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, 1999.

                                       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                    (I.R.S. Employer
     incorporation or organization)                     Identification No.)



222 Langmuir Laboratories, Cornell Technology Park, Ithaca, New York    14850
--------------------------------------------------------------------    -----
            (address of principal executive offices)                   Zip Code



                    Issuer's telephone number: (607) 257-4224
                                               --------------



Check  whether  the  issuer  (1) filed all  reports 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 [X]    No [ ]




There were 19,324,661 shares of Common Stock outstanding at May 12, 1999.

<PAGE>

                        PARACELSIAN, INC. AND SUBSIDIARY

                                      Index


                                                                        Page
                                                                        ----
      PART I. - FINANCIAL INFORMATION

      Item 1.    Financial Statements

      Consolidated Balance Sheet as of March 31, 1999 (Unaudited)          3


      Consolidated Statements of Operations for the three and 
      six months ended March 31, 1999 and 1998 and the cumulative
      period from inception to March 31, 1999 (Unaudited)                  4


      Consolidated Statements of Cash Flows for the six months
      ended March 31, 1999 and 1998 and the cumulative period
      from inception to March 31, 1999 (Unaudited)                         5


      Notes to Consolidated Financial Statements (Unaudited)               7


      Item 2 - Management's Discussion and Analysis of
      Financial Condition and Results of Operations.                       9



      PART II  - OTHER INFORMATION

      Item 1 - Legal Proceedings                                          11

      Item 6 - Exhibits and Reports on Form 8-K                           11

      Signatures                                                          11

<PAGE>

                        Paracelsian, Inc. and Subsidiary
                          (A Development Stage Company)
                           Consolidated Balance Sheet
                                 March 31, 1999
                                   (Unaudited)


              ASSETS
Current Assets:
   Cash and cash equivalents                           $    109,038
   Inventory                                                171,689
   Prepaid expenses and other current assets                 22,452
                                                       ------------
     Total current assets                                   303,179
                                                       ------------

Equipment, net                                              238,286

Other Assets:
   TCM extracts on-hand                                     233,469
   Licensing agreement, net                                  79,258
   Patents and trademarks, net                              208,461
   Note receivable                                          148,750
                                                       ------------
                                                            669,938
                                                       ------------
                                                       $  1,211,403
                                                       ============

               LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable                                    $    193,598
   Accrued expenses                                          34,388
   Current portion of capital lease obligations              11,015
   Current portion of notes payab1e                           8,277
                                                       ------------
     Total current liabilities                              257,278


Long-term Liabilities
   Long-term portion of capital lease obligation             14,837
   Long-term portion of notes payab1e                         7,279
                                                       ------------
     Total current and long-term liabilities                289,394
                                                       ------------

Commitments and Contingency

Stockholders' Equity:
   Common stock, $.01 par value; 35,000,000 
     shares authorized; 19,176,513 shares 
     outstanding March 1999                                 191,765
   Additional paid-in capital                            23,681,304
   Deficit accumulated during the development stage     (21,608,545)
   Treasury stock, at cost; 265,478 shares               (1,342,515)
                                                       ------------
     Total stockholders' equity                             922,009
                                                       ------------
                                                       $  1,211,403
                                                       ============


          See accompanying notes to consolidated financial statements.

                                        3

<PAGE>

<TABLE>
<CAPTION>
                                             Paracelsian, Inc. and Subsidiary
                                              (A Development Stage Company)
                                          Consolidated Statements of Operations
                               For the three and six months ended March 31, 1999 and 1998,
                                And the cumulative period from inception to March 31, 1999
                                                       (Unaudited)


                                                                                                              Cumulative
                                                  Three Months Ended               Six Months Ended           Period from
                                                      March 31,                        March 31,              Inception to
                                             ----------------------------    ----------------------------      March 31,
Revenues:                                        1999            1998           1999             1998            1999
                                             ------------    ------------    ------------    ------------    ------------
<S>                                               <C>             <C>             <C>             <C>           <C>      
   Marketing rights                                    --              --              --              --         254,995
   Products                                         5,948           1,675           7,653           1,675         184,678
   Product testing                                  5,229          12,050          15,489          33,970          56,907
   Development fees                                98,000              --          98,000              --          98,000
   Product royalties                                   --              --              --              --           1,246
   Subscription revenue                                --              --              --              --          31,625
                                             ------------    ------------    ------------    ------------    ------------
                                                  109,177          13,725         121,142          35,645         627,451

Operating expenses:
   Research and product engineering               202,938         194,675         376,515         377,157       8,052,730
   General and administrative                     382,478         297,161         723,961         555,401      12,195,650
   Product launch costs                                --              --              --              --         300,544
   Cost of products sold                               --              --              --              --          95,023
                                             ------------    ------------    ------------    ------------    ------------
                                                  585,416         491,836       1,100,476         932,558      20,643,947
                                             ------------    ------------    ------------    ------------    ------------
     Loss from operations during 
       the development stage                     (476,239)       (478,111)       (979,334)       (896,913)    (20,016,496)

Interest income, net                                   --          12,889              --          26,702         497,463
Gain on sale of assets                                 --           1,700              --           6,968          38,488
                                             ------------    ------------    ------------    ------------    ------------
     Net loss during the development stage       (476,239)       (463,522)       (979,334)       (863,243)    (19,480,545)
                                             ============    ============    ============    ============    ============


     Basic and diluted net loss per share           (0.03)          (0.03)          (0.05)          (0.06)
                                             ============    ============    ============    ============

Weighted average number of
   shares outstanding                          18,953,365      15,576,296      18,602,128      15,576,296
                                             ============    ============    ============    ============

                               See accompanying notes to consolidated financial statements.
</TABLE>

                                                            4

<PAGE>
<TABLE>
<CAPTION>
                                        Paracelsian, Inc. and Subsidiary
                                         (A Development Stage Company)
                                     Consolidated Statements of Cash Flows
                               For the six months ended March 31, 1999 and 1998,
                           And the cumulative period from inception to March 31, 1999
                                                  (Unaudited)

                                                                                                    Cumulative
                                                                          Six Months Ended          Period from
                                                                              March 31,             Inception to
                                                                   ----------------------------      March 31,
                                                                       1999           1998             1999
                                                                   ------------    ------------    ------------
<S>                                                                <C>             <C>             <C>          
Cash flows from operating activities:
     Net loss                                                      $   (979,334)   $   (863,243)   $(19,480,545)
     Adjustments to reconcile net loss to net cash used in
         operating activities:
         Gain on the sale of assets                                          --          (1,700)         (6,968)
         Non-cash compensation expense                                  119,828              --       1,362,103
         Other non-cash expenses                                             --              --       1,742,754
         Depreciation and amortization                                  214,650         214,650       1,901,495
         Changes in assets and liabilities:
            (Increase) decrease in inventory                                 --         (15,366)       (171,689)
            (Increase) decrease in prepaid expenses and
                other current assets                                     61,725          21,050           6,968
            (Decrease) increase in accounts payable                     123,963        (142,226)        548,120
            (Decrease) increase in due to related party                      --         (11,555)             --
            (Decrease) increase in accrued expenses                     (90,450)        (43,609)         71,888
                                                                   ------------    ------------    ------------
         Net cash used in operating activities                         (549,618)       (841,999)    (14,025,874)
                                                                   ------------    ------------    ------------

Cash flows from investing activities:
     Purchase of equipment                                               (1,636)        (31,212)       (735,037)
     Proceeds from sale of equipment                                         --           1,700          26,968
     Acquisition of licensed technology                                      --              --         (53,656)
     Acquisition of patents and trademarks                              (33,758)             --        (464,337)
     Acquisition of New Century Nutrition newsletter                         --              --        (350,000)
     Acquisition of option for East West Herbs, Ltd. 
         and related acquisition costs                                       --              --         (92,866)
     Loan to from East West Herbs, Ltd.                                      --              --        (340,000)
     Proceeds from East West Herbs, Ltd.                                     --          42,500          42,500
                                                                   ------------    ------------    ------------
         Net cash used in investing activities                          (35,394)         12,988      (1,966,428)
                                                                   ------------    ------------    ------------

Cash flows from financing activities:
     Sale of common stock, initial public offering, net of costs             --              --       5,124,014
     Sale of common and preferred stock, net of costs                   445,980         500,000      11,276,089
     Proceeds from the exercise (redemption) of warrants                     --              --       1,186,295
     Proceeds from the exercise of options                               31,400              --          68,900
     Purchase of treasury stock                                              --              --      (1,342,515)
     Cost of warrant dividend                                                --              --         (63,102)
     Payment on equipment contract                                           --              --         (90,950)
     Payment on capital lease obligations                                (3,993)             --          (9,148)
     Payment on notes payable                                           (29,879)             --         (48,243)
                                                                   ------------    ------------    ------------
         Net cash (used in) provided by financing activities            443,508         500,000      16,101,340
                                                                   ------------    ------------    ------------

Net increase (decrease) in cash and cash equivalents                   (141,504)       (329,011)        109,038

Cash and cash equivalents, beginning of period                          250,542         886,249              --
                                                                   ------------    ------------    ------------

Cash and cash equivalents, end of period                           $    109,038    $    557,238    $    109,038
                                                                   ============    ============    ============

                         See accompanying notes to consolidated financial statements.
</TABLE>

                                                       5

<PAGE>

<TABLE>
<CAPTION>
                                        Paracelsian, Inc. and Subsidiary
                                         (A Development Stage Company)
                                     Consolidated Statements of Cash Flows
                               For the six months ended March 31, 1999 and 1998,
                           And the cumulative period from inception to March 31, 1999
                                                  (Unaudited)

                                                                                                    Cumulative
                                                                          Six Months Ended          Period from
                                                                              March 31,             Inception to
                                                                   ----------------------------      March 31,
                                                                       1999           1998             1999
                                                                   ------------    ------------    ------------
<S>                                                                <C>             <C>             <C>          
Supplemental disclosures:
     Cash paid during the period for interest                      $      2,835    $      2,485    $     29,897
                                                                   ============    ============    ============

Supplemental disclosure of non-cash investing and financing activities:
     Fair value of assets acquired, net of cash acquired           $         --    $         --    $  1,733,212
     Less - liabilities assumed                                              --              --          83,212
     Less - issuance of common stock                                         --              --       1,644,000
                                                                   ------------    ------------    ------------
         Net cash paid                                             $         --    $         --    $      6,000
                                                                   ============    ============    ============
     Warrant dividend                                              $         --    $         --    $    500,000
     Issuance of common stock/warrants for services
         and to reduce short-term liabilities                      $    150,914    $         --    $    716,145
     Purchase of equipment                                         $         --    $         --    $     90,950
     Repayment of officer stock subscription receivable            $         --    $         --    $     89,850
     Issuance of common stock for licensing and technology rights  $         --    $         --    $      3,338


                               See accompanying notes to consolidated financial statements.
</TABLE>
                                                            6

<PAGE>
                        PARACELSIAN, INC. AND SUBSIDIARY
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 1999
                                   (Unaudited)

1.       BASIS OF PRESENTATION

The  consolidated  financial  statements  included  herein have been prepared in
accordance with generally accepted accounting principles without audit, 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.  Certain  information
and footnote disclosures normally included in financial statements,  prepared in
accordance with generally accepted accounting principles, have been condensed or
omitted  as  permitted  by  such  regulations.   These  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, 1998.

2.       ORGANIZATION, BUSINESS, AND RISK FACTORS:

ORGANIZATION AND BUSINESS
Paracelsian,  Inc., (the "Company") is a bio-science and technology company that
utilizes its  proprietary  screening  technology to identify  novel  therapeutic
compounds from herbal and other  botanical  sources and to define and/or confirm
the biological  mechanisms  through which traditional herbs and other botanicals
provide the therapeutic or functional  benefits  suggested by their  traditional
use. This  technology  has been  developed by the Company to identify  potential
products that inhibit the  biological  signals  generated by targeted cells that
result  in  controlled  or  uncontrolled  growth  and  division.  The  Company's
screening  technology  evaluates  the  effects  of herbal  and  other  botanical
products  on  intracellular   signals   referred  to  as  "Signal   Transduction
Technology."

Cell  division is one of the basic steps in biology  necessary for normal growth
of tissues to support life.  The Company's  technology  enables  researchers  to
observe signal  transduction  and measure the effects of chemicals  contained in
synthetic or natural compounds,  and chemicals occurring in nature such as herbs
and  combinations of herbal extracts,  on cell division.  In the course of these
observations,  the Company can  distinguish  the  effects of such  chemicals  on
targeted  cells,  thereby  screening  compounds to identify those with promising
favorable  therapeutic  effects.  (This  proprietary  technology,  including the
components, methods, procedures and know-how employed in this screening process,
is referred to herein as the "Screening Technology")

In  October  1994,  Pacific  Liaisons   (Pacific),   a  partnership  engaged  in
identifying and acquiring  biologically active drugs, natural products and foods
from Eastern Asia, merged with a wholly-owned  subsidiary of the Company and the
Company  now  maintains a large  library of natural  medicinal  extracts.  These
extracts are being processed with the Company's screening technology to identify
potential  candidates for drug or dietary  supplement  development.  The Company
also has access to the informational database related to the medicinal extracts,
which contains, among other things, a history of the usage of each extract.

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.

                                       7

<PAGE>

As shown in the accompanying  financial  statements,  the Company incurred a net
loss of  approximately  $979,000 for the six months ended March 31, 1999 and had
working  capital  of  approximately  $46,000  at March  31,  1999.  The  Company
continues to expend funds on product  research and  development  and general and
administrative  expenses,  however, under the direction of a new management team
and Board since January,  1998, the business plan has been revised,  and efforts
have been focused on developing a recurring  revenue  stream.  Revenues from the
BioFIT(TM)  quality  assurance program and from development of the AhIMMUNOASSAY
dioxin screen  commenced  during the second  quarter of fiscal 1999. The Company
raised  $217,500  in  March  1999  and  $100,000  in May  1999  through  private
placements of its common stock. Management believes that it can raise additional
capital through similar private placements,  if needed, and that the combination
of such capital and the  anticipated  revenue  stream will enable the Company to
continue its operations and emerge from the development stage in 1999.

3.       SIGNIFICANT ACCOUNTING POLICIES:

CONSOLIDATION
The  consolidated  financial  statements of the Company  include the accounts of
Paracelsian,  Inc. and its wholly owned subsidiary ParaComm, Inc. formerly known
as Para Acquisition  Corp. All intercompany  balances and transactions have been
eliminated.

CASH AND CASH EQUIVALENTS
Cash equivalents  consist of highly liquid investments with an original maturity
of three  months or less.  The Company had no cash  equivalents  as of March 31,
1999.

RESEARCH AND PRODUCT ENGINEERING
Company-sponsored  research  and  product  engineering  expenditures  have  been
charged to expense as  incurred.  These  costs  consist  primarily  of  employee
salaries and direct  laboratory costs. The cost of extracts used in research and
development activities is expensed as consumed.

NET LOSS PER SHARE
Basic  loss  per  share  is   computed   by   dividing   the  net  loss  by  the
weighted-average  number of common  shares  outstanding  during the period.  The
Company's  basic and  diluted  per share  amounts are the same since the assumed
exercise of stock options and warrants are anti-dilutive.

PATENTS AND TRADEMARKS
The Company has  acquired or applied for certain  patent and  trademark  rights.
Costs associated with the acquisition and application for these rights have been
capitalized  and are  being  amortized  on the  straight-line  method  over  the
estimated legal life of the assets which range from 15 to 17 years.

EQUIPMENT AND DEPRECIATION
Equipment is stated at cost and is depreciated  over the estimated  useful lives
of the assets using the straight-line method.

USE OF ESTIMATES
The  preparation of the  consolidated  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 and
the disclosure of contingent assets and liabilities at the date of the financial
statements.  Estimates also affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

                                       8

<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

               Six months Ended March 31, 1999 as compared to the
                         Six months Ended March 31, 1998

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  revenue to date on a recurring
basis.

Since January 1998, a significant  portion of the new management team's strategy
has been focused on the development of its BioFIT (TM) (Bio Functional Integrity
Tested)  quality  assurance  program.  This  unique  testing  program is able to
certify consistent  bio-functionality  of herbal and other dietary  supplements.
This new  "functional"  approach to quality  assurance will assist  consumers in
selecting  herbs  and  other  botanical  products  based on  their  demonstrated
biological activity,  rather than relying solely on analytical  techniques which
measure only the presence or absence of certain marker compounds.

The Company has entered into an agreement  with R.P.  Scherer North America that
establishes  them as the  exclusive  marketing  and  distribution  agent for the
BioFIT  (TM)  certification  program in the  dietary  supplement  and OTC market
segments in North America. The agreement also provides for collaboration between
the  two  companies  on the  development  of new  dietary  supplements  and  OTC
products.  The  agreement,  among other  things,  provides  for  payments to the
Company for the  development of each bioassay,  payment for each  certification,
and payment of royalties on all sales of BioFIT (TM) certified products.

In March 1999,  Paracelsian entered into a letter agreement (to be followed by a
definitive  agreement)  with R.P.  Scherer  Limited of Swindon,  England whereby
Paracelsian  will  grant  exclusive  distribution  rights  to  Scherer  for  the
BioFIT(TM)  program in Europe,  Scandinavia,  the Middle  East and  Africa.  The
agreement will provide for the payment of development fees,  certification fees,
and royalties subject to certain regulatory approvals and other milestones.

Paracelsian  has  begun  the  initial  phase  of  a  collaboration  with  Kubota
Corporation  of  Osaka,  Japan  to  further  develop  and  implement  the use of
Paracelsian's  patented  dioxin testing  system know as the Ah  Immunoassay(TM).
Under  this   collaboration,   Paracelsian   will  develop  an  advanced  sample
preparation  system which will  facilitate  the  widespread  use of the assay to
monitor  the  levels  of  dioxin  in  the  smoke  and  ash  of  municipal  waste
incinerators  operated by Kubota and others.  Paracelsian  and Kubota have begun
negotiations  for a more  comprehensive  agreement  under which Kubota would pay
Paracelsian   a   license   fee  for  the  use  and   distribution   of  the  Ah
Immunoassay(TM). Under this agreement, Paracelsian would receive both an initial
license  fee and an ongoing  payment  for each use or sale of the assay,  with a
minimum annual payment required under the agreement to maintain exclusivity.

The  commencement  of  revenues  from the BioFIT (TM)  program  began in January
1999,and  management  anticipates a gradual ramp-up and expansion of the program
throughout  the year.  Consequently,  the Company is expected to emerge from the
development stage during 1999.

RESULTS OF OPERATIONS

The Company's net loss for the second  quarter of fiscal 1999 was  approximately
$476,000  compared to $478,000 in the second quarter of fiscal1998.  For the six
months ended March 31, 1999, the net loss was $979,000, compared to $897,000 for
the  comparable  period of the  preceding  year.  Revenues for the three and six
month  periods  were  $109,000  and  $121,000 in 1999 as compared to $14,000 and
$36,000 in 1998. The increase in revenues is primarily  attributable  to initial
development fees under the BioFit (TM) program with R.P.  Scherer  ($50,000) and
fees  from  the  Kubota  Copration  ($48,000)  for  development  work  on the Ah
Immunoassay(TM).  Operating  expenses  for the fiscal 1999  periods are modestly
higher than the comparable periods in fiscal 1998,  reflecting the gradual build
up of personnel and related costs  associated with the development of the BioFit
(TM) certification  program.  Additionally,  the 1999 periods include $78,000 of
non-cash  compensation  associated with the vesting of stock options  previously
granted to the Chief Executive Officer.

                                       9

<PAGE>

LIQUIDITY & CAPITAL RESOURCES

As of March 31, 1999,  the Company had cash of $109,000 and net working  capital
of $46,000.  Subsequent to quarter end, the Company  received  $50,000 from R.P.
Scherer  representing  the initial  payment  under the  European  portion of the
BioFit (TM) development  program.  Additionally,  in early May 1999, the Company
completed a private placement of its common stock for $100,000 at 67.5 cents per
share,  bringing the total private placements completed since fiscal year end to
$567,500.  Current  monthly  cash  requirements  in order to sustain  meaningful
operations are approximately $100,000.  Management believes, based on its recent
experience,  that it can continue to raise  incremental  capital through private
placements,  if needed, to support its operations until such time as the revenue
stream  is  sufficient  to  provide  for  continuing  operations.  Such  private
placements,  if any,  will likely  require  discounts  from then current  market
prices, reflecting the risk associated with trading restrictions, trading volume
and  volatility,  and stock price support  levels.  Management  will continue to
evaluate the most cost effective means of raising any additional needed capital,
including the feasibility of adjusting exercise prices on outstanding options or
warrants as  appropriate.  There can be no assurance that  additional  financing
will be available on acceptable terms or at all.


YEAR 2000 COMPLIANCE

The Company continues to monitor its exposure to the year 2000 computer problem.
Management  believes that all of the Company's date sensitive computer equipment
and  software is Y2K  compliant,  and is not aware of any vendor or customer Y2K
problems  that could have a  significant  impact on the  financial  position  or
results of operations of the Company.  To date, the Company has not incurred any
significant  expense  with  respect  to this issue and does not  anticipate  any
significant related expense in the future.

                                       10

<PAGE>

PART II  OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

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 had 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
plaintiffs'  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, if successful, will fully resolve the case in favor
of the Company.  The Company  believes that the suit against it is without merit
and intends to defend the case vigorously.


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     May 21, 1999

                                     PARACELSIAN, INC.

                                     By: /s/ BERNARD M. LANDES
                                         ---------------------------------------
                                             Bernard M. Landes
                                             President and
                                             Chief Executive Officer


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