue to enhance existing products. All of our research and development costs are expensed as incurred.

Write-off of licenses and construction in progress.Results of operations for the three months ended
April 30, 2002 include a charge of approximately $2.7 million to reflect the total write-off of abandoned licenses and associated equipment. These costs were associated with
technology licensed from third parties for the development of Apomate. In 2001 we licensed additional technology and patent rights from another third party for the development of an
improved version of our Apomate kit. During the second quarter ended April 30, 2002 we completed an evaluation of this new technology. Based on this evaluation, we decided to
exclusively pursue the development of Apomate with the newly licensed technology and to write-off the prior technology.

Interest and other income.Interest and other income decreased $70,000, or 13%, to $466,000 for the three months ended
April 30, 2002 from $536,000 for the three months ended April 30, 2001. This decrease reflects a general decline in the effective yield of our portfolio of marketable securities
consistent with the general decline in interest rates in the period.

10

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Provision (benefit) for income taxes.The provision for income taxes increased $1,944,000 to $1,939,000 for the three months
ended April 30, 2002 from a benefit of $5,000 for the three months ended April 30, 2001. The increase is primarily due to the recognition of a $1.9 million valuation allowance of
our deferred tax assets.

Six Months Ended April 30, 2002 Compared to Six Months Ended April 30, 2001

Net sales.Net sales increased $517,000, or 6%, to $9,893,000 for the six months ended April 30, 2002 from $9,376,000
for the six months ended April 30, 2001. The increase in net sales was due to the increase in revenues generated from both our brachytherapy and non-therapeutic product lines.

Gross profit.Gross profit increased $152,000 or 3% to $6,252,000 for the six months ended April 30, 2002 from
$6,100,000 for the six months ended April 30, 2001. Gross profit as a percent of sales decreased from 65% to 63% during this period. The decrease in gross profit as a percentage of sales was
primarily due to a change in product mix and increased competition in both our brachytherapy and non-therapeutic product lines.

Selling, general and administrative expenses.SG&A expenses decreased $135,000, or 9%, to $2,864,000 for the six months ended
April 30, 2002 from $2,999,000 for the six months ended April 30, 2001. The decrease is primarily attributed to discontinued amortization of goodwill, partially offset by an increase in
salary expense. The Company has elected to early adopt SFAS 142 effective November 1, 2001. In accordance with SFAS 142 we discontinued the amortization of goodwill. Amortization
of goodwill for the six months ended April 30, 2001 was $184,000. For additional information regarding SFAS 142, see Note 4 in the financial statement footnotes.

Research and development.Research and development costs decreased slightly from $4,382,000 for the six months ended
April 30, 2001 to $4,369,000 for the six months ended April 30, 2002. These costs primarily represent our continued investment in Apomate, which is currently in clinical
trials. Our research and development spending reflects our belief that to maintain our competitive position in a market characterized by rapid rates of technological advancement, we must continue to
invest
significant resources in new product development, as well as continue to enhance existing products. All of our research and development costs are expensed as incurred.

Write-off of licenses and construction in progress.Results of operations for the six months ended
April 30, 2002 include a charge of approximately $2.7 million to reflect the total write-off of abandoned licenses and associated equipment. These costs were associated with
technology licensed from third parties for the development of Apomate. In 2001 we licensed additional technology and patent rights from a third party for the development of an improved
version of our Apomate kit. During the second quarter ended April 30, 2002 we completed an evaluation of this new technology. Based on this evaluation, we decided to exclusively
pursue the development of Apomate with the newly licensed technology and to write-off the prior technology.

Interest and other income.Interest and other income increased $77,000, or 9%, to $956,000 for the six months ended
April 30, 2002 from $879,000 for the six months ended April 30, 2001. This increase was a result of (i) the recognition of six months worth of interest income related to the
investment of funds received from our follow-on offering completed in December 2000 and (ii) the elimination of interest expense in fiscal 2002 as our short term debt was
retired in July 2001, which was partially offset by a decline in the effective yield on our portfolio of marketable securities consistent with the general decline in interest rates throughout
2002.

Provision (benefit) for income taxes.The provision for income taxes increased $2,169,000 to $2,013,000 for the six months
ended April 30, 2002 from a benefit of $156,000 for the six months ended April 30, 2001. The increase is primarily due to the recognition of a $1.9 million valuation allowance of
our deferred tax assets.

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Liquidity and Capital Resources

To date, our short-term liquidity needs have generally consisted of operating capital to finance growth in inventories, trade accounts receivable, new
product development, capital expenditures and strategic investments in related businesses. We have satisfied these needs primarily through a combination of public offerings and private placements of
our common stock and from cash generated by operations. We do not currently have a line of credit or similar arrangements with a bank. At April 30, 2002, we had cash and investments in
marketable securities aggregating approximately $54.7 million and working capital of $57.0 million. For the six months ended April 30, 2002, net cash provided by operating
activities was approximately $585,000. Net cash used in investing activities totaled approximately $1.2 million during the six months ended April 30, 2002.

During
the six months ended April 30, 2002, we received $55,000 from the exercise of stock options. We also received $54,000 from the purchase of shares related to our employee
stock purchase plan.    Proceeds from both stock option exercises and employee stock purchases and their related tax benefits will vary from period to period based upon, among other
factors, fluctuations in the market value of our stock relative to the exercise price of such options.

The
primary objectives for our portfolio of marketable securities are liquidity and safety of principal. Consistent with these two objectives, investments are made to achieve the highest
rate of return. We invest excess cash in securities with varying short-term maturities to meet projected cash needs.

We
believe our current cash and marketable securities and anticipated cash flow from operations will be sufficient to support our operations and planned expansion for the foreseeable
future. However, the amount of capital that we will need in the future will depend on many factors including:



We
anticipate incurring significant expenses with respect to Apomate over the next three to four years for ongoing clinical trials and development costs. Significant
milestone payments to third parties are payable throughout the life of the contracts associated with our licenses of patent rights of technology related to Apomate. Significant additional
milestone payments would be payable to third parties in the event that we file for marketing approval in the European Union or Japan.

We
anticipate that available cash will provide sufficient funds to cover the above costs. In addition, the costs related to Apomate may be reduced if we enter into strategic
partnerships related to Apomate.

Future
capital requirements will also depend on the extent to which we acquire or invest in businesses, products and technologies. If we should require additional financing due to
unanticipated developments, additional financing may not be available when needed or, if available, we may not be

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able to obtain this financing on terms favorable to our stockholders or us. Insufficient funds may require us to delay, scale back or eliminate some or all of our research and development programs.
If additional funds were raised by issuing equity securities, dilution to existing stockholders would result.

Industry Developments

Our brachytherapy products fall within various "transitional pass-through codes," which are separate from the procedure payment codes that comprise
much of Medicare's Outpatient Prospective Payment System (OPPS). Effective April 1, 2002, The Centers for Medicare and Medicaid Services (CMS) implemented changes in hospital payments for
brachytherapy and other services provided under Medicare's OPPS for the remainder of 2002. Through December 1, 2002 CMS will bundle a portion of pass-through reimbursement for
brachytherapy seeds and other pass-through devices with associated procedure codes, thereby effectively sheltering seeds from "pro rata reductions" that would otherwise have applied under
current Medicare Law. To the extent that these pass-through device costs exceed the bundled amount, the remaining cost will be subject to a pro rata reduction in reimbursement. We do not
anticipate any impact on the price of our products for the remainder of fiscal 2002 as a result of the current reimbursement structure.

Based
on the importance of third-party reimbursement to all providers of healthcare products and services, we will continue to closely monitor reimbursement of healthcare costs. Future
reductions in payments for brachytherapy seeds could adversely affect prices of brachytherapy seeds and our revenue stream.

Recent Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Obligations." SFAS No. 143 requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is incurred and that the associated asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset. The Statement is effective for fiscal years beginning after June 15, 2002. We have not determined the impact that adoption of this Standard will have on our
consolidated financial statements.

In
August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment of Long-Lived Assets." SFAS No. 144 supercedes SFAS
No. 121,"Accounting for the Impairment of Long-Lived Assets to be Disposed Of", and APB Opinion No. 30, "Reporting Extraordinary, Unusual and Infrequently Occurring Events
and Transactions" and amends APB No. 51, "Consolidated Financial Statements." This Statement was issued to address the accounting for a segment of a business accounted for as a discontinued
operation under APB No. 30 and to establish a single accounting model based on the framework established in SFAS No. 121, for long-lived assets to be disposed of by sale. The
Statement is effective for financial statements issued for fiscal years beginning after December 15, 2001. We have not determined the impact that adoption of this Standard will have on our
consolidated financial statements.

In
May 2002, the FASB issued SFAS No. 145, "Rescission of SFAS Nos. 4, 44 and 64, Amendment of SFAS No. 13, and Technical Corrections." Among other things, SFAS
No. 145 rescinds various pronouncements regarding early extinguishment of debt and allows extraordinary accounting treatment
for early extinguishment only when the provisions of Accounting Principles Board Opinion No. 30, "Reporting the Results of OperationsReporting the Effects of Disposal of a Segment
of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" are met. SFAS No. 145 provisions regarding early extinguishment of debt are generally effective for
fiscal years beginning after May 15, 2002. We do not believe that the adoption of this statement will have a material impact on our consolidated financial statements.

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Item 3.    Quantitative and Qualitative Disclosures about Market Risk

Information about market risks for the three and six months ended April 30, 2002 does not differ materially from that discussed under Item 7A of our Annual
Report on Form 10-K for 2001.

PART IIOTHER INFORMATION

We were not required to report the information pursuant to Items 1 through 6 of Part II of Form 10-Q except as follows:

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

On April 1, 2002, we held our 2002 Annual Meeting of Stockholders. The following persons were elected as directors to hold office until the 2003 Annual
Meeting of Stockholders: Irwin J. Gruverman, L. Michael Cutrer, Larry Berkin, Dr. Allan M. Green and Mitchell H. Saranow. The number of shares cast for, withheld and abstained with respect to
each of the nominees were as follows:

Nominee

For

Withheld

AbstainedGruverman

9,761,715

15,769

Cutrer

7,303,510

2,473,974

Berkin

9,734,685

42,799

Green

7,523,288

2,254,196

Saranow

9,729,710

47,774




The
stockholders also voted to approve the ratification of the selection of PricewaterhouseCoopers LLP as our independent accountants for the fiscal year ending October 31, 2002.
A total of 9,575,038 shares were cast for the adoption of the proposal, 200,446 shares were cast against this proposal, and 2,000 shares abstained.

There
were no broker non-votes on either matter.

Item 6.    Exhibits and Reports on Form 8-K



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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.

|             |  | NORTH AMERICAN SCIENTIFIC, INC.
|------------ |  | -------------------------------
|June 3, 2002 |  | By:                            
|June 3, 2002 |  | By:                            

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