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 March 31, 2000

                         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 May 1, 2000, the Registrant had outstanding  52,485,197 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>
                                                             March 31,       December 31,
                                                               2000              1999
                                                           -------------    -------------
<S>                                                        <C>              <C>
Assets
   Cash and cash equivalents                               $  19,087,900    $   2,918,554
   Inventories                                                 1,698,383        1,837,751
   Receivables                                                   503,315          961,769
   Prepaid royalties                                             279,177          284,193
   Prepaid expenses and other current assets                     279,197          222,391
                                                           -------------    -------------
        Total current assets                                  21,847,972        6,224,658

   Fixed assets, net                                           1,226,823        1,183,859
   Prepaid royalties, net of current portion                     121,078          166,477
   Intangible assets, net                                        186,583          198,214
   Other assets                                                   18,086           18,086
                                                           -------------    -------------

        Total assets                                       $  23,400,542    $   7,791,294
                                                           -------------    -------------


Liabilities and Shareholders' Equity
   Note payable                                            $          --    $     338,128
   Accounts payable                                              574,905          680,054
   Accrued expenses                                              458,305          711,189
   Accrued wages and other compensation                          693,734          549,542
   Advances against future sales                               2,062,000        2,010,000
                                                           -------------    -------------
        Total current liabilities                              3,788,944        4,288,913

   Advances against future sales, net of current portion         893,838        1,177,565
   Other liabilities                                             100,000          100,000
                                                           -------------    -------------
        Total liabilities                                      4,782,782        5,566,478
                                                           -------------    -------------

   Shareholders' equity
   Common stock, $.03 par value; 80,000,000 shares
       authorized, 52,459,197 and 45,424,401 shares
       issued and  outstanding (excluding $551 in 2000
       and 1999, held in Treasury) in 2000 and 1999,
       respectively                                            1,573,962        1,362,181
     Paid in capital                                         101,449,049       83,372,742
     Accumulated deficit                                     (84,405,251)     (82,510,107)
                                                           =============    =============
        Total shareholders' equity                            18,617,760        2,224,816
                                                           =============    =============

   Commitments and contingencies

        Total liabilities and shareholders' equity         $  23,400,542    $   7,791,294
                                                           =============    =============
</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 March 31,
                                                              2000            1999
                                                          ------------    ------------
<S>                                                       <C>             <C>
Revenues
    Product sales                                         $    663,580    $    332,377

Cost of Goods Sold                                             280,529          89,258
                                                          ------------    ------------

Gross Margin                                                   383,051         243,119
                                                          ------------    ------------

Expenses
    Research and development, net                            1,436,975         933,674
    Selling, general and administrative                        859,069         550,936
    Patents                                                     31,960          35,905
    Depreciation and amortization                               97,060          81,335
                                                          ------------    ------------

       Total operating expenses                              2,425,064       1,601,850
                                                          ------------    ------------

Loss from operations                                        (2,042,013)     (1,358,731)

Other income
    Interest income                                            146,931          33,700
    Other income (expense), net                                 (6,102)        (16,177)
    Interest expense                                             6,040          (1,369)
                                                          ------------    ------------
    Other income, net                                          146,869          16,154
                                                          ------------    ------------

Net loss                                                    (1,895,144)     (1,342,577)

    Less : Preferred stock dividends                              --           (16,829)
                                                          ------------    ------------

Net loss applicable to common shareholders                ($ 1,895,144)   ($ 1,359,406)
                                                          ============    ============

Net loss per share applicable
    to common stockholders - basic and diluted            ($      0.04)   ($      0.03)
                                                          ============    ============


Weighted average shares outstanding - basic and diluted     48,982,681      40,180,840
                                                          ============    ============
</TABLE>


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



                                       3
<PAGE>



Pharmos Corporation
(Unaudited)
Consolidated Statements of Cash Flows
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                       Three Months Ended March 31,
                                                           2000            1999
                                                       ------------    ------------
<S>                                                    <C>             <C>
Cash flows from operating activities
  Net loss                                             ($ 1,895,144)   ($ 1,342,577)
  Adjustments to reconcile net loss to net
    cash flow used in operating activities
       Depreciation and amortization                         97,060          81,335
  Changes in operating assets and liabilities
       Inventory                                            139,368          45,514
       Receivables                                          458,454         152,337
       Prepaid expenses and other current assets            (56,806)          1,959
       Advanced royalties                                    50,415          17,104
       Other assets                                            --           (16,341)
       Accounts payable                                    (105,149)       (423,597)
       Accrued expenses                                    (252,884)        208,582
       Accrued wages                                        144,192          38,055
                                                       ------------    ------------

       Total adjustments                                    474,650         104,948
                                                       ------------    ------------

  Net cash flows used in operating activities            (1,420,494)     (1,237,629)

Cash flows from investing activities
     Purchases of fixed assets, net                        (128,393)       (110,937)
                                                       ------------    ------------

  Net cash flows used in investing activities              (128,393)       (110,937)

Cash flows from financing activities
     Advances against future sales                         (231,727)       (127,285)
     Proceeds from issuances of common stock
         and exercise of warrants, net                   16,695,838            --
     Proceeds from exercise of equity credit line         1,592,250       1,156,266
     Decrease in notes payable                             (338,128)           --
                                                       ------------    ------------

Net cash provided by financing activities                17,718,233       1,028,981

Net increase (decrease) in cash and cash equivalents     16,169,346        (319,585)

Cash and cash equivalents at beginning of year            2,918,554       3,452,916
                                                       ------------    ------------

Cash and cash equivalents at end of period             $ 19,087,900    $  3,133,331
                                                       ============    ============
</TABLE>


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


                                       4
<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   period  ended  March  31,  2000,  are  not
     necessarily  indicative  of the results  that may be expected  for the year
     ended December 31, 2000.


1.   The Company

     Pharmos  Corporation (the "Company") is a  bio-pharmaceutical  company that
     develops and  commercializes  products for the ophthalmic,  central nervous
     system,  neurological and other key healthcare  markets.  The Company has a
     diverse  product  pipeline  that includes  marketed  products with superior
     therapeutic indices, and drug candidates with enhanced molecular structures
     that display  improved  safety and/or efficacy  properties  compared to the
     parent  molecules  or to  competing  products.  The Company  has  executive
     offices in Iselin,  New Jersey and also  conducts  operations  through  its
     wholly owned subsidiary, Pharmos, Ltd., in Rehovot, Israel.

     In March 1998,  the Company  received  approval for three separate New Drug
     Applications  ("NDA") from the U.S. Food and Drug  Administration  ("FDA").
     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 March 31, 2000,  the Company has an  accumulated  deficit of
     $84,405,251.  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 $19.1  million as of March 31,  2000,  combined  with
     anticipated  cash inflows from  revenues  derived from sales of Lotemax and
     Alrex, will be sufficient to support the Company's continuing operations.

     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 shipment 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.

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


                                       5
<PAGE>


Pharmos Corporation
Notes to Condensed Consolidated Financial Statements


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 1999 have been  reclassified  to conform to the fiscal
     2000  presentation.  Such  reclassifications  did not have an impact on the
     Company's financial position or results of operations.

4.   Collaborative Agreements

     In  June  1995,  the  Company  entered  into  a  marketing  agreement  (the
     "Marketing Agreement") with Bausch & Lomb Pharmaceuticals,  Inc. ("Bausch &
     Lomb") 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 third loteprednol etabonate based product, LE-T. Under
     the Marketing Agreement,  Bausch & Lomb purchases the active drug substance
     (loteprednol  etabonate)  from the Company.  A second  agreement,  covering
     Europe,  Canada and other selected  countries,  was signed in December 1996
     ("the New Territories Agreement").

     Through  March 31,  2000,  Bausch and Lomb has provided the Company with $5
     million in cash advances  against future sales, of which  approximately  $3
     million was  outstanding at March 31, 2000. An additional $1 million is due
     from Bausch & 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 during the following  twelve months,  based on management's
     estimate of product sales to Bausch & Lomb, has been presented as a current
     liability in the accompanying  balance sheet at March 31, 2000 and December
     31, 1999.

     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.

5.   Common and Preferred Stock Transactions

     During the first quarter of 2000,  the Company issued  4,500,000  shares of
     its  common  stock  in  various   private   equity   sales,   and  received
     consideration, net of offering costs and expenses, of $12,648,383.

     During the first quarter of 2000,  the Company issued  2,184,728  shares of
     its common  stock upon the  exercise  of stock  options and  warrants,  and
     received consideration of $4,035,855.

     The Company  entered into a Private  Equity Line of Credit  Agreement  (the
     "Credit Agreement") as of December 10, 1998, and as amended on December 18,
     1998, with Dominion  Capital Fund, Ltd.,  which  subsequently  assigned its
     rights to Centennial Parkway LLC (the "Investor"). Pursuant to the terms of
     the Credit Agreement, the Company may, from time to time during a specified
     term,  cause the Investor to purchase up to an aggregate of  $10,000,000 of
     the Company's  common stock, par value $.03 per share (the "Common Stock").
     The price per share of  Common  Stock to be paid by the  Investor  is to be
     determined  at the time of each purchase  according to a specified  formula
     which is based upon the average  closing  bid price of the Common  Stock on
     the  principal  trading  exchange  or  market  for the  Common  Stock  (the
     "Principal Market") over a prescribed,  five-day period. With each purchase
     of Common Stock, the Investor is also to receive warrants exercisable for a
     number of shares of Common  Stock  equal to ten  percent  of the  number of
     shares of Common Stock  purchased  at an exercise  price per share equal to
     125% of the closing bid price of the Common Stock on the  Principal  Market
     on a specified date.


                                       6
<PAGE>


Pharmos Corporation
Notes to Condensed Consolidated Financial Statements


     During the first quarter of 2000, under terms of the Credit Agreement,  the
     Company  issued 368,424 shares of its Common Stock and warrants to purchase
     38,588  shares of its Common  Stock to the Investor  for  consideration  of
     $1,592,250,  net of fees.  The warrants have exercise  prices  ranging from
     $2.19 to $16.80 per share and expire in the first quarter of 2003.

     During the first quarter of 2000, the Company  issued  warrants to purchase
     8,000  shares of its common  stock as  compensation  to a  consultant.  The
     warrants were immediately exercisable,  have an exercise price of $1.19 per
     share and expire by February 2005.

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 months ending March 31, 2000 and 1999
     are as follows:

                                       2000           1999
                                       ----           ----
     Net revenues
       United States               $   663,580    $   332.377
       Israel                             --             --
                                   -----------    -----------
                                   $   663,580    $   332,377
                                   ===========    ===========
     Net loss
       United States               ($1,868,894)   ($1,308,455)
       Israel                          (26,250)       (34,122)
                                   -----------    -----------
                                   ($1,895,144)   ($1,342,577)
                                   ===========    ===========


                                       7
<PAGE>


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

Results of Operations

Quarters ended March 31, 2000 and 1999

Product sales revenue  totaled  $663,580 for the quarter ended March 31, 2000, a
100% increase from $332,377 for the quarter ended March 31, 1999.  Product sales
increases  reflect  market  share  gains  for the  Company's  Lotemax  and Alrex
ophthalmic  products  and  additional  stocking  of Alrex in  advance of a price
increase  effective April 2000. Product revenues for the quarter ended March 31,
2000 were below product  revenues for the quarter ended December 31, 1999.  This
decline is due to seasonal factors in the demand for the Company's  products and
a price  increase  effective  January 2000 for Lotemax  which led to  additional
stocking in the quarter ended December 31, 1999.

Cost of goods  sold for the  quarter  ended  March 31,  2000  totaled  $280,529,
increasing  214% from $89,258 for the quarter  ended March 31, 1999.  The higher
cost of goods sold is due to higher sales volumes,  product sample  expenses and
higher royalty and licensing costs.

Total operating  expenses  increased $823,214 or 51%, from $1,601,850 in 1999 to
$2,425,064  in 2000.  The  increase  is  primarily  due to higher  research  and
development expenses, as well as increased general and administrative expenses.

Net  research  and  development  expenses  increased  by $503,301  or 54%,  from
$933,674 in 1999 to $1,436,975 in 2000. Cost increases  partially  resulted from
higher regulatory costs for the Company's ophthalmic products,  including filing
fees for product approvals in Europe. Also, the Company experienced higher costs
as a result of a higher level of activity in early discovery programs and higher
professional   consulting   spending  on  clinical   studies  of  the  Company's
dexanabinol (HU-211) drug candidate.

General and administrative  expenses increased by $308,133 or 56%, from $550,936
in 1999 to $859,069 in 2000.  The increase is primarily  due to higher  employee
costs.

Depreciation and  amortization  expenses  increased by $15,725,  or 19%, from to
$81,335 in 1999 to $97,060 in 2000,  reflecting  increased  depreciation expense
relating to laboratory equipment purchases in 1999.

Other income,  net,  increased by $130,715,  from $16,154 in 1999 to $146,869 in
2000. Interest income increased 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
March 31,  2000,  the Company has an  accumulated  deficit of  $84,405,251.  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 $18.1  million,  including  cash and cash
equivalents  of $19.1  million,  as of March 31, 2000.  During the quarter ended
March  31,  2000,   the  Company   raised  $12.6  million  from  various  equity
transactions  and $4.0  million  from the  exercise  of  previously  outstanding
warrants and options to purchase the Company's common stock.

On December 10, 1998,  the Company  obtained a $10 million equity line of credit
with a single institutional  investor.  During the quarter ended March 31, 2000,
the Company raised $1.6 million from the equity line of credit.  As of March 31,
2000, $2.3 million remained available under the equity line of credit.


                                       8
<PAGE>


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.  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.



                                       9
<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  Submission of Matters to Vote of Security Holders                  NONE

Item 5  Other Information                                                  NONE

Item 6  Exhibits and Reports on Form 8-K                                   NONE



                                       10
<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: May 12, 2000
                                        by:  /s/ Robert W. Cook
                                             --------------------------
                                             Robert W. Cook
                                             Vice President Finance and
                                             Chief Financial Officer
                                             (Principal Accounting and
                                             Financial Officer)



                                       11