SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

               Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                       For the quarter ended June 30, 2001

                         Commission file number 0-11550


                               Pharmos Corporation
             (Exact name of registrant as specified in its charter)

            Nevada                                        36-3207413
(State or other jurisdiction of                      (IRS Employer Id. No.)
incorporation or organization)

                         99 Wood Avenue South, Suite 301
                                Iselin, NJ 08830
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (732) 452-9556



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 ___.



As of August 2, 2001, the Registrant had  outstanding  55,074,648  shares of its
$.03 par value Common Stock.

<PAGE>

Part I.   Financial Information
Item 1   Financial Statements


Pharmos Corporation
(Unaudited)
Consolidated Balance Sheets
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 June 30,        December 31,
                                                                    2001            2000
                                                                -------------    -------------
<S>                                                             <C>              <C>
Assets
  Cash and cash equivalents                                     $  17,342,534    $  22,480,777
  Inventories                                                         607,641          796,550
  Receivables                                                       1,652,921        1,188,502
  Prepaid royalties                                                      --              6,591
  Restricted cash                                                   4,085,511             --
  Prepaid expenses and other current assets                           223,133          281,109
                                                                -------------    -------------
       Total current assets                                        23,911,740       24,753,529

  Fixed assets, net                                                 1,860,491        1,681,390
  Prepaid royalties, net of current portion                           143,000          143,000
  Intangible assets, net                                              128,428          151,690
  Restricted cash                                                        --          4,035,414
  Other assets                                                         18,087           18,086
                                                                -------------    -------------

       Total assets                                             $  26,061,746    $  30,783,109
                                                                -------------    -------------


Liabilities and Shareholders' Equity
  Accounts payable                                              $     281,793    $     458,504
  Accrued expenses                                                  1,566,163        1,162,098
  Accrued wages and other compensation                                967,569          768,975
  Convertible debentures, net                                       7,189,072             --
  Advances against future sales                                       220,375          619,702
                                                                -------------    -------------
       Total current liabilities                                   10,224,972        3,009,279

  Advances against future sales, net of
    current portion                                                 1,000,000        1,000,000
  Convertible debentures, net                                            --          6,580,872
  Other liabilities                                                   100,000          100,000
                                                                -------------    -------------
       Total liabilities                                           11,324,972       10,690,151
                                                                -------------    -------------

  Commitments and contingencies

  Shareholders' equity
  Common stock, $.03 par value; 80,000,000 shares authorized,
    54,391,611 and 54,063,897 shares issued and outstanding
    (excluding $551 in 2001 and 2000, held in Treasury)
      in 2001 and 2000, respectively                                1,631,747        1,621,916
    Deferred compensation                                            (273,495)            --
    Paid in capital                                               108,989,680      108,965,351
    Accumulated deficit                                           (95,611,158)     (90,494,309)
                                                                -------------    -------------
       Total shareholders' equity                                  14,736,774       20,092,958
                                                                -------------    -------------


       Total liabilities and shareholders' equity               $  26,061,746    $  30,783,109
                                                                =============    =============
</TABLE>

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


                                       2
<PAGE>

Pharmos Corporation
(Unaudited)
Consolidated Statements of Operations
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                           Three Months Ended June 30,
                                                                2001            2000
                                                          ------------    ------------
<S>                                                       <C>             <C>
Revenues
   Product sales                                          $  1,480,737    $  1,414,837

Cost of Goods Sold                                             453,908         477,162
                                                          ------------    ------------

Gross Margin                                                 1,026,829         937,675
                                                          ------------    ------------

Expenses
   Research and development, net                             1,858,841         898,331
   Selling, general and administrative                       1,110,604       1,014,783
   Patents                                                      55,971          49,937
   Depreciation and amortization                               164,066         112,158
                                                          ------------    ------------

      Total operating expenses                               3,189,482       2,075,209
                                                          ------------    ------------

Loss from operations                                        (2,162,653)     (1,137,534)

Other income (expense):
   Interest income                                             226,208         277,509
   Other income (expense), net                                  (4,315)         12,924
   Interest expense                                           (425,985)         (2,831)
                                                          ------------    ------------
   Other (expense) income, net                                (204,092)        287,602
                                                          ------------    ------------

Net loss                                                  ($ 2,366,745)      ($849,932)
                                                          ============    ============

Net loss per share
    - basic and diluted                                          ($.04)          ($.02)
                                                          ============    ============


Weighted average shares outstanding - basic and diluted     54,356,721      52,507,373
                                                          ============    ============
</TABLE>


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


                                       3
<PAGE>

Pharmos Corporation
(Unaudited)
Consolidated Statements of Operations
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                             Six Months Ended June 30,
                                                               2001            2000
                                                          ------------    ------------
<S>                                                         <C>             <C>
Revenues
   Product sales                                            $2,505,795      $2,078,417
   License fee                                                  80,000              --
                                                          ------------    ------------
   Total Revenues                                            2,585,795       2,078,417

Cost of Goods Sold                                             865,249         757,691
                                                          ------------    ------------

Gross Margin                                                 1,720,546       1,320,726
                                                          ------------    ------------

Expenses
   Research and development, net                             3,958,472       2,335,306
   Selling, general and administrative                       2,131,130       1,873,852
   Patents                                                     126,938          81,897
   Depreciation and amortization                               323,287         209,218
                                                          ------------    ------------

      Total operating expenses                               6,539,827       4,500,273
                                                          ------------    ------------

Loss from operations                                        (4,819,281)     (3,179,547)

Other income (expense):
   Interest income                                             548,288         424,440
   Other income, net                                             6,142          10,031
   Interest expense                                           (851,997)             --
                                                          ------------    ------------
   Other (expense) income, net                                (297,567)        434,471
                                                          ------------    ------------

Net loss                                                   ($5,116,848)    ($2,745,076)
                                                          ============    ============

Net loss per share
    - basic and diluted                                          ($.09)          ($.05)
                                                          ============    ============


Weighted average shares outstanding - basic and diluted     54,265,381      50,754,764
                                                          ============    ============
</TABLE>

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


                                       4
<PAGE>

Pharmos Corporation
(Unaudited)
Consolidated Statements of Cash Flows
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   Six Months Ended June 30,
                                                                     2001          2000
                                                                ------------    ------------
<S>                                                             <C>             <C>
Cash flows from operating activities
  Net loss                                                      ($ 5,116,848)   ($ 2,745,076)
   Adjustments to reconcile net loss to net
    cash flow used in operating activities
       Depreciation and amortization                                 323,287         209,218
       Amortization of Debt Discount and                             608,200              --
Issuance costs
       Non-cash compensation charge - consultant compensation        108,198              --
  Changes in operating assets and liabilities
       Inventory                                                     188,909         408,358
       Receivables                                                  (464,419)          3,106
       Prepaid expenses and other current assets                      57,976        (158,813)
       Advanced royalties                                              6,591         112,682
       Accounts payable                                             (176,711)       (252,671)
       Accrued expenses                                              404,065        (184,584)
       Accrued wages                                                 198,594         167,866
                                                                ------------    ------------

       Total adjustments                                           1,254,690         305,162
                                                                ------------    ------------

  Net cash flows used in operating activities                     (3,862,158)     (2,439,914)


Cash flows from investing activities
     Purchases of fixed assets, net                                 (479,126)       (381,017)
                                                                ------------    ------------

  Net cash flows used in investing activities                       (479,126)       (381,017)
                                                                ------------    ------------

Cash flows from financing activities
     Advances against future sales                                  (399,327)       (790,592)
     Proceeds from issuance of common stock
         and exercise of warrants, net                               236,363      17,095,571
     Pricing adjustment for private placement, net                  (583,896)             --
     Proceeds from exercise of equity credit line                         --       2,145,905
     Increase in restricted cash                                     (50,099)             --
     Increase (decrease) in notes payable                                 --        (338,128)
                                                                ------------    ------------

Net cash provided by financing activities                           (796,959)     18,112,756

Net increase (decrease) in cash and cash equivalents              (5,138,243)     15,291,825

Cash and cash equivalents at beginning of year                    22,480,777       2,918,554
                                                                ------------    ------------

Cash and cash equivalents at end of period                      $ 17,342,534    $ 18,210,379
                                                                ============    ============
</TABLE>

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


                                       5
<PAGE>

Pharmos Corporation
Notes to Condensed Consolidated Financial Statements


Basis of Presentation

   The accompanying  unaudited condensed  consolidated financial statements have
   been prepared in accordance with generally accepted accounting principles for
   interim financial  information  pursuant to the instructions to Form 10-Q and
   Article 10 of  Regulation  S-X.  Accordingly,  they do not include all of the
   information  and  footnotes   required  by  generally   accepted   accounting
   principles for complete financial  statements.  In the opinion of management,
   all  adjustments,   consisting  of  normal  recurring  accrual   adjustments,
   considered  necessary for a fair presentation  have been included.  Operating
   results for the  three-month  and six-month  periods ended June 30, 2001, are
   not  necessarily  indicative of the results that may be expected for the year
   ended December 31, 2001.

1. The Company

   Pharmos  Corporation  (the  "Company") is a  bio-pharmaceutical  company that
   discovers and develops novel  therapeutics  to treat a range of  inflammatory
   and  neurological  disorders such as traumatic  brain injury and stroke.  The
   Company has an expansive  portfolio of drug candidates under development,  as
   well as discovery,  preclinical  and clinical  capabilities.  The Company has
   executive offices in Iselin, New Jersey and conducts research and development
   through its wholly owned subsidiary, Pharmos, Ltd., in Rehovot, Israel.

   The Company's main product in  development,  dexanabinol,  is in a Phase III,
   860-patient clinical trial for the treatment of severe traumatic brain injury
   currently  underway  in Europe and Israel.  New  chemical  entities  from its
   library  of  synthetic,  non-psychotropic  cannabinoid  compounds  are  being
   studied for possible efficacy in stroke, pain, multiple sclerosis,  and other
   neurological and anti-inflammatory conditions.

   The  Company  received  approval  for three  separate  New Drug  Applications
   ("NDA") from the U.S.  Food and Drug  Administration  ("FDA") in 1998.  These
   approvals were for Lotemax(R) and Alrex(R). Lotemax has been approved for the
   treatment of several ocular inflammatory indications,  including uveitis, and
   for post-operative inflammation. Alrex has been approved for the treatment of
   seasonal allergic conjunctivitis.

2. Liquidity and Business Risks

   While the  Company has  generated  revenue  through the sale of its  approved
   products in the market, it has incurred operating losses since its inception.
   At June 30, 2001, the Company has an accumulated deficit of $95,611,158. Such
   losses  have  resulted  principally  from  costs  incurred  in  research  and
   development  and from general and  administrative  expenses.  The Company has
   funded its operations through the use of cash obtained principally from third
   party financing.  Management believes that cash and cash equivalents of $17.3
   million as of June 30,  2001,  combined  with  anticipated  cash inflows from
   revenues  derived  from sales of Lotemax  and Alrex,  will be  sufficient  to
   support the Company's  continuing  operations.  Additionally,  as of June 30,
   2001,  $1.7 million  remained  available  under the Company's  equity line of
   credit.

   In order to finance  the  development  of its drug  pipeline,  the Company is
   continuing to actively  pursue  various  funding  options,  including  equity
   offerings,  strategic corporate  alliances,  business  combinations,  and the
   establishment  of  research  and  development  partnerships.  There can be no
   assurance  that the Company will be  successful  in  commercializing  its new
   product candidates.

3. Significant Accounting Policies

   Revenue recognition

   Sales  revenue is  recognized  upon the  transfer  of the title and rights of
   products to customers,  less allowances for estimated  returns and discounts.
   License fees and royalties are recognized  when earned in accordance with the
   underlying  agreements.  Revenue  for  contracted  research  and  development
   services  is  recognized  as  performed.  Revenue  from  these  contracts  is
   recognized  as costs are  incurred  (as defined in the  contract),  generally
   direct labor and supplies plus agreed overhead rates. Any advance payments on
   contracts are deferred until the related services are performed.


                                       6
<PAGE>

Pharmos Corporation
Notes to Condensed Consolidated Financial Statements

   The Company's revenues are principally derived from one customer.

   Inventories

   Inventories  consist  of  loteprednol  etabonate,  the  compound  used in the
   Company's products,  Lotemax and Alrex, and is stated at the lower of cost or
   market with cost determined on a weighted average basis.

   Reclassifications

   Certain amounts for 2000 have been reclassified to conform to the fiscal 2001
   presentation.  Such reclassifications did not have an impact on the Company's
   financial position or results of operations.

   New Accounting Pronouncements

   In July 2001,  the FASB  issued  Statement  No. 141  "Business  Combinations"
   ("SFAS 141") and Statement No. 142  "Goodwill  and Other  Intangible  Assets"
   ("SFAS 142"). SFAS 141 states that the use of the pooling-of-interest  method
   is prohibited for business  combinations  initiated after June 30, 2001. SFAS
   142 is  effective  for fiscal  years  beginning  after  December 15, 2001 and
   applies to all goodwill and other intangible assets recognized in an entity's
   statement of financial position at that date, regardless of when those assets
   were initially recognized. The Company is currently evaluating the provisions
   of SFAS 141 and  SFAS 142 and has not yet  determined  the  effects  of these
   changes on the Company's financial position or results of operations.

4. Collaborative Agreements

   In 1995,  the Company  entered  into a marketing  agreement  (the  "Marketing
   Agreement")  with Bausch & Lomb  Pharmaceuticals,  Inc.  ("Bausch & Lomb"), a
   shareholder of the Company, to market Lotemax and Alrex on an exclusive basis
   in the  United  States  following  receipt  of FDA  approval.  The  Marketing
   Agreement  also  covers  the  Company's  other  loteprednol  etabonate  based
   product, LE-T. Under the Marketing Agreement, Bausch & Lomb will purchase the
   active drug  substance  (loteprednol  etabonate)  from the Company.  A second
   agreement,  covering Europe, Canada and other selected countries,  was signed
   in 1996 ("the New Territories Agreement").

   Through  June 30,  2001,  Bausch and Lomb has  provided  the Company  with $5
   million in cash advances  against future sales, of which  approximately  $1.2
   million is outstanding at June 30, 2001. An additional $1 million is due from
   Bausch  and Lomb upon the  receipt  of  regulatory  approval  for LE-T in the
   United  States.  Bausch  &  Lomb  is  entitled  to  recoup  the  advances  by
   withholding  certain  amounts  against  payments for future  purchases of the
   active drug  substance,  based on the advances  made,  until all the advances
   have been repaid.  The Company may be obligated to repay such  advances if it
   is unable to supply  Bausch & Lomb with certain  specified  quantities of the
   active drug  substance.  The  portion of advances  expected to be recouped by
   Bausch and Lomb in 2001,  based on management's  estimate of product sales to
   Bausch & Lomb in 2001,  has been  presented  as a  current  liability  in the
   accompanying balance sheet at June 30, 2001.

   Bausch & Lomb also  collaborates  in the  development  of  products by making
   available  amounts  up to 50% of the  Phase III  clinical  trial  costs.  The
   Company has retained certain  conditional  co-marketing  rights to all of the
   products  covered  by  the  Marketing   Agreement  and  the  New  Territories
   Agreement.

   Total  receivables  from Bausch & Lomb as of June 30, 2001 and  December  31,
   2000 were $1,060,600 and $870,043, respectively.

5. Common Stock Transactions

   During the second  quarter of 2001,  the Company  issued 38,750 shares of its
   common  stock upon the exercise of warrants,  and received  consideration  of
   $50,863.

   During the second quarter of 2001, the Company  modified the terms of certain
   incentive  and  nonqualified  stock  options  granted to one of the Company's
   former employees who entered into a consulting relationship with the Company.
   Additionally, certain incentive and nonqualified stock options granted to two
   of the Company's  former  employees who  previously  entered into  consulting
   relationships  with the Company were  revalued to reflect the market value of
   those  options.  Accordingly,  the  Company  expensed  $97,803 as  consultant
   compensation  for the value of the  currently  vested  options  and  recorded
   $157,958 as deferred  compensation for the value of the unvested options.  In
   total, for the six months ended June 30, 2001 the Company  expensed  $108,198
   as consultant compensation for the value of the vested options.

   During the first  quarter  of 2001,  the  Company  paid  $572,539  and issued
   182,964  shares (valued at $400,325 at the date of issue) of the common stock
   of the Company to the  investors in the September  2000 private  placement of
   convertible  debentures and common stock.  The payment of cash and stock were
   the options  chosen by the Company


                                       7
<PAGE>

Pharmos Corporation
Notes to Condensed Consolidated Financial Statements

   and represent adjustments to the pricing based upon the Company's stock price
   during the adjustment period.  Under the terms of the agreements,  no further
   adjustments are due.

   During the first quarter of 2001,  the Company  issued  106,000 shares of its
   common  stock upon the exercise of warrants,  and received  consideration  of
   $185,500.

6.   Segment and Geographic Information

   The Company is active in one business segment: designing, developing, selling
   and marketing  pharmaceutical  products.  The Company  maintains  development
   operations in the United States and Israel.  The Company's selling operations
   are maintained in the United States.

   Geographic  information for the three and six months ending June 30, 2001 and
   2000 are as follows:

                       Three months ended June 30,     Six months ended June 30,
                       ---------------------------     -------------------------
                           2001           2000          2001           2000
                           ----           ----          ----           ----
     Net revenues
       United States   $ 1,480,737    $ 1,414,837    $ 2,585,795    $ 2,078,417
       Israel                   --             --             --             --
                       -----------    -----------    -----------    -----------
                       $ 1,480,737    $ 1,414,837    $ 2,585,795    $ 2,078,417
                       ===========    ===========    ===========    ===========
     Net loss
       United States   ($2,225,782)   ($  699,150)   ($4,854,713)   ($2,568,044)
       Israel             (140,963)      (150,782)      (262,135)      (177,032)
                       -----------    -----------    -----------    -----------
                       ($2,366,745)   ($  849,932)   ($5,116,848)   ($2,745,076)
                       ===========    ===========    ===========    ===========


                                       8
<PAGE>

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

Results of Operations

Quarters ended June 30, 2001 and 2000

Product sales revenue totaled  $1,480,737 for the quarter ended June 30, 2001, a
5% increase from  $1,414,837 for the quarter ended June 30, 2000.  Product sales
increases  reflect  market  share  gains  for the  Company's  Lotemax  and Alrex
ophthalmic products.

Cost of goods  sold  for the  quarter  ended  June 30,  2001  totaled  $453,908,
decreasing 5% from $477,162 for the quarter ended June 30, 2000.  The lower cost
of goods sold is due to lower cost of Drug Substance, partially offset by higher
royalty and licensing costs.

Total operating expenses increased $1,114,273 or 54%, from $2,075,209 in 2000 to
$3,189,482  in 2001.  The  increase is primarily  due to increased  research and
development costs.  Depreciation expense and general and administrative expenses
increased to a lesser extent.

Net  research  and  development  expenses  increased  by $960,510 or 107%,  from
$898,331 in 2000 to $1,858,841 in 2000. The Company experienced  increased costs
as a result of a higher level of activity in early discovery programs and higher
spending on the Company's dexanabinol (HU-211) development program.

Selling,  general and  administrative  expenses increased by $95,821 or 9%, from
$1,014,783  in 2000 to  $1,110,604  in 2001.  The increase is  primarily  due to
higher staffing levels.

Depreciation and  amortization  expenses  increased by $51,908,  or 46%, from to
$112,158 in 2000 to $164,066 in 2001, reflecting increased  depreciation expense
relating to laboratory equipment purchases.

Other income / expense,  net, decreased by $491,694,  from income of $287,602 in
2000  to  expense  of  $204,092  in  2001.   Interest  expense,   including  the
amortization  of debt discount and issuance  costs,  related to the  Convertible
Debentures  issued by the Company in the third quarter of 2000,  was the primary
reason for this  change,  partially  offset by  increased  interest  income as a
result of higher average cash balances.

Six Months ended June 30, 2001 and 2000

Product sales revenue totaled $2,505,795 for the six months ended June 30, 2001,
a 21% increase from  $2,078,417 for the six months ended June 30, 2000.  Product
sales increases  reflect market share gains for the Company's  Lotemax and Alrex
ophthalmic products. Additionally, License Fee revenues were $80,000 compared to
zero for the same period in 2000.  The license  income was  primarily  generated
from the licensing of a technology of the Company for use in Japan.

Cost of goods sold for the six  months  ended June 30,  2001  totaled  $865,249,
increasing  14% from $757,691 for the six months ended June 30, 2000. The higher
cost of goods sold is primarily due to higher licensing and royalties associated
with the higher sales volumes.

Total operating expenses increased $2,039,554 or 45%, from $4,500,273 in 2000 to
$6,539,827  in 2001.  The  increase is  principally  due to higher  research and
development  expenses,  and,  to a lesser  extent,  increased  depreciation  and
general and administrative expenses.

Net research and  development  expenses  increased by  $1,623,166  or 70%,  from
$2,335,306  in 2000 to  $3,958,472  in 2001.  The  increase  in R&D  expense  is
primarily due to increased  expenditures,  including increased employee staffing
levels, related to the development of dexanabinol for the treatment of traumatic


                                       9
<PAGE>

brain injury and to increased activity in the Company's  cannabinoid  program to
treat various central nervous system and inflammation-based conditions.

Selling,  general and administrative expenses increased by $257,278 or 14%, from
$1,873,852  in 2000 to  $2,131,130  in 2001.  The increase is  primarily  due to
higher staffing levels.

Depreciation  and  amortization  expenses  increased by $114,069,  or 55%,  from
$209,218 in 2000 to $323,287 in 2001, reflecting increased  depreciation expense
relating to laboratory equipment purchases.

Other income / expense,  net, decreased by $732,038,  from income of $434,471 in
2000 to expense of  $297,567 in 2001.  The primary  cause of this change was the
interest  expense,  including  the  amortization  of debt  discount and issuance
costs, related to the Convertible  Debentures issued by the Company in the third
quarter of 2000. The higher interest  expense was partially  offset by increased
interest income as a result of higher average cash balances.

Liquidity and Capital Resources

While  the  Company  has  generated  revenue  through  the sale of its  approved
products in the market, it has incurred operating losses since its inception. At
June 30,  2001,  the  Company has an  accumulated  deficit of  $95,611,158.  The
Company  has  financed  its  operations  with public and  private  offerings  of
securities,  advances and other funding  pursuant to a marketing  agreement with
BLP, research contracts, license fees, royalties and sales, and interest income.

The  Company  had  working  capital of $13.7  million,  including  cash and cash
equivalents of $17.3 million,  as of June 30, 2001.  During the six months ended
June 30, 2001, the Company received $0.2 million from the exercise of previously
outstanding  warrants  and  options to  purchase  the  Company's  common  stock.
Management  believes  that  existing  cash and cash  equivalents  combined  with
anticipated  cash inflows from  proceeds  from sales of the drug  substance  for
Lotemax and Alrex to BLP,  investment income, R&D grants and the availability of
the  equity  line of  credit,  will  be  sufficient  to  support  the  Company's
continuing  operations.  As of June 30, 2001,  $1.7 million  remained  available
under the equity  line of credit.  The  Company  continues  to  actively  pursue
various  funding  options,  including  additional  equity  offerings,  strategic
corporate  alliances,  business  combinations  and the  establishment of product
related research and development limited partnerships,  to obtain the additional
financing that is required to continue the development of its products and bring
them to commercial markets.

Statements made in this document related to the  development,  commercialization
and market expectations of its drug products,  to the establishment of corporate
collaborations, and to the Company's operational projections are forward-looking
and are made pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. Such statements  involve risks and  uncertainties  which may
cause  results to differ  materially  from those set forth in these  statements.
Among the factors that could result in a  materially  different  outcome are the
inherent   uncertainties   accompanying  new  product  development,   action  of
regulatory  authorities and the results of further trials.  Additional economic,
competitive, governmental, technological, marketing and other factors identified
in Pharmos'  filings with the  Securities and Exchange  Commission  could affect
such results.


                                       10
<PAGE>

                                     Part II

                                Other Information

Item 1  Legal Proceedings                                                 NONE

Item 2  Changes in Securities                                             NONE

Item 3  Defaults upon Senior Securities                                   NONE

Item 4  Submissions of Matters to Vote of Security Holders

      At the Corporation's Annual Meeting of Stockholders held on July 12, 2001,
      the  stockholders  of the  Corporation  elected the  following  persons as
      directors  of the  Corporation  to serve until the next annual  meeting of
      stockholders  and until their  successors  are duly elected and qualified:
      Haim Aviv, Elkan R. Gamzu, Samuel D. Waksal, David Schlachet, Mony Ben Dor
      and Georges Anthony Marcel. The results of the voting were as follows:

                              VOTES FOR               VOTES WITHHELD
                              ---------               --------------
      Haim Aviv               42,272,069                 431,763
      Elkan R. Gamzu          42,279,742                 424,090
      Mony Ben Dor            42,281,039                 422,793
      Samuel D. Waksal        42,183,724                 520,108
      David Schlachet         42,283,942                 419,890
      Georges Anthony Marcel  42,282,822                 421,010

      Also at the Annual Meeting, the stockholders  approved the adoption of the
      2001 Employee  Stock Purchase Plan,  with  41,594,111  votes for approval,
      1,030,636 votes against approval, and 79,085 abstentions.

      Also  at  the  Annual  Meeting,  the  stockholders  ratified  the  Board's
      selection of  PricewaterhouseCoopers  LLP as the Corporation's independent
      auditors for the fiscal year ending  December 31,  2001,  with  42,602,484
      votes for  ratification,  54,831 votes  against  ratification,  and 46,517
      abstentions.

Item 5 Other Information                                              NONE

Item 6 Exhibits and Reports on Form 8-K                               NONE


                                       11
<PAGE>

                                 SIGNATURE PAGE

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.


                                                PHARMOS CORPORATION


Dated: August 13, 2001
                                            by: /s/ Robert W. Cook
                                                ----------------------------
                                                Robert W. Cook
                                                Executive Vice President and
                                                Chief Financial Officer
                                                (Principal Accounting and
                                                  Financial Officer)