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, 2000
     or
[   ]     Transition  report  pursuant  to Section 13 or 15(d) of the Securities
Exchange  Act  of  1934

             For the transition period from __________ to __________

                         COMMISSION FILE NUMBER 0-27212


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

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

                     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  11,  2000  was  12,380,552.


<PAGE>



                                 ENDOCARE, INC.
                     FORM 10-Q, QUARTER ENDED MARCH 31, 2000
                                      INDEX

<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
          Part I. Financial Information
<S>       <C>                                                              <C>
Item 1..  Financial Statements (unaudited)

          Condensed Consolidated Statements of Operations for the
          three months ended March 31, 2000 and 1999                          3

          Condensed Consolidated Balance Sheets at March 31, 2000
          and December 31, 1999                                               4

          Condensed Consolidated Statements of Cash Flows for the
          three months ended March 31, 2000 and 1999                          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         17

          Part II. Other Information

Item 1    Legal Proceedings                                                  18

Item 2    Changes in Securities                                              18

Item 3    Defaults Upon Senior Securities                                    18

Item 4    Submission of Matters to a Vote of Security Holders                18

Item 5    Other Information                                                  18

Item 6    Exhibits and Reports on Form 8-K                                   18

Signature Page                                                               19
</TABLE>


<PAGE>
                          ITEM 1. FINANCIAL STATEMENTS


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

<TABLE>
<CAPTION>

                                               THREE MONTHS ENDED
                                                    MARCH  31,
                                              2000            1999
                                         ---------------  -------------
<S>                                      <C>              <C>
Revenues:
Net product sales . . . . . . . . . . .  $    1,137,910   $    397,317
Mobile cryosurgical procedures. . . . .         173,120        259,804
                                         ---------------  -------------
Total revenues. . . . . . . . . . . . .       1,311,030        657,121
                                         ---------------  -------------

Costs and expenses:
Cost of  product sales. . . . . . . . .         518,107        259,574
Cost of mobile cryosurgical procedures.          97,223         89,234
Research and development. . . . . . . .         723,708        531,292
Selling, general and administrative . .       2,660,430      1,671,986
                                         ---------------  -------------
Total costs and expenses. . . . . . . .       3,999,468      2,552,086
                                         ---------------  -------------

Loss from operations. . . . . . . . . .      (2,688,438)    (1,894,965)
Interest income (expense), net. . . . .     (   325,230)        51,288
                                         ---------------  -------------
Net loss. . . . . . . . . . . . . . . .  $   (3,013,668)  $ (1,843,677)
                                         ===============  =============

Net loss per share of common stock -
basic and diluted . . . . . . . . . . .  $        ( .27)  $      ( .17)
                                         ===============  =============

Weighted average shares of common stock
outstanding . . . . . . . . . . . . . .      11,299,878     10,714,000
                                         ===============  =============
</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,
                                                       2000          1999
                                                   (UNAUDITED)
                                                   ------------   -------------
                        ASSETS
<S>                                                  <C>             <C>
Current assets:
Cash and cash equivalents                          $ 5,122,936   $   7,364,951
Accounts receivable, net                               910,939         958,145
Inventories                                          1,362,723       1,278,785
Prepaid expenses and other current assets              174,861         166,969
                                                   ------------  --------------

Total current assets                                 7,571,459       9,768,850

Property and equipment, net                          1,108,241         962,720
Deferred financing costs and other assets, net       2,516,016       2,264,803
                                                   ------------  --------------

Total assets                                      $ 11,195,716   $  12,996,373
                                                  =============  ==============

        LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable                                  $  1,991,952   $    1,517,470
Accrued compensation                                   674,361         910,103
Other accrued liabilities                            1,164,008         896,210
                                                  -------------  --------------
Total current liabilities                            3,830,321       3,323,783

Convertible debentures                               8,000,000       8,000,000
Note payable and other liabilities                   2,140,803       2,153,082
                                                  -------------  --------------
Total liabilities                                   13,971,124      13,476,865

Shareholders' deficiency
Preferred stock, $.001 par value; 1,000,000 shares
authorized; none issued and outstanding                     --              --
Common Stock, $.001 par value; 11,384,030
and 11,248,323 issued and outstanding at
March 31, 2000 and December 31, 1999,
respectively                                            11,384          11,248
Additional paid-in capital                          21,028,628      20,310,010
Note receivable from stock sale                   (  1,028,125)     (1,028,125)
Accumulated deficit                                (22,787,295)    (19,773,625)
                                                  -------------  --------------
Total shareholders' deficiency                    (  2,775,408)       (480,492)
                                                 --------------  --------------

Subsequent events
Contingencies
Total liabilities and shareholders' deficiency   $  11,195,716   $  12,996,373
                                                 ==============  ==============
</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,
                                                     2000               1999
                                                   ------------    -------------
<S>                                                   <C>                <C>
Cash flows from operating activities:
Net loss. . . . . . . . . . . . . . . . . . .  $ (    3,013,668)  $ ( 1,843,677)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization . . . . . . . .            96,217          37,631
Amortization of warrant value . . . . . . . . .          96,761          34,761
Amortization of deferred financing costs. . . . .       188,335              --
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . .          47,206     (   258,563)
Inventories . . . . . . . . . . . . . . . . .    (      270,038)    (   600,255)
Prepaid expenses and other current assets . . . .(        7,892)    (   125,772)
Other assets. . . . . . . . . . . . . . . .      (        4,998)    (    47,499)
Accounts payable. . . . . . . . . . . . . . . . .       474,482         624,077
Accrued compensation. . . . . . . . . . . . . . .(      235,743)    (     2,275)
Other accrued liabilities . . . . . . . . . . . .       267,798         292,507
Deferred revenue and other. . . . . . . . . . . .(       12,280)             --
                                                  --------------    ------------
Net cash used in operating activities . . . . . .(    2,373,820)    ( 1,889,065)
                                                  --------------    ------------
Cash flows from investing activities:
Purchases of property and equipment . . . . . . .(       55,188)    (   148,850)
                                                  --------------    ------------
Net cash used in investing activities . . . . .  (       55,188)    (   148,850)
                                                  --------------    ------------
Cash flows from financing activities:
Issuance of common stock. . . . . . . . . . . . . .     186,993          20,854
                                                  --------------    ------------
Net cash provided by financing activities . . . .       186,993          20,854
                                                  --------------    ------------
Net decrease in cash and cash equivalents . . . .  (  2,242,015)    ( 2,017,061)
Cash and cash equivalents, beginning of period. .     7,364,951       6,285,800
                                                  --------------    ------------
Cash and cash equivalents, end of period. . . . . $   5,122,936    $  4,268,739
                                                   ============     ============
Non-cash activities:
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 . . . . . . . . .       186,100              --
                                                  -------------    -------------
Total non-cash activities . . . . . . . . . . . ..$     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.  (the  "Company" or "Endocare") is a medical device company that
develops,  manufactures  and  markets  cryosurgical  and  stent technologies for
applications  in oncology and urology. The Company has initially 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.     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, 1999.
Financial  results  for  this  interim  period are not necessarily indicative of
results  to  be  expected  for  the  full  year  2000.

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,
                      2000         1999
                 -----------    ----------

<S>                <C>         <C>
Inventories:
Raw materials . .  $  650,096  $   481,141
Work in process .     167,877      310,651
Finished goods. .     544,750      486,993
                   ----------  -----------

Total inventories  $1,362,723  $ 1,278,785
                   ==========  ===========
</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,  1999 and March 31, 2000 are
$(1,844,000),  10,714,000  $(0.17),  and  $(3,014,000),  11,300,000 and $(0.27),
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 3,449,800 and 5,038,000
for  the three months ended March 31, 1999 and 2000, 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.

The  results of operations previously reported by the separate companies and the
combined  amounts presented in the accompanying condensed consolidated financial
statements  are  summarized  below:

<TABLE>
<CAPTION>

                                                  Three Months Ended
                                                        March 31
                                                          1999
                                                   -----------------
<S>                                                       <C>
Net revenue:
Endocare
Net product sales                                    $     417,147
AMP
Mobile cryosurgical procedures                             259,804
Adjustments - elimination of intercompany activities   (     19,830)
                                                      --------------
Combined                                              $     657,121
                                                      ==============

Net Loss:
Endocare                                              $  (1,868,185)
AMP                                                          44,338
Adjustments - elimination of intercompany activities   (     19,830)
                                                      --------------
Combined                                              $  (1,843,677)
                                                      ==============
</TABLE>


     Adjustments  have  been  made  to  eliminate  the  impact  of  intercompany
activities  from  Endocare  to  AMP.  Procedural  revenue  is  recognized  upon
completion  of  procedures.

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 is  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 have 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  may  require  the  purchasers to exercise these
purchase  options.  The  $5,000,000  principal  amount of the Debentures must be
repaid  in full in cash on June 7, 2002, but may be converted 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 must be repaid in full in cash on July 29,
2002,  but  may be converted 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  are  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  may  require that the purchasers 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  is  above  $8.00  per share for twenty (20) trading days
during  a  consecutive  thirty  (30)  trading  day  period,  and  certain  other
conditions  are  met.  Subject  to  certain  restrictions,  the Company may also
require  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  is  above  $9.00  per share for twenty (20) trading days
during  a  consecutive  thirty  (30)  trading  day  period,  and  certain  other
conditions are met.  Subsequent to December 31, 1999, the share price conditions
have been met.

Under  a  securities  purchase  agreement,  the  purchasers  have  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  will  mature  three years from the date they are issued,
will bear interest at 7%  per annum and  will be convertible in whole or in part
at a conversion price  of  $6.75  per share  (subject  to  certain anti-dilution
adjustments).  The Company has 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 the Company elects to exercise the put option, and if certain other
conditions  are  met.  The purchasers also have a call option exercisable at any
time  prior  to July 29, 2002 to require that the Company sell to the purchasers
an  additional  $3,000,000  principal  amount  of  debentures.  The  additional
debentures  will  mature  three  years  from the date they are issued, will bear
interest  at  7%  per  annum  and will be 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 has 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  the  Company  elects  to  exercise  the put option, and certain other
conditions are met.  Subsequent to December 31, 1999, the share price conditions
have been met.

The  fair  value  of  the  purchasers' two call options described above totaling
$1,600,000,  has  been  estimated  using  the Black-Scholes pricing model and is
reflected  in  deferred  financing  costs  and  other assets in the accompanying
condensed  consolidated  balance  sheets  as  of December 31, 1999 and March 31,
2000.  This  amount is being amortized to interest expense over the lives of the
call  options.

     Credit  Facility

On  July 29, 1999, the Company entered into a Loan and Security agreement with a
lender  which  provides  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").  As of December 31, 1999 and March 31, 2000, $2,000,000 of
the  loan  is  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 portion 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 the Company, except for intellectual
property,  is fully guaranteed by the Company's subsidiary, and contains certain
restrictive  covenants.  The  Company  is  in  compliance  with  the restrictive
covenants  of  the  agreement  as  of  March  31,  2000.

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 Endocare 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,  Galil  Medical  USA,  Inc. and Cryomedical
Sciences,  Inc.  The  suits  filed  in  the  U.S. District Court for the Central
District  of  California,  allege  that  these  companies  have  begun marketing
cryosurgical  systems  and  components  that  incorporate  Endocare's  patented
temperature monitoring technology.  Endocare's suits seek damages and injunctive
relief  with  respect  to  products  which  are  found  to  infringe  Endocare's
proprietary  technology.  The  suits  are  in  the  early  stage  of  discovery.

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

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

10.     Subsequent  Events

On  May  5, 2000, the Company received $8,000,000 from the sale of additional 7%
convertible  debentures  to  institutional  investors  pursuant  to the purchase
options  discussed in Note 7 to the condensed consolidated financial statements.
The  same investors originally purchased $8,000,000 of convertible debentures in
1999.  In  April  2000,  $5,000,000  of  the  original $8,000,000 in convertible
debentures  sold  to  the investors in 1999 was converted into 975,609 shares of
common  stock  under  the  terms  of  the  original  agreement.

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.


<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,
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,  1999.

General

Endocare  is  a  fully-integrated  medical  device  company  that  develops,
manufactures and markets cryosurgical and stent technologies for applications in
oncology  and  urology.  The  Company  has  initially 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
its cryosurgical technologies for treating tumors in other organs, including the
kidney,  breast  and  liver.

On June 30, 1999, Endocare merged with Advanced Medical Procedures, LLC ("AMP"),
a company that operates a mobile cryosurgical business.  AMP provides urologists
and surgical specialists the option of utilizing Endocare's targeted cryosurgery
for  the treatment of prostate and liver cancer on a procedural basis.  Endocare
recognizes  procedural  revenue  upon  the  completion  of  procedures.  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.

Results  of  Operations

Product  revenue  for  the  three  months  ended  March 31, 2000 increased  187%
to $1,138,000  compared  to  $397,000  in  1999.  The  increase was attributable
primarily  to  the  third  quarter  1999  launch  of  the Company's cryosurgical
technology  in  conjunction  with  Medicare's  July  1,  1999  implementation of
national  coverage  for localized prostate cancer.  The Company also experienced
increased  general  surgery  system  sales  in  Asia  in  2000.

Revenue from mobile cryosurgical procedures for the three months ended March 31,
2000  decreased  33%  to  $173,000  compared  to $260,000 in 1999.  The decrease
corresponds  to  a  change  in  procedure  mix,  including  a reduction in liver
cryosurgical  procedures.

Gross  margin on product sales was 54% for the three months ended March 31, 2000
compared  to  35%  in  1999.  The  increase  is  due  to  a mix of higher margin
cryosurgical  probe and system sales in 2000 coupled with a reduction in product
costs  due  to  increased  manufacturing  efficiencies.

Gross  margin  on  mobile  cryosurgical  procedures was 44% for the three months
ended  March  31, 2000 compared to 66% in 1999.  The decrease is due to a change
in  procedure  mix,  including fewer higher margin cryosurgical liver procedures
performed  in  2000.

Research  and  development  expense  for  the  three months ended March 31, 2000
increased  36%  to $724,000  compared to $531,000 in 1999. The increase reflects
the  investment  the  Company  has  made in the form of additional personnel and
related  infrastructure  to  support  general  product  improvement, new product
development  efforts  and  clinical  costs associated with the Horizon Prostatic
Stent.

Selling, general and administrative expense for the three months ended March 31,
2000  increased  59%  to $2,660,000 compared to $1,672,000 in 1999. The increase
reflects  increased  sales  and  marketing  costs  associated with the launch of
Endocare's  cryosurgical  product  for prostate cancer and an almost doubling of
Endocare's  direct  sales  and  marketing  personnel  between  periods.

Interest  income  (expense),  net  for the three months ended March 31, 2000 was
$(325,000)  compared  to  $51,000  in  1999.  The  increase  was due to interest
expense, including the amortization of deferred financing costs, associated with
the issuance of debt in the middle of 1999, partially offset by interest income.

Endocare's net loss for the three months ended March 31, 2000 was $3,014,000, or
27  cents  per share on 11,300,000 weighted average shares outstanding, compared
to a net loss of $1,844,000 or 17 cents per share on 10,714,000 weighted average
shares  outstanding  for  the  same  period  in  1999.  The increase in net loss
resulted from higher research and development costs, higher selling, general and
administrative  expenses  and  increased  interest  expense  partially offset by
increased  revenues  and  lower  cost  of  sales.

Liquidity  and  Capital  Resources

At  March  31,  2000, Endocare's cash and cash equivalent balance was $5,123,000
compared  to  $7,365,000  at  December  31,  1999.

For the three months ended March 31, 2000, net cash used by operating activities
was approximately $2,374,000 compared to $1,890,000 for the same period in 1999.
Working  capital  has been used as Endocare's operations have increased in 2000.
Net  accounts receivable was $911,000 at March 31, 2000, compared to $958,000 at
December  31,  1999.  In  conjunction with the launch of Endocare's cryosurgical
technology  for  prostate cancer, inventory increased to $1,363,000 at March 31,
2000, compared to $1,279,000 at the beginning of the year. Additions to property
and  equipment during the first three months of 2000 were approximately $55,000.
Additionally, $186,000 of inventory was transferred to property and equipment in
2000  under  the  Company's cryosurgical placement program.  Working capital was
provided  as  accounts  payable  and  other  current  liabilities  increased  to
$3,830,000  from  $3,324,000  at  December  31,  1999.

At  March  31, 2000, Endocare's net working capital was $3,741,000 and the ratio
of  current  assets  to  current  liabilities  was  2  to  1.

In  June and July 1999, Endocare received a total of $8,000,000 from the sale of
its  7%  convertible  debentures  which are due in three years.  In addition, in
July 1999, the Company entered into a Loan and Security Agreement which provides
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").
As  of  March 31, 2000, $2,000,000 of the Loan is 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%
or  3.5%.  The  Loan is secured by a first priority lien on all of the assets of
the  Company,  except  for  intellectual  property,  is  fully guaranteed by the
Company's subsidiary, and contains certain restrictive covenants.  Subsequent to
March  31,  2000, the Company received an additional $8,000,000 through the sale
of  its 7% convertible debentures which are due in three years and increased its
credit  facility  to  $5,000,000.  Additionally,  $5,000,000  of  the  original
$8,000,000 in convertible debentures sold to the investors in 1999 was converted
into  975,609 shares of common stock under the terms of the original agreement.

The  Company expects to incur operating losses because its products will require
substantial  expenditures relating to among other matters, development, clinical
testing,  regulatory  compliance,  manufacturing  and  marketing.  However,  the
Company  believes  that  its  existing  cash  resources and credit facility will
provide  sufficient resources to meet present and reasonably foreseeable working
capital  requirements  and  other  cash needs for the next year.  If the Company
elects  to undertake or accelerate significant research and development projects
for  new  products  or  pursue corporate acquisitions, it may require additional
outside  financing  prior  to  such  time.  The Company expects that to meet its
long-term  needs  it will need to raise substantial additional funds through the
sale  of  its equity securities, the incurrence of indebtedness or through funds
derived  through  entering  into  collaborative  agreements  with third parties.

Other  Matters

Accounting  Principles

In  June  1998,  the  Financial  Accounting  Standards  Board,  or  FASB, issued
Statement  of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments  and  Hedging Activities."  The Statement establishes accounting and
reporting standards for derivative financial instruments and hedging activities.
Under  the standard, entities must recognize all derivitives as either assets or
liabilities in the statement of financial position and measure those instruments
at  fair value.  In June 1999, the FASB issued Statement of Financial Accounting
Standards  No.  137,  "Accounting  for  Derivative  Instruments  and  Hedging
Activities-Deferral  of the Effective Date of FASB Statement No. 133 - amendment
of  FASB Statement No. 133."  SFAS No. 137 delays the effective date of SFAS No.
133  to  fiscal  quarters  and  fiscal years beginning after June 15, 2000.  The
Company  does  not  typically  enter into arrangements that would fall under the
scope  of Statement No. 133.  Therefore, the Company believes that Statement No.
133  will  not  significantly  affect  its  financial  condition  and results of
operations.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements," which was
amended by SAB NO. 101A in March 2000.  SAB 101A delayed the implementation date
of  SAB  No.  101.  These  SAB's,  which  provides  guidance on the recognition,
presentation and disclosure of revenue in financial statements, are effective in
the  second  quarter  of 2000.  The Company is currently assessing the impact of
adoption  on  its  consolidated  financial  statements.

Factors  that  May  Affect  Future  Results  and  Trading  Price of Common Stock

Before  deciding  to  invest  in  the  Company,  or to maintain or increase your
investment, you should carefully consider the risks described below, in addition
to the other information in this report and our other filings with the SEC.  The
risks  and  uncertainties  described  below  are  not  the  only ones facing the
Company.  Additional  risks  and uncertainties not presently known to us or that
we currently deem immaterial may also affect our business operations.  If any of
these  risks  actually  occur,  our  business, financial condition or results of
operations  could  be seriously harmed.  In that event, the market price for our
common  stock  could  decline  and  you may lose all or part of your investment.

We  have  only 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,  1997, 1998 and 1999 and the three month period ended March
31,  2000,  we had net losses of approximately $4.0 million,  $4.9 million, $9.3
million  and  $3.0 million, respectively.  As of March 31, 2000, our accumulated
deficit  was  approximately  $22.8  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.

Our  products  may  not  achieve market acceptance, which could limit our future
revenue.  Certain  of  our  products,  including our Cryocare System, are in the
early  stages  of  market  introduction.  Our  products  may  not be accepted by
potential  customers.  We  believe  that  recommendations  and  endorsements  of
physicians  and patients and sufficient reimbursement by health care payers will
be  essential  for  market acceptance of our Cryocare System and other products,
and  these  recommendations  and endorsements may not be obtained and sufficient
reimbursement  may  not be forthcoming.  Cryosurgery has existed for many years,
but  has  not been widely accepted due to concerns regarding safety and efficacy
of  first  generation  technologies, limited reimbursement by third party payers
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 stents are in
pre-clinical studies or clinical trials and have 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 reimbursement 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.  National Medicare reimbursement rates are in
the  process  of  being  established  for  certain  uses  of our Cryocare System
product.  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.  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.

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

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

We  believe  that, to become and remain competitive, we will need to continue to
develop 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  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  property rights relating to our technology.  While we believe that
the protection of patents or licenses is important to our business, we also rely
on  trade  secrets, know-how and continuing technological innovation to maintain
our competitive position.  We cannot ensure that (1) we were the first to invent
the  technologies  covered by our patents or pending patent applications, (2) we
were  the first to file patent applications for these inventions, (3) any of our
pending  patent  applications will result in issued patents, (4) others will not
independently  develop  similar  or alternative technologies or duplicate any of
our  technologies,  (5) our patents will provide a basis for commercially viable
products  or  will  provide  us  with  any  competitive  advantages, and (6) our
processes  or products do not or will not infringe patents or proprietary rights
of  others.  We  have  recently  filed complaints for patent infringement in the
U.S.  District  Court  for  the  Central  District  of  California  against  two
competitors.  The complaints seek damages and injunctive relief to prevent these
competitors from marketing cryosurgical systems and components incorporating our
patented  temperature  monitoring  technology.  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.  If we are unsuccessful in
these  lawsuits,  our  competitors may be able to use our temperature monitoring
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.

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.

If  we  are  unable  to  obtain  additional  capital to fund our operations when
needed, our product development efforts would be adversely affected, causing our
business,  operating results, financial condition and prospects to be materially
harmed.  If  we  undertake  or  accelerate  significant research and development
projects  for  new  products  or  pursue  corporate acquisitions, we may require
additional  outside  financing.  We expect that, to meet our long-term needs, we
will  need  to raise substantial additional funds through the sale of our equity
securities  or  the  incurrence  of  additional  debt  or  through collaborative
arrangements.  Any  additional equity financing may be dilutive to shareholders,
and  debt  financing,  if  available,  may  involve  restrictive  covenants.
Collaborative  arrangements, if necessary to raise additional funds, may require
us  to  relinquish  rights to certain of our technologies, products or marketing
territories.  Our  failure to raise capital when needed could have a significant
negative  effect  on  our  business,  operating results, financial condition and
prospects.

We  have  limited  manufacturing  experience.  We  have  limited  experience  in
producing  our products in commercial quantities.  Manufacturers often encounter
difficulties  in  scaling  up  production  of  new  products, including problems
involving production yields, quality control and assurance, component supply and
shortages  of  qualified personnel.  Our failure to overcome these manufacturing
problems  could  negatively impact our business and financial condition.  We use
internal  manufacturing  capacity  in our manufacturing efforts.  Certain of our
purchased  components and processes are currently available from or performed by
a single vendor.  Any supply interruption from a single source vendor would have
a significant negative effect on our ability to manufacture our products until a
new  source  of  supply  is qualified and, as a result, could have a significant
negative  effect  on our business and financial condition.  Further, the ability
of  third  party  manufacturing  sources  to  deliver components will affect our
ability to commercialize our products, and our dependence on third party sources
may  have  a  negative  effect on our profit margins. 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.

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

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

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

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  that of Advanced Medical Procedures or 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.

If  we fail to satisfy the continued listing requirements of the 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 has a limited trading history.  We have
applied  for  listing  of  our  common  stock on the Nasdaq National Market, but
currently  have  not  yet  been  approved for trading on that market.  If we are
unable to maintain the standards for quotation on the Nasdaq SmallCap Market (or
the Nasdaq National Market, if approved), 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,  making it difficult to resell
shares  when  an  investor  wants to at prices they find attractive.  The market
prices  for  securities  of  emerging  companies  have  historically been highly
volatile.  Future  announcements  concerning  us  or our competitors could cause
such  volatility including:  our operating results, technological innovations or
new  commercial  products,  corporate  collaborations,  government  regulation,
developments  concerning  proprietary rights, litigation or public concern as to
the  safety  of  our  products,  investor perception of us and our industry, and
general  economic  and  market  conditions.  In  addition,  the  stock market is
subject  to  price  and  volume  fluctuations  that affect the market prices for
companies  in  general,  and  small-capitalization, high technology companies in
particular,  which  are  often  unrelated  to the operating performance of these
companies.

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

Anti-takeover  provisions  in our charter may have a possible negative effect on
our  stock  price.  Certain  provisions  of our Certificate of Incorporation and
Bylaws  may  have  the  effect  of making it more difficult for a third party to
acquire, or of discouraging a third party from attempting to acquire, control of
us.  In  March 1999, our board of directors adopted a stockholder rights plan in
which  preferred  stock  purchase  rights were distributed as a dividend.  These
provisions may make it more difficult for stockholders to take certain corporate
actions  and  may have the effect of delaying or preventing a change in control.
Such provisions could limit the price that certain investors might be willing to
pay  in  the  future  for  shares  of  our  common  stock.

Some  of  the  information  in  this  report contains forward-looking statements
within  the  meaning  of  the  federal  securities  laws.  These forward-looking
statements  include  statements  about  our  plans, objectives, expectations and
intentions and other statements contained in this report that are not historical
facts.  You  can  find  these  statements  under "Factors That May Affect Future
Results  and  Trading,"  "Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results of Operations" and elsewhere in this report and in other
documents  filed  with  the  SEC.

We  typically use terms such as "may," "will," "expect," "anticipate," "intend,"
"plan,"  "believe,"  "seek"  and  "estimate"  and  similar  words  to  identify
forward-looking  statements, although we express some forward-looking statements
differently.  You should  be  aware that these statements are not guarantees of
future  performance and are subject to certain risks and uncertainties, some  of
which  are beyond our control and are difficult to predict, and that our  actual
results  could  differ  materially  from  those  expressed or forecasted in the
forward-looking statements due to a number of factors, including:

-     failure  to  successfully  commercialize  our  products

-     failure  to  develop  new  products

-     competitive  factors

-     general  economic  conditions

-     failure  to  achieve  positive  results  in  clinical  trials

-     uncertainty  regarding  our  patents and patent rights and costs of patent
      litigation  (including  the  material  harm  to  us if there  were  an
      unfavorable outcome  of  any  such  litigation)

-     government  regulation

-     technological  change

You should also consider carefully the statements under "Factors That May Affect
Future  Results  and Trading" and other sections of this report and in the other
documents  filed with the SEC, which address additional factors that could cause
our  actual  results  to  differ  from  those  set  forth in the forward-looking
statements.  You  should  not  place  undue  reliance  on our forwarding-looking
statements,  which  reflect  our  management's  view only as of the date of this
report.  We  have  no  plans  to  update  these  forward-looking  statements.

<PAGE>

ITEM  3.


                    QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK

The  Company's  financial  instruments  include cash, cash equivalents and notes
receivable.  At March 31, 2000, the carrying values of its financial instruments
approximated  their  fair  values.

The Company's policy is not to enter into derivative financial instruments.  The
Company  does  not  have any significant foreign currency exposure since it does
not  transact  business  in foreign currencies.  Therefore, the Company does not
have  significant  overall currency exposure.  In addition, the Company does not
enter  into  any  futures  or  forward  contracts and therefore it does not have
significant  market  risk  exposure  with  respect  to  commodity  prices.

The  Company  maintains  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  the  Company's  only debt which does not have a
fixed-rate  of  interest.  A  significant  change  in  interest  rates would not
materially  impact  the Company's consolidated financial statements.  The credit
facility  expires  in  July  2001.

<PAGE>

PART  II.  OTHER  INFORMATION

Item  1.     Legal  Proceedings

In  March,  2000,  the  Company  filed  patent  infringement  lawsuits  against
Israeli-based  Galil  Medical,  Ltd,  Galil  Medical  USA,  Inc. and Cryomedical
Sciences,  Inc.  The  suits  filed  in  the  U.S. District Court for the Central
District  of  California,  allege  that  these  companies  have  begun marketing
cryosurgical  systems  and  components  that  incorporate the Company's patented
temperature  monitoring  technology.  The  Company's  suits  seek  damages  and
injunctive  relief  with  respect  to  products  which are found to infringe the
Company's  proprietary  technology.  The  suits  are  in  the  early  stage  of
discovery.

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

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

Item  2.     Changes  in  Securities

     Stock  Options

During  the  period  from  January  1,  2000 through March 31, 2000, the Company
granted  stock options to 48 individuals covering an aggregate of 242,500 shares
of  its  common stock. All such options were granted at exercise prices equaling
fair  market  value  on the date of grant, vest over a four year period, and are
exercisable  over  a ten year period.  No consideration was paid for any of such
options.  Such  grants  were  exempt  from  the  registration requirement of the
Securities  Act  as  not  involving  the  sale  of  a  security.

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)     Exhibits

               Exhibit  27  -  Financial  Data  Schedule

     (b)     Reports  on  Form  8-K  --  None


<PAGE>



                                   SIGNATURES

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

Date:  May  12,  2000

                                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)


<PAGE>