UNITED
          STATES
        SECURITIES
          AND EXCHANGE COMMISSION
        WASHINGTON,
          D.C. 20549
        FORM.
          10-QSB
        [ X ] QUARTERLY
          REPORTS UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
          1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2002.
        OR
        [ ] QUARTERLY REPORTS
          UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR
          THE TRANSITION PERIOD FROM ____________ TO ______________.
        Commission File No. 0-19844
          ------------------------------------------------
        PARACELSIAN,
          INC.
          ------------------------------------------------------(Exact
          name of small business issuer as specified in its charter)


Delaware
      
      16-1399565-----------------------------
      
      --------------------------(State
          or other jurisdiction of incorporation or organization)
      
      (I.R.S.
          Employer Identification No.)222
          Langmuir Laboratories, 
          Cornell Technology Park, Ithaca, New York
      
      14850--------------------------------------------------------------------------------------
      
      -------------------(Address
          of principal executive offices)
      
      Zip
          CodeIssuer's
          telephone number: (607) 257-4224
          --------------------------------------------------------------------


Check
          whether the issuer (1) filed all reports required to be filed by Section
          13 or 15(d) of the Securities Exchange Act during the past 12 months
          (or for such shorter period that the registrant was required to file
          such reports), and (2) has been subject to such filing requirements
          for the past 90 days.
        Yes
          [  ] No [ X ]
        There
          were 23,954,888 shares of Common Stock outstanding at June 15, 2002
        
        (PAGE
          1)
        Paracelsian,
          Inc. and Subsidiary
        IndexPagePART I. - FINANCIAL
          INFORMATION
        Item 1.  Financial
          StatementsConsolidated Balance
          Sheet as of March 31, 2002 (Unaudited)
      3Consolidated Statements
          of Operations for the six months ended March 31, 2002
          and 2001 and the cumulative period from inception to March 31, 2002
          (Unaudited)
      4Consolidated Statements
          of Cash Flows for the six months ended March 31, 2002 and 2001 and the
          cumulative period from inception to March 31, 2002 (Unaudited)
      5Notes to Consolidated
          Financial Statements (Unaudited)
      6Item. 2 
          Managements Discussion and Analysis of Financial Condition and
          Results of Operations
      9PART II 
          OTHER INFORMATIONItem 1  Legal
          Proceedings
      10Item 6  Exhibits
          and Reports of Form 8-K
      11Signatures
      11




Paracelsian,
          Inc. and Subsidiary
          (A Development Stage Company)
          Consolidated Balance Sheet
          March 31, 2002
          (Unaudited)


March
          31, 2002AssetsCurrent Assets:Cash and cash equivalents
      $
      87,914Prepaid expenses
      
      14,465Other current assets
      
      5,975Total
        current assets
      
      108,354Equipment, net
      
      38,918Interest Receivable,
          net of reserve of $62,465
      
      -Note Receivable,
          net of reserve of $148,750
      
      -Other Assets:Patents and trademarks,
          net
      
      75,820114,738$
      223,092Liabilities
          and Stockholders' DeficitCurrent Liabilities:Accounts payable
      $
      351,329Accrued expenses
      
      656,083Current portion
          of capital lease obligation
      
      -Current portion
          of notes payable
      
      169,634Current
        portion of deferred revenue
      
      29,976Advances from related
          party
      
      310,677Total
        current liabilities
      
      1,517,699Long-term portion
          of capital lease obligation
      
      -Long-term
        portion of notes payable
      
      6,538Long-term
        portion of deferred revenue
      
      204,284Other
        long-term liabilities
      
      309,273Total
        current and long-term liabilities
      
      2,037,794Stockholders' DeficitCommon Stock, $.01
          par value; 35,000,000 shares authorized; 23,954,888 shares outstanding
      
      239,549Additional paid-in-capital
      
      25,627,844Deficit accumulated
          during the development stage
      
      (26,339,580)Treasury stock,
          at cost; 265,478 shares
      
      (1,342,515)Total
        stockholders' deficit
      
      (1,814,702)$
      223,092See
        accompanying notes to consolidated financial statements. (PAGE 3)  Paracelsian,
          Inc. and Subsidiary
          (A Development Stage Company)
          Consolidated Statement of Operations
          For the six months ended March 31, 2002 and 2001,
          and the cumulative period from inception to March 31, 2002 (Unaudited)Three
          months ended
          March 31,
      
      Six
          months ended
          March 31,
      
      Cumulative
          Period from Inception
          to March 31,2002
      
      2001
      
      2002
      
      2001
      
      2002Revenues:Marketing
        rights - Ah-IMMUNOASSAY®
      
      69,035
      
      59,866
      
      161,138
      
      123,121
      
      1,153,104Products
      
      1,026
      
      2,964
      
      2,608
      
      7,162
      
      261,827Product testing
      
      -
      
      5,614
      
      -
      
      5,614
      
      169,977Product royalties
      
      -
      
      -
      
      -
      
      -
      
      1,246Subscription revenue
      
      -
      
      -
      
      -
      
      -
      
      31,625Total
        Revenues
      
      70,061
      
      68,444
      
      163,746
      
      135,897
      
      1,617,779Operating expenses:Research and product
          engineering
      
      51,555
      
      132,751
      
      13,767
      
      255,696
      
      9,467,845General and administrative
      
      160,514
      
      190,928
      
      341,039
      
      448,574
      
      16,181,781Product launch
          costs
      
      -
      
      -
      
      -
      
      -
      
      300,544Cost of products
          sold
      
      11,553
      
      357
      
      20,684
      
      1,752
      
      337,273Total
        Operating expenses
      
      223,622
      
      324,036
      
      375,490
      
      706,022
      
      26,287,443Loss from operations
          during the development stage
      
      (153,561)
      
      (255,592)
      
      (211,744)
      
      (570,125)
      
      (24,669,664)Other
        income
      
      9,000
      
      -
      
      18,000
      
      -
      
      18,000Interest income
          (expenses) net
      
      (13,940)
      
      (2,849)
      
      (25,155)
      
      (3,035)
      
      414,861Gain (loss) on
          sale of assets
      
      (653)
      
      -
      
      695
      
      -
      
      25,223Net loss during
          the development stage
      
      (159,154)
      
      (258,441)
      
      (218,204)
      
      (573,160)
      
      (24,211,580)Net loss per weighted
          share of common stock - Basic and Diluted
      
      (0.01)
      
      (0.01)
      
      (0.01)
      
      (0.02)Weighted average
          number of Common Shares outstanding
      
      23,936,188
      
      23,492,182
      
      23,932,751
      
      23,491,500


(PAGE 4)



Paracelsian,
          Inc. and Subsidiary(A Development Stage Company) 
          Consolidated Statements of Cash Flows
          For the six months ended March 31, 2002 and 2001,
          and the cumulative period from inception to March 31, 2002
          (Unaudited)CumulativePeriod
          fromSix
          Months Ended
      
      Inception
          toMarch
          31 ,
      
      March
          31 ,2002
      
      2001
      
      2002Cash
        flows from operating activities:Net loss
      
      (218,204)
      
      (573,160)
      
      (24,211,580)Adjustments to
          reconcile net loss to net cash used in operating activities:Gain on the sale
          of assets
      
      (1,348)
      
      -
      
      (25,876)Non-cash compensation
          expense
      
      -
      
      -
      
      1,619,657Other non-cash
          expenses
      
      (72,741)
      
      -
      
      1,882,015Depreciation and
          amortization
      
      20,506
      
      41,466
      
      2,430,854Write
        off of patents and trademarks
      
      
      
      
      
      160,363Contributed
        capital
      
      
      
      
      
      80,000Write
        off of note and interest receivable
      
      
      
      
      
      359,965Deferred revenue
      
      115,014
      
      -
      
      539,262Changes in operating
          assets and liabilities:Interest
        receivable
      
      -
      
      (19,135)
      
      (62,465)Inventories
      
      -
      
      926
      
      -Prepaid expenses
          and other current assets
      
      15,720
      
      (46,528)
      
      (20,440)Accounts payable
      
      (1,914)
      
      103,782
      
      351,804Accrued expenses
      
      40,106
      
      168,569
      
      733,097Net
        cash used in operating activities:
      
      (102,861)
      
      (324,100)
      
      (16,163,344)Cash
        flows from investing activities:Purchase
        of equipment
      
      (1,462)
      
      (3,805)
      
      (742,180)Proceeds
        from sale of equipment
      
      5,134
      
      -
      
      42,962Acquisition
        of licensed technology
      
      -
      
      -
      
      (53,656)Acquisition
        of patents and trademarks
      
      (19,312)
      
      (3,547)
      
      (526,796)Acquisition
        of New Century Nutrition newsletter
      
      -
      
      -
      
      (350,000)Acquisition
        of option for East West Herbs, Ltd. and related acquisition costs
      
      -
      
      -
      
      (92,866)Loan
        to East West Herbs, Ltd.
      
      -
      
      -
      
      (340,000)Payment
        from East West Herbs, Ltd.
      
      -
      
      -
      
      42,500Net
        cash used in investing activities
      
      (15,640)
      
      (7,352)
      
      (2,020,036)Cash
        flows from financing activities:Sale
        of common stock, initial public offering, net of costs
      
      -
      
      -
      
      5,124,014Sale
        of common and preferred stock, net of costs
      
      -
      
      -
      
      11,776,088Proceeds
        from the sale of common stock
      
      -
      
      -
      
      500,000Proceeds
        from the exercise of warrants
      
      -
      
      -
      
      1,219,640Proceeds
        from the exercise of options
      
      -
      
      -
      
      68,900Termination
        of warrants
      
      
      
      
      
      -Purchase
        of treasury stock
      
      -
      
      -
      
      (1,342,515)Cost
        of warrant dividend
      
      -
      
      -
      
      (63,102)Increase
        in capital lease obligations and notes payable
      
      -
      
      -
      
      31,212Payment
        on capital lease obligations
      
      (96)
      
      -
      
      (29,792)Proceeds
        from advances from related party
      
      -
      
      -
      
      916,150Payments
        on advances from related party
      
      -
      
      -
      
      (105,473)Increase
        in notes payable
      
      43,565
      
      109,075
      
      176,172Net
        cash provided by financing activities
      
      43,469
      
      109,075
      
      18,271,294Net
        increase (decrease) in cash and cash equivalents
      
      (75,032)
      
      (222,377)
      
      87,914Cash
        and cash equivalents, beginning of period
      
      162,946
      
      227,123
      
      -Cash
        and cash equivalents, end of period
      $
      87,914
      
      4,746
      
      87,914


(PAGE 5)



|Paracelsian,
          Inc. and Subsidiary(A
          Development Stage Company)

      NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS 
        March 31, 2002
        (Unaudited)
        1.	BASIS OF
          PRESENTATION:

      The unaudited consolidated
        financial statements included herein have been prepared in accordance
        with accounting principles generally accepted in the United States of
        America, pursuant to the rules and regulations of the Securities and Exchange
        Commission applicable to quarterly reporting on Form 10-QSB and reflect,
        in the opinion of the Company, all adjustments necessary to present fairly
        the financial position and results of operations for Paracelsian, Inc.
        and its consolidated subsidiary. All such adjustments are of a normal
        and recurring nature. The results of operations for the six month period
        ended March 31, 2002 are not necessarily indicative of the results to
        be expected for the full year. Certain information and footnote disclosures
        normally included in financial statements, prepared in accordance with
        accounting principles generally accepted in the United States of America,
        have been condensed or omitted as permitted by such regulations. These
        unaudited consolidated financial statements and related notes should be
        read in conjunction with the consolidated financial statements and related
        notes included in the Company's Annual Report on Form 10-KSB for the fiscal
        year ended September 30, 2001.

      (PAGE
        6)
      2. ORGANIZATION,
        BUSINESS, AND RISK FACTORS: Organization and Business
        Paracelsian is
          a development stage company, which develops and applies bioassays to
          monitor environmental toxins, to determine the quality of herbal products,
          and to identify therapeutic compounds from herbal sources (www.paracelsian.com).

      The Company has developed
        a highly sensitive, user friendly, cost effective testing system for the
        detection and quantification of highly toxic environmental chemicals generally
        known as dioxin and dioxin-like compounds. It is called the Ah-IMMUNOASSAY®
        Kit (AH-I Method).
        Since the discovery
          of the dioxin compounds, during the late 1950s, extensive research
          has been undertaken into their chemical and biological properties. And
          as more information becomes available, it is now clear that the original
          and narrowly defined group of dioxins is becoming more expansive
          to include many other highly toxic, chemically similar compounds.
        Dioxin, although
          singular in name, is actually comprised of at least 17 chemical variants
          or congeners of a larger dioxin family. These chemicals are highly toxic,
          with the most active congener (TCDD) being the most toxic chemical ever
          discovered. The number of chemicals with dioxin-like activity is even
          much larger still than the 17 original polychlorodibenzo-p-dioxin (PCDD)
          families, such as the polychlorodibenzofurans (PCDF), the polychlorinated
          biphenyls (PCBs), the polybrominated biphenyls (PBBs), the polycyclic
          aromatic hydrocarbons (PAHs), the heterocyclic amines (HAs), among others.
        Probably no other
          group of chemicals has invoked more public health concern and received
          more media attention than these dioxin and dioxin-like substances, both
          because of their widespread distribution and their capability for serious
          toxicity (e.g., cancer, birth defects, diabetes, hormone disruption,
          immunologic dysfunction, etc.). The Environmental Protection Agency
          (EPA) of the United States has concluded, for example, that more than
          100 of these dioxins and dioxin-like chemicals are likely human carcinogens.
        Waste incineration
          is a major source of these chemicals. Paper mill bleaching and varied
          industrial syntheses also add significant amounts to the environment.
          Following release into the air, perhaps also into waste water or sludge,
          these chemicals then settle on plant material, soil, and water where
          they are likely to persist for very long periods of time. As a consequence,
          they tend to accumulate either onto particulate matter (such as found
          at the bottom of bodies of water), or into body fat reservoirs of animals
          and fishes which feed on the plants. And because of their stability
          and persistence, these chemicals accumulate to relatively high levels
          in animal based foods.
        Investigating the
          distribution and toxicities of these chemicals has been challenging,
          both because of the ever-growing number of chemicals with dioxin-like
          activity and the difficulty of predicting toxicities. Because of these
          complexities, analysis of these chemicals has been very expensive, with
          the results being difficult to interpret.

      More recently, simpler
        analytical methods have been developed, such as the AH-I Method, based
        on the use of biologically based concepts. Dioxins and dioxin-like chemicals
        (also called ligands), enter the cell and bind to a protein in the cytoplasm
        called Ah receptor (AhR), thus giving a ligand-AhR complex. This complex,
        by dropping and adding some smaller proteins (e.g., AhR translocator or
        ARNT, hsp-90 protein) is said to be transformed, thus enabling
        it to enter the nucleus to bind to a specific dioxin receptor element
        (or enhancer) (DRE) of DNA. This interaction with DNA occurs upstream
        of genes which then are activated to produce certain enzymes, some of
        which are highly correlated with the subsequent toxicity.
        The AH-I Method
          takes advantage of these facts. It is generally acknowledged, for example,
          that AhR binding appears to be essential for the development of toxicity
          by these chemicals. It is as if ligand binding of AhR is the main traffic
          intersection through which these chemicals pass on their way to produce
          their respective toxicities.
        In the AH-I Method,
          where an excess of AhR protein is provided, the amount of AhR-ligand
          complex that transforms is dependent on the amount of dioxin ligand
          present in the sample being assayed. The amount of the transformed complex
          is detected by using an antibody specific for the Ah-I protein component
          of the complex, thus giving the Immunoassay name to the
          method. (For the scientifically minded reader, there really are two
          antibodies: the first interacts with the ARNT protein in the complex
          while the second, containing an enzyme that catalyzes the formation
          of the color reaction, binds to the first antibody. The color being
          produced in the reaction shows how much of the complex is present.).

      Dioxin is a toxic
        chemical group of widespread public health concern, and more information
        is needed, especially on the distribution of this material in the environment.
        More survey data are needed not only to identify potential hot spots
        but also to allay unwarranted concerns. Until now, such survey work has
        been prohibitively expensive, but with the introduction of simpler and
        much more cost effective bioassay methods, such as the AH-I Method, it
        is now possible to gather far more information in order to make wiser
        decisions.
        The herbal supplement
          market presents the opportunity to commercialize a quality assurance
          program that identifies the bioactivity present in herbal products,
          which are complex mixtures of substances. This product is a significant
          advance versus current practices for verifying the quality and the bioactivity
          of herbal products. This is the Companys BioFITTM Quality
          Assurance Certification Program.
        Typically, the
          Company will investigate the effect of a compound or mixture of compounds
          on a disease (such as cancer) or a symptom (such as depression). The
          Company scientists conduct in depth research of the scientific literature
          and review the results of successful clinical trials to establish the
          best scientific explanation for the positive results seen in such trials.
          Based on their review, they identify the biological mechanism which,
          if activated, would best explain the positive clinical results. By defining
          such mechanisms of action associated with a wide variety of biological
          effects the Company scientists can then test a wide variety of natural
          materials in "in vitro" models which demonstrate these effects
          for the purpose of either discovering or confirming these biological
          activities. Such discovery or confirmation provides the Company with
          the basis for its BioFITTM Program.
        The Company is
          continuing to work with its Chinese colleagues, during the appropriate
          market conditions, to expand the scope of the BioFITTM program
          to the rest of the world.

      The Company is engaged
        in an internet-based health exchange between the US and China and currently
        maintains the website www.newcenturynutrition.com. The Company has excellent
        relations with recognized health authorities and organizations within
        the Peoples Republic of China. This website serves to provide a
        forum for the exchange of nutrition, health and related information. Renowned
        researchers, teachers, and physicians from the East and West can discuss
        their philosophies, research findings, or health advice to enrich readers.
        Also included are herbal databases from China offering in depth descriptions
        of single herbs or herbal formulas and a nutrition resource center featuring
        healthy recipes. Our goal is to combine the best of Chinese medical practice
        with the best of Western practice creating new opportunities for information
        on health and disease prevention.
      The Company has a
        10 year agreement with Kubota Corporation (Kubota) of Japan that establishes
        Kubota as the exclusive marketing and distribution agent for Paracelsian's
        Ah-IMMUNOASSAY® Environmental Certification program in Japan. For
        the six month period ended March 31, 2002, the Company recognized approximately
        $15,000 in license revenue under this agreement.
      The Company has a
        License Revocation Agreement with Dow Chemical Company (DOW) that modified
        the entirety of the License Agreement dated January 19, 1995. Under the
        agreement the Company agreed to pay DOW 10% of all sublicense fees of
        the proprietary information which formed the basis of the License Agreement
        and 10% of any sales of any products derived from the proprietary information
        which are the subject of the License Agreement. The maximum total value
        for any and all such payments shall not exceed $250,000. As of March 31,
        2002, $72,475 has been accrued as payments due under this agreement.
      The Company has signed
        an Exclusive License Agreement with the Cornell Research Foundation, Inc.
        (CRF) for the exclusive license to make, have made, use or sell Licensed
        Products throughout the world. This agreement pertains to the manufacture
        and sales of Paracelsian's Ah-IMMUNOASSAY® Kits. This agreement stipulates
        that Paracelsian will pay to CRF a royalty of 3% of any sales of the Kits.
        As of March 31, 2002, $12,870 has been accrued as royalty payments due.
        Development
          Stage Company and Risk Factors
        The Company is
          considered to be a development stage company as defined in Statement
          of Financial Accounting Standards No. 7, "Accounting and Reporting by
          Development Stage Enterprises." Since inception, the Company has been
          primarily engaged in research, product engineering and raising capital.
        The Company, as
          a development stage enterprise, has yet to generate significant revenues
          and has no assurance of substantial future revenues. The Company is
          subject to a number of risks that may affect its ability to become an
          operating enterprise or impact its ability to remain in existence, including
          risks related to successful development and marketing of its products,
          patent protection of proprietary technology, government regulation,
          competition from substitute products (including technologies that may
          not yet have been developed), dependence on key employees and the need
          to obtain additional funds that may not be available to it.

      As shown in the accompanying
        financial statements, the Company incurred a net loss of approximately
        $218,200 for the six months ended March 31, 2002 and had a working capital
        deficit of approximately $1,409,000. Operating expenses decreased by approximately
        $331,000 (47%) from the prior year first six months as a result of decreases
        in a variety of expenses including salaries, office expense, consultant
        fees and depreciation and amortization, as part of the companys
        program to control costs and optimize the use of its resources and due
        to a change in accounting estimate during the first quarter of 2002 of
        approximately $73,000 related to reimbursement of patent costs by Cornell
        Research Foundation, Inc.
      Management is seeking
        an investment of at least $1 million to strengthen its working capital
        position, and active discussions with interested parties are continuing.
        Current monthly cash requirements in order to sustain meaningful operations
        are approximately $80,000. Management will continue to evaluate the most
        cost effective means of raising any needed capital. Although management
        is confident of its ability to raise the capital, there can be no assurance
        that additional financing will be available on acceptable terms or at
        all.

      ITEM
        2.		Management's Discussion and Analysis of Financial Condition
        and Results of Operations 
        Three months ended March 31, 2002 as compared to the 
        six months ended March 31, 2001
        As a development
          stage enterprise, the Company, since inception, has been primarily engaged
          in research, product engineering, and capital formation. As such, the
          Company has not generated significant revenues to date on a recurring
          basis.
        The Company signed
          a final Licensing Agreement on January 21, 2000 with Kubota Corporation
          for the sale of Paracelsians Ah-IMMUNOASSAY® in the Japanese
          market and began manufacturing and selling kits to Kubota. This 'bioassay'
          based kit is rugged, user-friendly, portable, analytically sensitive,
          and low cost when compared with the existing methodology. The agreement
          with Kubota will provide revenues from the sale of kits and royalties.

      On June 15, 2000
        the Company announced that in accordance with the License Agreement, Kubota
        agreed to pay the initial $150,000 License Fee. The License Agreement
        also calls for a second payment of $150,000 within (30) days of the third
        anniversary of the Agreement. Kubota after using and evaluating the Ah-IMMUNOASSAY®
        Kits concluded that the methodology is effective for their purposes, and
        Kubota paid the $150,000 on August 8, 2001, seventeen months sooner.
      On October 1, 2001
        Kubota and the Company announced an agreement where Kubota will pay the
        Company $350,000, earmarked for upgrading the Ah-IMMUNOASSAY® Kits.
        The first payment of $175,000 was made in September 2001 and the second
        payment of $40,000 was made in December 2001. The third payment of $90,000
        was made in March 2002 and the fourth and final payment of $45,000 will
        be made in September 2002. Under the terms of the agreement, the Company
        is required to compensate Kubota beginning in January 2003 based on sales
        of the Ah-IMMUNOASSAY® Kits. The Company has accounted for the proceeds
        under the agreement as other long-term liabilities.
      On April 24, 2002
        the Company announced that it signed a Letter of Intent with Biosense,
        a biotech company located in Bergen, Norway focusing on the development
        and production of immunoassays, and bioassays for environmental monitoring,
        chemical product testing and food safety studies. Paracelsian and Biosense
        agreed to jointly market and sell Paracelsians Ah-IMMUNOASSAY®
        Kits and/or analytical services. The parties will develop a one year trial
        period sales agreement that will include milestones. Additionally, the
        parties agreed to participate together on research and improvement of
        current methodologies for sample preparation and analysis, as well as
        improvement of kit components and packaging. Both companies have mutual
        goals of introducing new technologies for high quality, user friendly
        and rapid representation in the environmental and consumer safety industries.
      On May 2, 2002 the
        Company announced that the Japanese Patent Office issued to Paracelsian
        Patent #3253300, Ah-IMMUNOASSAY® methodology for the detection of
        dioxin and dioxin-like chemicals. This is the seventh patent related to
        the companys core technology, and the second in Japan.
        Results of Operations

      The Company's net
        loss for the second quarter of fiscal 2002 was approximately $159,000
        compared to approximately $258,000 in the second quarter of fiscal 2001.
        Revenues for the three-month period were approximately $70,000 in 2002
        as compared to approximately 68,000 in 2001. Operating expenses for the
        three-month period were approximately $224,000 compared to approximately
        $324,000 for the same period of the prior year. The decrease of approximately
        $100,000 (31%) is due to a decrease in a number of expense categories
        including payroll, office expense, consultant fees, depreciation and amortization.
        The management team is operating with modest staff levels and has been
        focusing on optimizing its resources, increasing its customer base and
        generating revenues.
      (PAGE
        9)Liquidity &
          Capital Resources

      As of March 31, 2002,
        the Company had cash of $87,914 and a net working capital deficit of $1,409,000.
        Management believes that it can continue to raise additional capital to
        support its operations until such time as the revenue stream is sufficient
        to realize positive cash flow. Management believes that the additional
        financing coupled with its expected revenues from the Ah-IMMUNOASSAY®
        will enable the Company to increase sales, to further improve its operating
        efficiency and to continue its operations into the future.

      In January and February
        2001 the Company issued three Convertible Promissory Agreements in the
        amounts of $50,000, $30,000 and $10,000. The Agreements mature in one
        year from the issuance date and each holder may convert the Agreement
        into shares of Restricted Common Stock of the Company at any time up to
        and including the maturity date but not thereafter. The $50,000 Agreement
        expired on February 15, 2002 and was extended to August 15, 2002. The
        $30,000 Agreement expired on January 10, 2002 and was extended to July
        10, 2002 and the $10,000 Agreement expired on January 9, 2002 and was
        extended to July 9, 2002.
      On January 30, 2002
        the Company issued a convertible Promissary Agreement for $60,000 that
        matures on July 29, 2002 and bears an interest rate of 15%. The holder
        may convert the Agreement into shares of Restricted Common Stock of the
        Company at any time up to and including the maturity date.
      Management is seeking
        an investment of at least $1 million to strengthen its working capital
        position, and active discussions with interested parties are continuing.
        Current monthly cash requirements in order to sustain meaningful operations
        are approximately $80,000. Management will continue to evaluate the most
        cost effective means of raising any needed capital. Although management
        is confident of its ability to raise the capital, there can be no assurance
        that additional financing will be available on acceptable terms or at
        all.

      Short-Term Advances

      BioSignia, Inc.,
        the Company's largest shareholder, has advanced interim funds to the Company
        for working capital purposes. The Company agrees to repay the funds, together
        with quarterly interest at an annual rate of prime plus 2% and its obligation
        to satisfy the indebtedness matures on September 1, 2002. As of March
        31, 2002 $354,724 has been advanced, including accrued interest.
        Forward Looking
          Statements

      Certain statements
        in this Form 10-QSB "Management's Discussion and Analysis of Financial
        Condition and Results of Operations" constitute "forward looking statements"
        within the meaning of the Private Securities Litigation Reform act of
        1995. Such forward looking statements involve known and unknown risks,
        uncertainties and other factors which may cause the actual results, performance
        or achievements of the Company to be materially different from any future
        results, performance or achievements expressed or implied by such forward
        looking statements. Such factors include, among others, the following:
        success of operating initiative, advertising and promotional efforts,
        acceptance of new product offerings, availability, changes in business
        strategy or development plan, availability and terms of capital, labor
        and employee benefit costs, and other factors specifically referred to
        in this 10-QSB.
        PART II		OTHER
          INFORMATION
        Item 1.		Legal
          Proceedings
        Hadyk, et al.
          V. John G. Babish, et al.

      In addition to routine
        litigation that is incidental to its business, the Company is a party
        to the following litigation:
      (PAGE
        10)Hadyk,
        et al. V. John G. Babish, et al.: This case was commenced in New York
        State Supreme Court (Onondaga County) in June 1993 by certain persons,
        individually and doing business as In Vitro Bioanalytic Systems, against
        the Company, Dr. John G. Babish, a former officer and director of the
        Company, and Edward Heslop, a founding shareholder of the Company, primarily
        as an action for money damages and injunctive relief against the Company
        for alleged misappropriation of proprietary information and unfair competition.
        The plaintiffs allege, among other things, that in 1990, prior to the
        Company's incorporation, a partnership has been formed with Messrs. Babish
        and Heslop to commercialize products that the Company was developing.
        Damages, an accounting and an injunction are being sought against the
        Company. By decision dated September 14, 1994, the Court dismissed certain
        of the plaintiffs claims against the Company while permitting a
        claim alleging unfair competition to proceed. Discovery has been temporarily
        stayed pending resolution of a motion for summary judgment brought by
        certain of the Company's co-defendants. That motion was successfully and
        fully resolved, and the Judge, on March 7, 2001 signed an order dismissing
        all of the plaintiffs refining claims against the Company. In December
        2001, the plaintiffs filed an appeal. On June 17, 2002 an order was received
        from the Appellate Court that affirmed the Supreme Court ruling dismissing
        the case. The Appellate Court also affirmed the award of costs and disbursements
        in the amount of $5,276 to Paracelsian to be paid by the Plaintiff.
      Item 6(a)	  Exhibits
        None
        Item 6(b)	  Reports
          on Form 8-K
        None
        SIGNATURES
        In
          accordance with Section 13 or 15 (d) of the Securities and Exchange
          Act, the registrant caused this report to be signed on its behalf by
          the undersigned, thereunto duly authorized.

      Date June 24, 2002
        PARACELSIAN,
          INC.
        
        PARACELSIAN, INC.
        By:/s/
          NoriYoshi Inoue
                                                                                                        
           -------------------------------------
                                                                                                        
          NoriYoshi Inoue
                                                                                                        
          President,
                                                                                                        
          Chief Executive Officer
        By/s/
          GARY G. CHABOT
                                                                                                        
          ---------------------------------
                                                                                                        
          Gary G. Chabot
                                                                                                        
          Principal Accounting Officer
        

      (PAGE
        11)
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