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

                                    FORM 10-Q

(Mark  One)
[X]     Quarterly  report  pursuant  to  Section  13  or 15(d) of the Securities
Exchange  Act  of  1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
     or
[   ]     Transition  report  pursuant  to Section 13 or 15(d) of the Securities
Exchange  Act  of  1934

             For the transition period from __________ to __________

                         COMMISSION FILE NUMBER 0-27212

                                 ENDOCARE, INC.
             (Exact name of registrant as specified in its charter)


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



                     7 STUDEBAKER, IRVINE, CALIFORNIA 92618
               (Address of principal executive office) (Zip Code)

                                 (949) 595-4770
              (Registrant's telephone number, including area code)



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

The  number  of  shares  of  the  Registrant's Common Stock, par value $.001 per
share,  outstanding  on  May  8,  2001  was  15,334,515.



<PAGE>



                                 ENDOCARE, INC.
                     FORM 10-Q, QUARTER ENDED MARCH 31, 2001
                                      INDEX
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                           -----
<S>     <C>                                                                 <C>
                      Part I. Financial Information
Item 1. Financial Statements (unaudited)
          Condensed Consolidated Statements of Operations for the
          three months ended March 31, 2001 and 2000. . . . . .                3

          Condensed Consolidated Balance Sheets at March 31, 2001
          and December 31, 2000 . . . . . . . . . . . . . . . . .              4

          Condensed Consolidated Statements of Cash Flows for the
          three months ended March 31, 2001 and 2000. . . . . . .              5

          Notes to Condensed Consolidated Financial Statements.                6

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations . . . . . . . . . . . . . . .               10

Item 3. Quantitative and Qualitative Disclosures About Market Risk            18

                      Part II. Other Information

Item 1. Legal Proceedings                                                     19

Item 2. Changes in Securities                                                 19

Item 3. Defaults Upon Senior Securities                                       19

Item 4. Submission of Matters to a Vote of Security Holders                   19

Item 5. Other Information                                                     19

Item 6. Exhibits and Reports on Form 8-K                                      19

Signature Page. . . . . . . . . . . . . .                                     20
</TABLE>




<PAGE>




                          ITEM 1. FINANCIAL STATEMENTS

                          ENDOCARE, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED
                                                    MARCH 31,
                                             2001            2000
                                         -------------  --------------
<S>                                      <C>            <C>
Revenues:
Net product sales . . . . . . . . . . .  $  2,413,115   $   1,137,910
Mobile cryosurgical procedures. . . . .       342,472         173,120
                                         -------------  --------------
Total revenues. . . . . . . . . . . . .     2,755,587       1,311,030
                                         -------------  --------------

Costs and expenses:
Cost of  product sales. . . . . . . . .       948,734         518,107
Cost of mobile cryosurgical procedures.       225,156          97,223
Research and development. . . . . . . .       902,819         723,708
Selling, general and administrative . .     3,024,120       2,660,430
                                         -------------  --------------
Total costs and expenses. . . . . . . .     5,100,829       3,999,468
                                         -------------  --------------

Loss from operations. . . . . . . . . .    (2,345,242)     (2,688,438)
Interest income (expense), net. . . . .         3,074      (  325,230)
                                         -------------  --------------
Net loss. . . . . . . . . . . . . . . .  $ (2,342,168)  $  (3,013,668)
                                         =============  ==============

Net loss per share of common stock -
basic and diluted . . . . . . . . . . .  $      (0.15)  $       (0.27)
                                         =============  ==============

Weighted average shares of common stock
outstanding . . . . . . . . . . . . . .    15,153,761      11,299,878
                                         =============  ==============
</TABLE>

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

<PAGE>


                          ENDOCARE, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                       MARCH 31,     DECEMBER 31,
                                                          2001            2000
                                                     (UNAUDITED)
                                                    -------------   -------------
ASSETS
<S>                                                 <C>             <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . .  $  18,303,420   $ 22,016,448
Accounts receivable, net . . . . . . . . . . . . .      2,884,743      2,113,766
Inventories. . . . . . . . . . . . . . . . . . . .      1,861,106      1,543,733
Prepaid expenses and other current assets. . . . .        161,032        178,972
                                                    --------------  -------------

Total current assets . . . . . . . . . . . . . . .     23,210,301     25,852,919

Property and equipment, net. . . . . . . . . . . .      1,455,328      1,496,153
Deferred financing costs and other assets, net . .      1,481,677      1,495,718
                                                    --------------  -------------

Total assets . . . . . . . . . . . . . . . . . . .  $  26,147,306   $ 28,844,790
                                                    ==============  =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable . . . . . . . . . . . . . . . . .  $   1,589,236   $  2,231,344
Accrued compensation . . . . . . . . . . . . . . .      1,386,343      1,646,079
Other accrued liabilities. . . . . . . . . . . . .      1,757,011      1,523,602
Credit facility. . . . . . . . . . . . . . . . . .      1,000,000      1,000,000
                                                    --------------  -------------

Total current liabilities. . . . . . . . . . . . .      5,732,590      6,401,025

Convertible debentures . . . . . . . . . . . . . .      6,500,000      7,500,000
Note payable and other liabilities . . . . . . . .         61,103         74,268
                                                    --------------  -------------
Total liabilities. . . . . . . . . . . . . . . . .     12,293,693     13,975,293

Shareholders' equity:
Preferred stock, $.001 par value; 1,000,000 shares
authorized; none issued and outstanding. . . . . .             --             --
Common Stock, $.001 par value; 15,273,176
and 15,018,649 issued and outstanding at
March 31, 2001 and December 31, 2000,
respectively . . . . . . . . . . . . . . . . . . .         15,273         15,019
Additional paid-in capital . . . . . . . . . . . .     49,381,884     48,163,186
Note receivable from stock sale. . . . . . . . . .   (  1,028,125)    (1,135,457)
Accumulated deficit. . . . . . . . . . . . . . . .    (34,515,419)   (32,173,251)
                                                    --------------  -------------
Total shareholders' equity . . . . . . . . . . . .     13,853,613     14,869,497
                                                    --------------  -------------

Contingencies
Total liabilities and shareholders' equity . . . .  $  26,147,306   $ 28,844,790
                                                    ==============  =============
</TABLE>

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


<PAGE>


                          ENDOCARE, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED
                                                                        MARCH 31,
                                                                2001               2000
                                                           -------------      --------------
<S>                                                      <C>                  <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . .  . . .  $   (  2,342,168)    $(  3,013,668)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization. . . . . . . . . .  . . .            96,162            96,217
Amortization of warrant value. . . . . . . . . .  .                49,062            96,761
Amortization of deferred financing costs . . . .  .                60,000           188,335
Changes in operating assets and liabilities:
Accounts receivable. . . . . . . . . . . . . . .  . . .        (  770,975)           47,206
Inventories. . . . . . . . . . . . . . . . . . .  . . .        (  280,303)       (  270,038)
Prepaid expenses and other current assets. . . .  . .               4,524          (  7,892)
Other assets . . . . . . . . . . . . . . . . . .  . .          (  149,800)         (  4,998)
Accounts payable . . . . . . . . . . . . . . . .               (  642,108)          474,482
Accrued compensation . . . . . . . . . . . . . . . .           (  177,989)       (  235,743)
Other accrued liabilities. . . . . . . . . . . . ...              220,611           267,798
Deferred revenue and other . . . . . . . . . .  . ..                   --         (  12,280)
                                                      --------------------    --------------
Net cash used in operating activities. .  . . . . ..         (  3,932,984)     (  2,373,820)
                                                      --------------------    --------------
Cash flows from investing activities:
Purchases of property and equipment. . . . . .  . ..           (   56,902)        (  55,188)
                                                      --------------------    --------------
Net cash used in investing activities. .  . . . . ..           (   56,902)        (  55,188)
                                                      --------------------    --------------
Cash flows from financing activities:
Issuance of common stock . . . . . . . . . . . . .                276,858           186,993
                                                      --------------------    --------------
Net cash provided by financing activities. .  . . .               276,858           186,993
                                                      --------------------     -------------
Net decrease in cash and cash equivalents. . . .. .          (  3,713,028)     (  2,242,015)
Cash and cash equivalents, beginning of period .. .            22,016,448         7,364,951
                                                      --------------------    --------------
Cash and cash equivalents, end of period . . . .. .   $        18,303,420     $   5,122,936
                                                      ====================    ==============
Non-cash activities:
Convertible debentures converted to common stock. .   $         1,000,000     $          --

Acquisition of trademark and domain name through
issuance of 20,000 shares of common stock                              --           435,000

Transfer of inventory to property and equipment
for placement at customer sites. . . . . .                         42,930           186,100
                                                      --------------------    --------------
Total non-cash activities. . . . . . . . . . . ... .  $         1,042,930     $     621,100
                                                      ====================    ==============
</TABLE>


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


<PAGE>

                                 ENDOCARE, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.     Organization  and  Operations  of  the  Company

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

2.   Financial  Information

Basis  of  Presentation

In  the opinion of management, the accompanying unaudited condensed consolidated
financial  statements  contain  all  adjustments  necessary  (consisting only of
normal recurring accruals) to present fairly the financial information contained
therein.  These  statements do not include all disclosures required by generally
accepted  accounting  principles  and  should  be  read  in conjunction with the
audited  consolidated financial statements and other information included in the
Company's  Annual  Report  on  Form  10-K  for the year ended December 31, 2000.
Financial  results  for  this  interim  period are not necessarily indicative of
results  to  be  expected  for  the  full  year  2001.

Accounting  Principles

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

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

3.     Use  of  Estimates

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

4.     Supplemental  Financial  Statement  Data


<TABLE>
<CAPTION>
                    MARCH 31,    DECEMBER 31,
                      2001          2000
                   ----------   -------------
<S>                <C>           <C>
Inventories:
Raw materials . .  $  846,862     $   763,389
Work in process .     479,937         288,480
Finished goods. .     534,307         491,864
                   ----------     -----------

Total inventories  $1,861,106     $ 1,543,733
                   ==========     ===========
</TABLE>



5.     Net  Loss  Per  Share

The  Company  has  adopted  SFAS No. 128, "Earnings Per Share."  Under SFAS 128,
basic  EPS is calculated by dividing net earnings (loss) by the weighted-average
common shares outstanding during the period.  Diluted EPS reflects the potential
dilution  to  basic  EPS  that  could  occur  upon  conversion  or  exercise  of
securities,  options,  convertible  debentures,  or  other such items, to common
shares  using  the  treasury  stock  method based upon the weighted-average fair
value of the Company's common shares during the period.  In accordance with SFAS
128,  the  consolidated  loss  (numerator),  shares  (denominator) and per-share
amounts  for  the  three  months  ended  March  31,  2000 and March 31, 2001 are
$(3,014,000),  11,300,000  $(0.27),  and  $(2,342,000),  15,154,000 and $(0.15),
respectively.  As  the  Company  has been in a net loss position for the periods
presented,  the  potential dilution from the conversion of options, warrants and
convertible  debentures to common stock of approximately 5,038,000 and 4,021,000
for  the three months ended March 31, 2000 and 2001, respectively, were not used
to compute diluted loss per share as the effect was antidilutive.  Consequently,
diluted  EPS  equals  basic  EPS.

6.     Merger

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

7.     Debt

Convertible  Debentures

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

Under  a  securities  purchase  agreement,  the  purchasers  had  a  call option
exercisable  at  any time prior to June 7, 2002 to require that the Company sell
to  the purchasers an additional $5,000,000 principal amount of debentures.  The
additional  debentures  mature  three  years from the date they are issued, bear
interest at 7% per annum and are convertible in whole or in part at a conversion
price  of  $6.75  per share (subject to certain anti-dilution adjustments).  The
Company  had  a  put  option  to  require  the  purchasers to buy the $5,000,000
principal  amount  of  additional  debentures  if  the closing bid price for the
common  stock  as  listed  for  quotation was more that $10.00 per share for the
twenty  (20)  trading  days  in a consecutive (30) trading day period and on the
date  the  Company  elected  to  exercise  the  put option, and if certain other
conditions  were  met.  The purchasers also had a call option exercisable at any
time  prior to July 29, 2002 to require the Company to sell to the purchasers an
additional $3,000,000 principal amount of debentures.  The additional debentures
mature  three years from the date they are issued, bear interest at 7% per annum
and  are  convertible in whole or in part at the option of the purchasers at any
time  prior  to  maturity  into  common stock at a conversion price of $6.75 per
share  (subject  to  certain  anti-dilution adjustments).  The Company had a put
option  to  require  the  purchasers  to  buy the $3,000,000 principal amount of
additional  debentures  if  the closing bid price for the common stock as listed
for  quotation  was  more than $9.00 per share for twenty (20) trading days in a
consecutive  thirty  (30) trading day period and on the date the Company elected
to  exercise  the  put option, and certain other conditions were met.  On May 5,
2000,  the  Company  received  $8,000,000  from  the  sale  of the additional 7%
convertible  debentures  to  institutional  investors  pursuant  to the purchase
options  discussed  above, of which $500,000 was converted into 74,074 shares of
common stock during the fourth quarter of 2000 and $1,000,000 was converted into
148,148  shares  of  common  stock  during the first quarter of 2001.  Financing
costs  totaling  $585,000 associated with the transaction are being amortized to
interest  expense over three years.  The same investors originally purchased the
$8,000,000  of  convertible  debentures  in  1999.

The  fair  value  of  the  purchasers' two call options described above totaling
$1,600,000,  was  originally estimated using the Black-Scholes pricing model and
was being amortized to interest expense over the lives of the call options.  The
net  unamortized balance totaling $1,156,863 was reclassified to additional paid
in  capital upon conversion of the original $8,000,000 of convertible debentures
into  common  stock  in  2000.

Credit  Facility

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

8.     Stockholders'  Rights  Plan

In  April  1999,  the  Company  adopted  a  stockholder  rights  plan  in  which
preferred stock purchase rights will be distributed as a dividend at the rate of
one  right  for  each  share of common stock held as of the close of business on
April  15, 1999.  The rights are designed to guard against partial tender offers
and  other abusive and coercive tactics that might be used in an attempt to gain
control  of  the  Company  or  to  deprive  the  Company's stockholders of their
interest  in the long-term value of the Company.  The rights will be exercisable
only  if  a  person  or group acquires 15% or more of the Company's common stock
(subject  to  certain exceptions stated in the Plan) or announces a tender offer
the  consummation of which would result in ownership by a person or group of 15%
or  more of the Company's common stock.  At any time on or prior to the close of
business  on  the first date of a public announcement that a person or group has
acquired  beneficial  ownership  of  15%  or  more of the Company's common stock
(subject  to  certain  exceptions stated in the Plan), the rights are redeemable
for  one  cent  per  right  at  the  option  of  the  Board  of  Directors.

9.     Legal  Proceedings

In  March  2000,  the  Company  filed  patent  infringement  lawsuits  against
Israeli-based  Galil  Medical,  Ltd., and its U.S. affiliate, Galil Medical USA,
Inc. (collectively, "Galil").  The suit against Galil filed in the U.S. District
Court  for  the  Central District of California, alleges that Galil has marketed
and  sold  cryosurgical systems that infringe Endocare's patented combination of
cryo-cooling, ultrasound and temperature monitoring technology.  Endocare's suit
seeks  damages  and  injunctive  relief with respect to products and procedures,
which  are found to infringe Endocare's proprietary technology.  In August 2000,
Galil  submitted  counterclaims  alleging  that  Endocare's  cryosurgical probes
infringe  Galil's probe patents.  Galil seeks unspecified damages and injunctive
relief  with respect to Endocare's cryosurgical system.  The Company believes it
has  adequate  defenses  to  these  claims  and intends to defend the litigation
vigorously  if  necessary.  All  proceedings  in  the  action were stayed by the
District  Court  on  December  13,  2000  pending  the  outcome  of  settlement
discussions  by  the  parties.  The  parties are currently engaged in settlement
discussions.

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

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

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

<PAGE>


ITEM  2.

                                 ENDOCARE, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The  following  should  be  read  in  conjunction  with  the unaudited condensed
consolidated  financial  statements and notes thereto included in Part I--Item 1
of  this  report,  and  the audited consolidated financial statements, and notes
thereto,  and  Management's  Discussion  and Analysis of Financial Condition and
Results of Operations contained in the Annual Report on Form 10-K for the fiscal
year  ended  December  31,  2000.

The  following  Management's  Discussion and Analysis of Financial Condition and
Results of Operations may be deemed to contain forward-looking statements within
the  meaning  of  Section 21E of the Securities Exchange Act of 1934, as amended
and  are  subject  to  the  Safe  Harbor provisions created by that statute. Our
business  and  results  of  operations  are  subject  to  various  risks  and
uncertainties  including,  but not limited to, those discussed under the caption
"Factors  That  May  Affect  Our  Future Results and Trading Price of Our Common
Stock"  included  elsewhere in this report, and in risk factors contained in our
other  periodic  reports filed with the Securities and Exchange Commission. Such
risk  factors  include, but are not limited to, limited operating history of our
business with a history of losses; fluctuations in our order levels; uncertainty
regarding  market  acceptance  of  our  current and new products; uncertainty of
product  development  and  the  associated risks related to clinical trials; the
rapid pace of technological change in our industry; our limited sales, marketing
and  manufacturing  experience,  and  the  ability  to  convince  health  care
professionals and third party payers of the medical and economic benefits of our
Cryocare  System.  The actual results that we achieve may differ materially from
any  forward-looking  statements  due  to  such  risks  and uncertainties and we
undertake  no  obligation  to  update  any  such  forward-looking  statements.

General

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

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

On June 30, 1999,  we  acquired all of the  outstanding membership  interests of
AMP.  AMP operates a mobile  cryosurgery  business  that  provides  cryosurgical
equipment for the treatment of prostate and liver  cancer on a procedural basis.
The merger was accounted  for  as a pooling-of-interests for financial reporting
purposes.  The  historical  financial  statements for the periods prior  to  the
merger  are  restated  as  though  our  business  had been  combined during such
periods.

Results  of  Operations

Three  months  ended  March  31,  2001  and  2000

Net  product  sales  for the three months ended March 31, 2001 increased 112% to
$2,413,000  compared  to  $1,138,000  for the three months ended March 31, 2000.
The  increase  was attributable primarily to the increased sales of our Cryocare
System  and  related  disposable  Cryoprobes  following  Medicare's July 1, 1999
implementation  of  national  coverage  for  localized  prostate  cancer.

Revenues  from  mobile  cryosurgical procedures for the three months ended March
31,  2001  increased  98%  to $342,000 compared to $173,000 for the three months
ended  March 31, 2000.  The increase corresponds to an increase in the number of
mobile  cryosurgical  procedures  performed.

Gross  margin  on net product sales was 61% for the three months ended March 31,
2001 compared to 54% for the three months ended March 31, 2000.  The increase is
due to a mix of higher margin cryosurgical probe and system sales coupled with a
reduction  in  product  costs  due  to  increased  manufacturing  efficiencies.

Gross  margin  on  mobile  cryosurgical  procedures was 34% for the three months
ended  March 31, 2001 compared to 44% for the three months ended March 31, 2000.
The decrease is due to a change in procedure mix which included a greater number
of  lower  margin  procedures  performed  in  2001.

Research  and  development  expense  for  the  three months ended March 31, 2001
increased  25% to $903,000 compared to $724,000 for the three months ended March
31,  2000.  The  increase  reflects  the  investment we have made in the form of
additional  personnel  and  related  infrastructure  to  support general product
improvement in our Cryocare System, new product development efforts and clinical
costs  associated  with  the  Horizon  Prostatic  Stent.

Selling, general and administrative expense for the three months ended March 31,
2001  increased  14%  to  $3,024,000 compared to $2,660,000 for the three months
ended March 31, 2000. The increase reflects increased sales and marketing costs,
including  increased  sales  commissions,  associated  with  increased
commercialization  of  our  cryosurgical  product  for  prostate  cancer.

Interest  income  (expense),  net  for the three months ended March 31, 2001 was
$3,000  compared  to  $(325,000) for the three months ended March 31, 2000.  The
increase  was  due to increased interest income associated with a higher balance
of  cash  and  cash  equivalents  in 2001, partially offset by interest expense.

Our  net  loss  for  the three months ended March 31, 2001 was $2,342,000, or 15
cents per share on 15,154,000 weighted average shares outstanding, compared to a
net  loss  of  $3,014,000  or  27 cents per share on 11,300,000 weighted average
shares  outstanding  for  the  same  period  in  2000.  The decrease in net loss
resulted  from  increased  revenues  and  lower cost of sales as a percentage of
sales  and  increased  interest  income, partially offset by higher research and
development  and  selling,  general  and  administrative  expenses.

Liquidity  and  Capital  Resources

At March 31, 2001, our cash and cash equivalent balance was $18,303,000 compared
to $22,016,000  at  December  31,  2000.  The decrease was due primarily to cash
used by operating activities.  At March 31,  2001, our  net working capital  was
$17,478,000 and the ratio of current assets to current liabilities was  4  to 1.

For the three months ended March 31, 2001, net cash used by operating activities
was approximately $3,933,000 compared to $2,374,000 for the same period in 2000.
In  conjunction  with  the  increased  sales  of our Cryocare System and related
disposable  Cryoprobes for prostate cancer, inventory increased to $1,861,000 at
March 31, 2001, compared to $1,544,000 at the beginning of the year whereas, net
accounts  receivable  increased  to  $2,885,000  at  March 31, 2001, compared to
$2,114,000 at December 31, 2000.  Additions to property and equipment during the
first  three  months of 2001 were approximately $57,000.  Additionally, $43,000
of  inventory  was  transferred  to  property  and  equipment  in 2001 under our
cryosurgical placement program.  Working capital was used as current liabilities
decreased  to  $5,733,000  from  $6,401,000  at  December  31,  2000.

In  June  and  July  1999,  we  received  a total of $8,000,000 from the sale to
institutional investors of 7% convertible debentures due in three years from the
date  of  issuance.  During  the  second  quarter  of  2000,  the  $8,000,000 in
convertible debentures was converted into 1,475,610 shares of common stock under
the  terms  of  the  agreements.  Under  the  agreements,  the purchasers of the
convertible  debentures  had  options  to purchase additional debentures for the
aggregate  principal  amounts of $5,000,000 and $3,000,000 prior to June 7, 2002
and  July  29, 2002, respectively.  The additional debentures mature three years
from the date they are issued, bear interest at 7% per annum and are convertible
in whole or in part at a conversion price of $6.75 per share (subject to certain
anti-dilution  adjustments).  We  had  a put option to require the purchasers to
buy  the $5,000,000 principal amount of additional debentures if the closing bid
price for the common stock as listed for quotation is more that $10.00 per share
for the twenty (20) trading days in a consecutive thirty (30) trading day period
and  on  the  date  we  elect  to  exercise the put option, and if certain other
conditions are met.    We also had a put option to require the purchasers to buy
the  $3,000,000  principal  amount  of  additional debentures if the closing bid
price  for the common stock as listed for quotation is more that $9.00 per share
for twenty (20) trading days in a consecutive thirty (30) trading day period and
on the date we elect to exercise the put option, and if certain other conditions
are  met. On May 5, 2000, we received $8,000,000 from the sale of the additional
7%  convertible  debentures  to institutional investors pursuant to the purchase
options  discussed  above, of which $500,000 was converted into 74,074 shares of
common stock during the fourth quarter of 2000 and $1,000,000 was converted into
148,148  shares  of  common  stock  during  the  first  quarter  of  2001.

In  addition, in July 1999, we entered into a Loan and Security Agreement with a
lender,  which  originally provided for a revolving credit line in the amount of
$2,000,000  plus  up  to  an  additional  $1,000,000  based on eligible accounts
receivable.  In  April  2000,  we  increased the revolving portion of the credit
facility  from  $2,000,000 to $4,000,000, in addition to the $1,000,000 based on
eligible  accounts  receivable. As of March 31, 2001, $1,000,000 of the loan was
outstanding.  The  loan matures and all amounts must be repaid on July 31, 2001.
The  loan  bears  interest  at the highest prime or equivalent rate announced by
certain  designated  banks, plus 2% for the option of the loan based on eligible
account  receivables  or  3.5%.  The loan is secured by a first priority lien on
all  of  the  assets of our business, except for intellectual property, is fully
guaranteed  by  our subsidiary, AMP, and contains certain restrictive covenants.
We  expect  to  renew  or  replace  the  loan  upon  maturity.

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

We  believe  that  our  existing cash resources and credit facility will provide
sufficient  resources to meet present and reasonably foreseeable working capital
requirements  and other cash needs through at least the end of the first quarter
of  2002.  If  we  elect  to  undertake  or  accelerate significant research and
development  projects  for new products or pursue corporate acquisitions, we may
require  additional  outside  financing  prior  to  such  time.  There can be no
assurance  that  financing  will be available on terms acceptable or at all.  We
expect  that  to  meet  our  long-term  needs  we  may need to raise substantial
additional  funds  through  the sale of our equity securities, the incurrence of
indebtedness  or  through  funds  derived  through  entering  into collaborative
agreements  with  third  parties.  We also expect to renew or replace our credit
line,  which  expires  in  July  2001.

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

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

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

     We  have  incurred annual operating losses since inception.  For the fiscal
years ended December 31, 1998, 1999, 2000 and the three month period ended March
31,  2001, we had net losses of approximately $4.9 million, $9.3 million,  $12.4
million  and  $2.3 million, respectively.  As of March 31, 2001, our accumulated
deficit  was  approximately  $34.5  million.  We may not be able to successfully
develop  or  commercialize  our  current or future products, achieve significant
revenues  from  sales  or  procedures  or  achieve or sustain profitability.  We
expect  to  continue to incur operating losses because our products will require
substantial expenditures relating to, among other matters, development, clinical
testing,  regulatory  compliance, manufacturing and marketing.  If we do achieve
profitability,  we cannot be certain that we will be able to sustain or increase
profitability  on  a  quarterly  or  annual  basis  thereafter.

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

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

WE  MAY  NOT  BE  SUCCESSFUL  IN  DEVELOPING  OR  MARKETING  OUR  PRODUCTS

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

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

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

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

WE  HAVE  LIMITED  SALES  AND  MARKETING  EXPERIENCE

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

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

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

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

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

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

     We  may not be able to obtain effective patents to protect our technologies
from  use  by  other  companies  with competitive products, and patents of other
companies  could  prevent  us  from  developing  or marketing our products.  Our
success  will  depend,  to  a  significant  degree, on our ability to secure and
protect  intellectual  proprietary  rights  and  enforce  patent  and  trademark
protections relating to our technology.  While we believe that the protection of
patents or licenses is important to our business, we also rely on trade secrets,
know-how  and  continuing  technological  innovation to maintain our competitive
position. We cannot ensure that (1) we were the first to invent the technologies
covered  by our patents or pending patent applications, (2) we were the first to
file  patent  applications  for  these inventions, (3) any of our pending patent
applications  will  result  in issued patents, (4) others will not independently
develop  similar  or  alternative  technologies  or  duplicate  any  of  our
technologies,  (5)  our  patents  will  provide  a basis for commercially viable
products  or  will  provide  us  with  any  competitive  advantages, and (6) our
processes  or products do not or will not infringe patents or proprietary rights
of  others.  In  December  2000, we settled one patent infringement lawsuit that
was  initiated  by us,  We are currently involved in another patent infringement
lawsuit  initiated  by us in the U.S. District Court for the Central District of
California  against  a  competitor.  The  complaint seeks damages and injunctive
relief  to  prevent  this  competitor  from  marketing  cryosurgical systems and
components  incorporating  our  patented combination of cryo-cooling, ultrasound
and  temperature monitoring technology.  Counterclaims have been made against us
by  the  competitor  in  this  litigation  alleging that our cryosurgical system
infringes on the competitor's proprietary rights.  All proceedings in the action
were  stayed  by  the District Court on December 13, 2000 pending the outcome of
settlement  discussions  by  the  parties.  The parties are currently engaged in
settlement  discussions.  This  litigation and any other litigation necessary to
protect our patent position could be costly, and it is possible that we will not
have  sufficient  resources  to  fully  pursue this litigation or to protect our
other  patent  rights  and  could result in the rejection or invalidation of our
existing and future patents, if any.  If we are unsuccessful in this lawsuit our
competitors  may  be able to use certain of our cryosurgical systems technology.
This  outcome,  or any adverse outcome in litigation relating to the validity of
our  patents,  or any other failure to pursue litigation or otherwise to protect
our patent position, could materially harm our business and financial condition.
In  addition,  from  time  to  time,  we  have  received correspondence alleging
infringement  of  proprietary  rights  of  third  parties.  We  may  have to pay
substantial damages, possibly including treble damages, for past infringement if
it  is ultimately determined that our products infringe a third party's patents.
Further,  we  may  be  prohibited  from  selling our products before we obtain a
license,  which,  if  available  at  all,  may  require  us  to  pay substantial
royalties.  Even  if infringement claims against us are without merit, defending
a  lawsuit  takes  significant  time, may be expensive and may divert management
attention  from other business concerns.  We try to preserve the confidentiality
of  our  technology  by  entering  into  confidentiality  agreements  with  our
employees,  consultants,  customers,  and key vendors and by other means.  These
measures  may  not,  however, prevent the unauthorized disclosure or use of such
technology.  It  is possible that these agreements will be breached or that they
will  not  be  enforceable in every instance, and that we will not have adequate
remedies  for any such breach.  In addition, enforcement of these agreements may
be  costly  and  time  consuming.

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

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

WE  MAY  NEED  ADDITIONAL  LONG-TERM  FINANCING

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

WE  HAVE  LIMITED  MANUFACTURING  EXPERIENCE

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

WE  MAY  NEED  ADDITIONAL  LONG-TERM  FINANCING

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

WE  HAVE  LIMITED  MANUFACTURING  EXPERIENCE

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

GOVERNMENT  REGULATION  CAN  HAVE  A  SIGNIFICANT  IMPACT  ON  OUR  BUSINESS

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

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

WE  MAY  BE  NEGATIVELY  IMPACTED  BY  PRODUCT  LIABILITY  AND  PRODUCT  RECALL

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

WE  MAY  EXPERIENCE  FLUCTUATIONS  IN  OUR  FUTURE  OPERATING  RESULTS

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

OUR  BUSINESS  IS  EXPOSED  TO  RISKS  RELATED  TO  ACQUISITIONS  AND  MERGERS

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

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

OUR  COMMON  STOCK  HAS  A  LIMITED  MARKET  AND  TRADING  HISTORY

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

OUR  STOCK  PRICE  MAY  FLUCTUATE  SIGNIFICANTLY

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

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

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

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

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

CALIFORNIA  ENERGY  CRISIS

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




<PAGE>






ITEM  3.

                    QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK


Our  financial  instruments include cash, cash equivalents, notes receivable and
debentures.  At March 31, 2001, the carrying values of our financial instruments
approximated  their  fair  values.

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

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


<PAGE>



PART  II.  OTHER  INFORMATION

Item  1.     Legal  Proceedings

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

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

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

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



Item  2.     Changes  in  Securities
               None.


Item  3.     Defaults  Upon  Senior  Securities
               None.


Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders
               None.


Item  5.     Other  Information
               None


Item  6.     Exhibits  and  Reports  on  Form  8-K
               (a)  Reports  on  Form  8-K  --  None



                                      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.

Date:  May  11,  2001

ENDOCARE,  INC.

     By:  /s/  Paul  W.  Mikus
          Paul  W.  Mikus
          Chief  Executive  Officer  and  President
          (Duly  Authorized  Officer  )


     By:  /s/  William  R.  Hughes
          William  R.  Hughes
          Senior  Vice  President  and
          Chief  Financial  Officer
          (Principal  Financial  and  Accounting  Officer)