UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended December 31, 2001

[ ]  TRANSITION REPORT  PURSUANT  TO  SECTION  13  OR 15(d)  OF  THE  SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _________________ to ________________________ .

                         Commission File Number 0-14983

                               NUTRITION 21, INC.
                               ------------------
             (Exact Name of Registrant as Specified in its Charter)

             New York                                   11-2653613
------------------------------------       -----------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

         4 Manhattanville Road
         Purchase, New York                                10577-2197
----------------------------------------        --------------------------------
(Address of Principal Executive Offices)                   (Zip Code)

Registrant's telephone number, including Area Code:       (914) 701-4500
                                                      --------------------------

           Securities registered pursuant to Section 12(b) of the Act:
                                      None
                                      ----

           Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock (par value $.005 per share)
                    ---------------------------------------
                                 Title of Class

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 twelve (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 ninety (90) days.

         Yes   X             No
             ----               -------


The number of shares outstanding of Registrant's Common Stock as  of February 8,
2002:  32,362,423.


<PAGE>

                               NUTRITION 21, INC.

                                      INDEX

PART I     FINANCIAL INFORMATION                                          PAGE


ITEM 1     Consolidated Financial Statements (unaudited)


           Consolidated Balance Sheets at December 31, 2001
              and June 30, 2001                                            3


           Consolidated Statements of  Operations for the three
              and six months ended December 31, 2001 and 2000              5


           Consolidated Statement of Stockholders' Equity for
              the six months ended December 31, 2001                       6


           Consolidated Statements of Cash Flows for the six
              months ended December 31, 2001 and 2000                      7


           Notes to Consolidated Financial Statements                      8


ITEM 2     Management's Discussion and Analysis of
           Financial Condition and Results of Operations                   12

ITEM 3     Quantitative and Qualitative Disclosures
           About Market Risk                                               16

PART II    OTHER INFORMATION

ITEM 1     Legal Proceedings                                               17

ITEM 6     Exhibits and Reports on Form 8-K                                17



                                       2
<PAGE>

                               NUTRITION 21, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                        December 31,          June 30,
                                                                            2001                2001
                                                                           ------              -----
                                                                         (unaudited)          (Note 1)
<S>                                                                         <C>                <C>
ASSETS

Current assets:
    Cash and cash equivalents                                               $5,003             $5,355
    Accounts receivable (less allowance for doubtful accounts of
     $25 at December 31, 2001 and $45 at June 30, 2001)                      1,896              3,963

    Other receivables                                                        1,774              1,650

    Inventories                                                              1,181              1,322

    Prepaid expense and other current assets                                   511                475
                                                                           -------            -------
         Total current assets                                               10,365             12,765
Property and equipment, net                                                    524                633
Patents and trademarks (net of accumulated amortization of
$11,514 at December 31, 2001 and $10,375 at June 30, 2001)                  17,617             18,682
Goodwill                                                                     7,026              6,491
Other assets                                                                   312                316
                                                                           -------            -------
TOTAL ASSETS                                                               $35,844            $38,887
                                                                           =======            =======
</TABLE>

See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                               NUTRITION 21, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)


<TABLE>
<CAPTION>
                                                                                            December 31,      June 30,
                                                                                                2001            2001
                                                                                               ------          -----
LIABILITIES, REDEEMABLE PREFERRED STOCK AND                                                  (unaudited)      (Note 1)
 STOCKHOLDERS' EQUITY
<S>                                                                                           <C>              <C>
Current liabilities;
      Current portion of long-term debt                                                       $    --          $1,125
      Accounts payable and accrued expenses                                                     1,801           3,371
      Contingent payments payable                                                               1,132           1,855
      Preferred dividends payable                                                                  12              22
                                                                                              -------         -------
             Total current liabilities                                                          2,945           6,373

Other long-term obligations                                                                       104             122
                                                                                              -------         -------
TOTAL LIABILITIES                                                                               3,049           6,495
                                                                                              -------         -------
Commitments and contingent liabilities
REDEEMABLE PREFERRED STOCK:
Series E convertible preferred, 1,500 shares issued:                                               --             191
    191 shares outstanding at June 30, 2001.
Series F convertible preferred, 575 shares issued:                                                 --             227
    169 shares outstanding at June 30, 2001.

STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, authorized 5,000,000 shares
    Series G convertible preferred,  1,769 shares issued: 941 shares outstanding
    at December 31, 2001 and June 30, 2001,  respectively (aggregate liquidation
    value - $953)                                                                                 941             941
Common stock, $0.005 par value, authorized 65,000,000 shares;
    32,498,423 shares issued at December 31, 2001 and 32,342,815 shares issued at
    June 30, 2001.                                                                                162             161
Additional paid-in capital                                                                     63,389          63,196
Accumulated deficit                                                                          (31,575)        (32,324)
Less treasury stock, at cost, 136,000 common shares                                             (122)              --
                                                                                              -------         -------
TOTAL STOCKHOLDERS' EQUITY                                                                    $32,795         $31,974
                                                                                              -------         -------
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK
  AND STOCKHOLDERS' EQUITY                                                                    $35,844         $38,887
                                                                                              =======         =======
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

                               NUTRITION 21, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except share and per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                   Three Months Ended             Six Months Ended
                                                      December 31,                   December 31
                                                 2001            2000           2001            2000
                                                ------          ------         ------          ------
<S>                                             <C>             <C>            <C>             <C>
Net sales                                       $2,837          $4,410         $6,632          $9,666
Other revenues                                      75             200            229           1,847
                                                ------         -------         ------          ------

REVENUES                                         2,912           4,610          6,861          11,513
Cost of goods sold                                 871           1,127          2,111           2,840
                                                ------         -------         ------          ------
GROSS PROFIT                                     2,041           3,483          4,750           8,673
  Research and development expenses                225             559            410           1,510
  Selling, general and administrative
  expenses                                       1,776           2,408          3,458           5,546
  Depreciation and amortization                    665             665          1,321           1,841
  Restructuring and other charges                   --           2,448             --           2,448
                                                ------         -------         ------          ------

OPERATING LOSS                                   (625)         (2,596)          (439)         (2,672)

Interest income                                     20              64             65             198
Interest expense                                    22              65             50             141
Other income, net                                   --             204          1,794             231
                                                ------         -------         ------          ------
(LOSS) INCOME BEFORE INCOME TAXES                (627)         (2,393)          1,370         (2,384)

Income tax (benefit)                             (252)           (479)            466           (475)
                                                ------         -------         ------          ------

NET (LOSS) INCOME                               $(375)        $(1,914)          $ 904        $(1,909)
                                                ======        ========          =====        ========

  Basic (loss) earnings per share              $(0.02)         $(0.06)          $0.02         $(0.06)
                                               =======         =======          =====         =======

  Diluted (loss) earnings per share            $(0.02)         $(0.06)          $0.02         $(0.06)
                                               =======         =======          =====         =======

  Weighted average number of common
  shares - basic                            32,242,337      31,272,876     32,291,648      31,427,151
                                            ==========      ==========     ==========      ==========

  Weighted average number of common
  shares and equivalents - diluted          32,242,381      31,299,304     32,308,400      31,548,775
                                            ==========      ==========     ==========      ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

                               NUTRITION 21, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        (in thousands, except share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                Additional
                                        Preferred Stock                             Paid-In    Accumulated    Treasury
                                           Series G             Common Stock        Capital      Deficit        Stock      Total
                                           --------             ------------        -------      -------        -----      -----
                                        Shares      $      Shares(1)         $         $            $            $            $
                                        ------      -      ---------         -         -            -            -            -
<S>                                       <C>      <C>     <C>             <C>      <C>         <C>            <C>         <C>
Balance at June 30, 2001                  941      $941    32,342,818      $161     $63,196     $(32,324)      $   --      $31,974


Preferred stock dividends declared         --        --            --        --          --          (40)          --         (40)
Conversion of Series E preferred
stock to common stock                                         155,605         1         193            --                      194
Premium on redemption of Series F
preferred stock                            --        --            --        --          --         (115)          --        (115)
Repurchase of common stock for
treasury                                   --        --     (136,000)        --          --            --       (122)        (122)
Net income for the period                  --        --            --        --          --           904          --          904
                                          ---      ----    ----------      ----     -------     ---------      ------      -------
Balance at December 31, 2001              941      $941    32,362,423      $162     $63,389     $(31,575)      $(122)      $32,795
                                          ===      ====    ==========      ====     =======     =========      ======      =======
</TABLE>




See accompanying notes to consolidated financial statements.



-----------------
(1) Net of shares held in treasury.

                                       6
<PAGE>

                               NUTRITION 21, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                Six Months Ended
                                                                                  December 31,
                                                                               2001          2000
                                                                               ----          ----
<S>                                                                            <C>         <C>
Cash flows from operating activities:
    Net income (loss)                                                          $904        $(1,909)

    Adjustments to reconcile net income (loss) to net cash provided by
    operating activities:
        Depreciation and amortization                                         1,321           1,840
        Gain on sale of assets                                                 (40)              --
        Changes in operating assets and liabilities:
           Accounts receivable                                                2,067           1,306
           Other receivables                                                     76            (87)
           Inventories                                                          125             246
           Prepaid and other current assets                                    (36)            (83)
           Other assets                                                           4              22
           Accounts payable and accrued expenses                            (1,589)         (1,132)
                                                                            -------         -------
               Net cash provided by operating activities                      2,832             203
                                                                            -------         -------
Cash flows from investing activities:
    Contingent payments for acquisitions                                    (1,512)         (3,650)
    Purchases of property and equipment                                         (6)           (133)
    Payments for patents and trademarks                                       (131)           (138)
    Proceeds from sale of assets                                                100               3
                                                                            -------         -------
        Net cash used in investing activities                               (1,549)         (3,918)
                                                                            -------         -------
Cash flows from financing activities:
    Debt repayments                                                         (1,125)           (750)
    Preferred stock dividends paid                                             (43)            (58)
    Purchase of common stock for treasury                                     (122)              --
    Redemption of redeemable preferred stock                                  (345)              --
                                                                            -------         -------
        Net cash used in financing activities                               (1,635)           (808)
                                                                            -------         -------
Net decrease in cash and cash equivalents                                     (352)         (4,523)
Cash and cash equivalents at beginning of period                              5,355           8,488
                                                                            -------         -------
Cash and cash equivalents at end of period                                  $ 5,003         $ 3,965
                                                                            =======         =======
</TABLE>


See accompanying notes to consolidated financial statements.


                                       7
<PAGE>

                               NUTRITION 21, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       ($ in thousands, except share data)
                                   (unaudited)

     Note 1   BASIS OF PRESENTATION

              The accompanying  unaudited consolidated financial statements have
              been prepared in accordance with accounting  principles  generally
              accepted in the United  States for interim  financial  information
              and  with  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  accounting   principles
              generally  accepted in the United  States for  complete  financial
              statements.   In  the  opinion  of  management,   all  adjustments
              (consisting of normal recurring adjustments)  considered necessary
              for a fair presentation have been included.  Operating results for
              the three-and  six month  periods ended  December 31, 2001 are not
              necessarily indicative of the results that may be expected for the
              year ending June 30, 2002.

              The  balance  sheet at June 30,  2001  has been  derived  from the
              audited  financial  statements at that date,  but does not include
              all  of  the  information  and  footnotes  required  by  generally
              accepted accounting principles for complete financial statements.

              For  further  information,  refer  to the  consolidated  financial
              statements and footnotes  thereto included in the Company's annual
              report on Form 10-K for the year ended June 30, 2001.

              Certain  reclassifications  have  been  made to the  prior  period
              amounts in order to conform to the current period presentation.

  Note 2      SIGNIFICANT ACCOUNTING PRONOUNCEMENTS

              In July 2001,  the  Financial  Accounting  Standards  Board (FASB)
              issued statement of Financial  Accounting  Standards  ("SFAS") No.
              141,  "Business  Combinations,"  and SFAS No. 142,  "Goodwill  and
              Other  Intangible  Assets."  SFAS No. 141 prohibits the use of the
              pooling-of-interests    method   of   accounting    for   business
              combinations  initiated  after June 30, 2001. SFAS No. 142 changes
              the way  companies  account for goodwill in that  goodwill will no
              longer be amortized,  but should be tested for impairment at least
              annually.  The Company  elected to adopt early SFAS No. 142 in the
              quarter  ended   September  30,  2001.  See  Note  9  for  further
              discussion  on the  impact  of  SFAS  No.  142 on  Nutrition  21's
              financial position and results of operations.

              In October 2001, the FASB issued SFAS No. 144, "Accounting for the
              Impairment or Disposal of Long-Lived Assets." The FASB's new rules
              on asset  impairment  supersede SFAS No. 121,  "Accounting for the
              Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be
              Disposed of," and will be effective for the Company's  fiscal year
              beginning July 1, 2002.  Management  does not anticipate  that the
              adoption of SFAS No. 144 will have a material  impact on Nutrition
              21's financial position or results of operations.

     Note 3   INVENTORIES

              The  components of  inventories  at December 31, 2001 and June 30,
              2001 were:

                                                     December 31,      June 30,
                                                        2001             2001
                                                        ----             ----

                      Raw materials                     $325              $471
                      Finished goods                     856               851
                                                      ------            ------
                      Total inventories               $1,181            $1,322
                                                      ======            ======

                                       8
<PAGE>

                               NUTRITION 21, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       ($ in thousands, except share data)
                                   (unaudited)

     Note 4   REDEEMABLE PREFERRED STOCK

              During the six months ended  December 31, 2001,  227 shares of the
              Company's  Series F  Preferred  Stock (F  preferred)  and  accrued
              dividends  thereon were  redeemed  for $345.  As a result of these
              transactions, the Company recorded a premium on redemption of $115
              representing  the  excess  of  the  consideration  paid  over  the
              carrying value of the then outstanding F preferred.

              During the six months ended  December 31, 2001,  191 shares of the
              Company's Series E Preferred Stock and accrued  dividends  thereon
              were converted into 155,605 shares of the Company's common stock.

     Note 5   EARNINGS PER SHARE

              The  following  table  sets  forth  the  computation  of basic and
              diluted earnings (loss) per share for the periods indicated.

<TABLE>
<CAPTION>
        Basic and diluted earnings (loss) per                          Three months ended              Six months ended
        share:                                                            December 31,                    December 31,
                                                                     2001              2000           2001           2000
                                                                     ----              ----           ----           ----
<S>                                                            <C>             <C>            <C>            <C>
        Net (loss) income                                          $(375)        $(1,914)           $904       $(1,909)
            Less: Dividends on preferred shares                      (17)            (27)           (40)           (56)
                 Premium on redemption of
                 preferred stock                                     (85)              --          (115)             --
                                                                   ------          ------         ------         ------
        Net (loss) income available to common
        stockholders                                               $(477)        $(1,941)           $749       $(1,965)
                                                                   ======        ========           ====       ========
        Weighted average shares:                               32,242,337      31,272,876     32,291,648     31,427,151
                                                               ==========      ==========     ==========     ==========
        Basic (loss) earnings per share                           $(0.02)         $(0.06)          $0.02        $(0.06)
                                                                  =======         =======          =====        =======
        Diluted (loss) earnings per share
        computation:
        Net (loss) income available to common
        stockholders                                               $(477)        $(1,941)           $749       $(1,965)
          Add:  Dividends on preferred stock                           --              --             --             --
                                                                       --              --             --             --
        Net (loss) income available to common
        stockholders                                               $(477)        $(1,941)           $749       $(1,965)
                                                                   ======        ========           ====       ========
        Weighted average shares:                               32,242,337      31,272,876     32,291,648     31,427,151
          Plus incremental shares from assumed conversions:

            Preferred stock                                            --              --             --             --
            Stock option plans                                         44          26,428         16,752        121,624
                                                               ----------      ----------     ----------     ----------
        Adjusted weighted average shares                       32,242,381      31,299,304     32,308,400     31,548,775
                                                               ==========      ==========     ==========     ==========
        Diluted (loss) earnings per share                         $(0.02)         $(0.06)          $0.02        $(0.06)
                                                                  =======         =======          =====        =======
</TABLE>

         Diluted  (loss)  earnings per share for the three and six month periods
         ended  December  31, 2001 and 2000,  does not  reflect the  incremental
         shares from the assumed  conversion of preferred  stock  (1,247,756 and
         614,617 shares,  respectively) as the effect of such inclusion would be
         antidilutive.


                                       9
<PAGE>

                               NUTRITION 21, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (in thousands, except share data)
                                   (unaudited)

     Note 6   OTHER INCOME

              In the six months ended December 31, 2001, the Company recorded as
              other  income  $1.8  million   from  the   settlement   of  patent
              infringement  claims related to chromium  picolinate and a sale of
              assets.  At December 31, 2001,  cash proceeds of $0.9 million from
              the  settlements  and $0.2  million  from the sale of assets to an
              Officer of the Company, remain to be collected.

     Note 7   INCOME TAXES

              The effective tax rate for the  six-month  periods ended  December
              31, 2001 and 2000 was 34.0%.

     Note 8   SEGMENT REPORTING

              A summary of business data for the Company's  reportable  segments
              is as follows:

              Information by business segment (in thousands):

<TABLE>
<CAPTION>
                                                           Three months ended             Six months ended
                                                              December 31,                   December 31,
                                                          2001           2000            2001             2000
                                                          ----           ----            ----             ----
<S>                                                     <C>          <C>               <C>            <C>
               REVENUES
               Nutritional Products                     $2,791         $4,576          $6,675           $9,966
               Pharmaceutical Products                     121             34             186            1,547
                                                        ------         ------          ------          -------
                                                        $2,912         $4,610          $6,861          $11,513
                                                        ======         ======          ======          =======

               OPERATING INCOME (LOSS)
               Nutritional Products                     $(683)       $(2,568)          $(396)         $(4,118)
               Pharmaceutical Products                      58           (28)            (43)            1,446
                                                        ------       --------          ------         --------
                                                        $(625)       $(2,596)          $(439)         $(2,672)
                                                        ======       ========          ======         ========
</TABLE>

         The operations of the Company are principally in the United States.

         One nutritional  product segment customer  accounted for  approximately
         29% of the segment revenue in the six months ended December 31, 2001.

     Note 9   INTANGIBLE ASSETS

              The Company  adopted SFAS No. 142  effective  July 1, 2001.  Under
              SFAS No. 142,  goodwill is no longer  amortized  but  reviewed for
              impairment  annually,  or more  frequently  if certain  indicators
              arise.  The Company is required to complete  the initial step of a
              transitional impairment test within six months of adoption of SFAS
              No.  142  and to  complete  the  final  step  of the  transitional
              impairment  test by the end of the fiscal year.  If  indicators of
              impairment  arise,  including  but not limited  to, a  significant
              adverse  change in the business  environment  or regulatory  areas
              that may affect the Company's projected cash flows associated with
              income producing  intangible assets there can be no assurance that
              the  Company  may not  incur  impairment  charges  in the  future.
              Goodwill  in the amount of $4.1  million  included  in patents and
              trademarks since acquisition (although accounted for separately by
              the Company and included therein because of its estimated economic
              life) has been reclassified in the accompanying  balance sheets in
              accordance with the  requirements of SFAS No. 142. Had the Company
              been  accounting  for its  goodwill  under  SFAS  No.  142 for all
              periods presented, the Company's net income and earnings per share
              would have been as follows:


                                       10
<PAGE>

     Note 9   INTANGIBLE ASSETS, (CONTINUED)

<TABLE>
<CAPTION>
                                                         Three months ended          Six months ended
                                                            December 31,                December 31,
                                                         2001           2000        2001           2000
                                                         ----           ----        ----           ----
<S>                                                   <C>            <C>           <C>          <C>
Reported net (loss) income:                            $(375)       $(1,914)        $904       $(1,909)
                                                       ------       --------        ----
  Add back goodwill amortization, net of tax              ---             62         ---            128
                                                       ------       --------        ----       --------
Adjusted net income (loss)                             $(375)       $(1,852)        $904       $(1,781)
                                                       ======       ========        ====       ========
Basic (loss) earnings per share:
  Reported net loss,                                  $(0.02)        $(0.06)       $0.02        $(0.06)
                                                      -------        -------       -----
  Goodwill amortization, net of tax                       ---            ---         ---            ---
                                                      -------        -------       -----        -------
Adjusted (loss) net income                            $(0.02)        $(0.06)       $0.02        $(0.06)
                                                      =======        =======       =====        =======
Diluted earnings per share:
  Reported net loss,                                  $(0.02)        $(0.06)       $0.02        $(0.06)
                                                      -------        -------       -----        -------
  Goodwill amortization, net of tax                       ---            ---         ---            ---
                                                          ---            ---         ---            ---
Adjusted net income                                   $(0.02)        $(0.06)       $0.02        $(0.06)
                                                      =======        =======       =====        =======
</TABLE>


     Note 10  SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                                  Six months Ended
                                                                                    December 31 ,


                                                                                   2001       2000
                                                                                   ----       ----

<S>                                                                              <C>          <C>
         Supplemental disclosure of cash flow information:
               Cash paid for interest                                            $ 50         $132
               Cash paid for income taxes                                        $759         $161

         Supplemental schedule of non-cash financing activities:
               Obligation for purchase of property and equipment                 $137         $181
               Obligation for N21 contingent payments                            $217         $369
               Obligation for Lite Bites contingent payment                      $915         $945
               Issuance of common stock for Series E conversion                  $194           --
</TABLE>



                                       11
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
           OF OPERATIONS


           The  following  discussion  should  be read in  conjunction  with the
           consolidated  financial  statements  and related notes thereto of the
           Company included elsewhere herein.

           GENERAL

           The Company's revenues have been primarily derived from: (i) the sale
           of  nutrition  products  to  manufacturers  of  vitamin  and  mineral
           supplements  and,  (ii) the sale of nutrition  bars and other related
           dietary supplement products marketed under the trademark "Lite Bites"
           and "Brite  Bites" (the "Lite Bites  Business").  The Company has, in
           addition,  received  royalty  and  license  income  from users of its
           patented technology.

           Cost of goods sold  includes  both direct and indirect  manufacturing
           costs.  Research  expenses include  internal  expenditures as well as
           expenses associated with third party providers.  Selling, general and
           administrative  expenses include  salaries and overhead,  third party
           fees and expenses,  royalty expenses for licenses and trademarks, and
           costs  associated  with the selling of the  Company's  products.  The
           Company capitalizes patent costs and acquisition-related goodwill and
           intangible assets,  and amortizes them,  excluding goodwill effective
           July 1, 2001, over periods of one to twenty years.

           RESULTS OF OPERATIONS

           REVENUES

           Net sales for the three and six month periods ended December 31, 2001
           of $2.8  million  and  $6.6  million,  respectively,  decreased  $1.6
           million and $3.1 million, respectively, when compared to $4.4 million
           and $9.7 million for the same periods a year ago. The decrease is due
           primarily  to a  softness  in retail  sales of  vitamin  and  mineral
           supplements as well as continuing industry consolidation.

           Other revenues of $0.1 million and $0.2 million for the three and six
           month periods ended  December 31, 2001,  respectively,  declined $0.1
           million and $1.6  million,  respectively,  when  compared to the same
           periods a year ago.  Other revenues for the six months ended December
           2000 included $1.5 million of non-recurring  license fees earned from
           Biosynexus Incorporated in accordance with License Agreements entered
           into in August 2000.

           COST OF GOODS SOLD

           Cost of goods sold for the three and six month periods ended December
           2001 of $0.9 million and $2.1 million,  respectively,  decreased $0.2
           million and $0.7 million, respectively, when compared to $1.1 million
           and $2.8 million,  respectively, for the same periods a year ago. The
           reduction  in cost of goods  primarily  reflects  the impact of lower
           sales for the three and six months ended  December  31,  2001.  Gross
           margin  on  product  sales of 69.3%  and  68.2% for the three and six
           month periods ended December 31, 2001, respectively, declined 5.1 and
           2.4  percentage  points,  respectively,  when  compared  to the  same
           periods a year  earlier.  The decline is due primarily to the product
           mix, with lower margin products  accounting for a greater  proportion
           of the Company's revenues.

           RESEARCH AND DEVELOPMENT EXPENSES

           Research  costs of $0.2  million  and $0.4  million for the three and
           six-month  periods ended December 31, 2001,  respectively,  decreased
           $0.3 million and $1.1  million,  respectively,  when compared to $0.5
           million and $1.5 million,  respectively,  for the same periods a year
           ago. The decrease in fiscal 2001  principally  reflects  cost savings
           attributable  to the  restructuring  undertaken by the Company in the
           second  quarter  of  fiscal  2001,  and  the  Company's  decision  to
           terminate its Internet business at that time.


                                       12
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
           OF OPERATIONS (CONTINUED)

           SELLING GENERAL AND ADMINISTRATIVE EXPENSES (SG&A)

           SG&A expenses for the three and six month periods ended  December 31,
           2001 of $1.8 million and $3.5 million  respectively,  decreased  $0.6
           million and $2.1 million, respectively, when compared to $2.4 million
           and $5.6 million in the same periods a year ago.  The  decreases  are
           due  primarily  to  cost  savings  attributable  to  a  restructuring
           undertaken by the Company  during the second  quarter of fiscal 2001;
           reductions  in  advertising  and  consulting  expenditures;  and  the
           non-recurrence  of a one-time  charge of $0.6 million  related to the
           departure  of the  Company's  previous  CEO recorded in the six month
           period ended December 31, 2000.

           DEPRECIATION AND AMORTIZATION

           Depreciation  and  amortization  for the three and six month  periods
           ended   December  31,  2001  of  $0.7   million  and  $1.3   million,
           respectively,   compared   to  $0.7   million   and   $1.8   million,
           respectively,  for the same  periods a year ago. The decrease for the
           six   months   is   due   primarily   to   the    expiration   of   a
           composition-of-matter  patent in August  2000 and early  adoption  of
           accounting  pronouncements  relating to goodwill and other intangible
           assets. See Note 9.

           OPERATING LOSS

           Operating loss for the three and six month periods ended December 31,
           2001 was $0.6 million and $0.4 million, respectively,  compared to an
           operating  loss of $2.6 million and $2.7 million,  respectively,  for
           the same  periods a year ago. The decrease in the amount of operating
           loss in fiscal 2001  principally  reflects  that fiscal 2000  results
           were  negatively  impacted by $2.4 million of costs and other charges
           relating to a  restructuring  undertaken  by the  Company  during the
           second quarter of fiscal 2001.

           OTHER INCOME

           Other  income for the six months ended  December  31, 2001,  was $1.8
           million due primarily to amounts  earned on the  settlement of patent
           infringement  lawsuits,  as well as gains  resulting  from  licensing
           certain  rights  to sell  lysostaphin  for  research  purposes  to an
           Officer of the Company.

           INCOME TAX (BENEFIT)

           Income  tax  (benefit)  for the three  and  six-month  periods  ended
           December 31, 2001,  were ($0.3) million and $0.5 million  compared to
           ($0.5)  million for the same  periods a year ago. The  effective  tax
           rate was 34% for the six months  ended  December  31,  2001.  For the
           six-month period ended December 31, 2000, the company's effective tax
           benefit was 20% due  primarily to the  estimated  realization  of the
           Company's  federal net loss carry forwards  generated  during the six
           months ended December 31, 2000.

           BUSINESS SEGMENT

           The Company operates in two business segments,  Nutritional  Products
           and Pharmaceutical Products.

           NUTRITIONAL PRODUCTS

           Nutritional  product  revenues  for the three  and six month  periods
           ended  December  31,  2001,  were  $2.8  million  and  $6.7  million,
           respectively,   a  decrease  of  $1.8   million  and  $3.2   million,
           respectively,  when  compared  to  $4.6  million  and  $9.9  million,
           respectively,  for the same  periods  a year  ago.  The  decrease  in
           revenues is primarily  due to the softness in retail sales of vitamin
           and mineral supplements as well as continuing industry consolidation.


                                       13
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
           OF OPERATIONS (CONTINUED)

           Nutritional  products  operating  loss  was  $0.7  million  and  $0.4
           million,  respectively,  for the three and six  month  periods  ended
           December  31, 2001 as compared to an  operating  loss of $2.6 million
           and $4.1 million,  respectively, for the same periods a year ago. The
           decrease in the amount of operating  loss in fiscal 2001  principally
           reflects  that fiscal 2000 results were  negatively  impacted by $2.4
           million  of costs  and  other  charges  relating  to a  restructuring
           undertaken by the Company during the second quarter of fiscal 2001.

           PHARMACEUTICAL PRODUCTS

           Pharmaceutical  product revenues were $121 thousand and $186 thousand
           for the three and six month periods ended December 31, 2001, compared
           to $34  thousand and $1.5  million in the  comparable  periods a year
           ago.  There were no  significant  license  fees earned in the current
           fiscal periods, in comparison with the $1.5 million in fees earned in
           the prior fiscal year.

           Pharmaceutical  products  operating  income was $58  thousand for the
           three months ended  December 31, 2001 and a $43 thousand loss for the
           six months ended  December 31, 2001 as compared to an operating  loss
           of $28 thousand in the three months ended  December 31, 2000 and $1.4
           million income for the six months ended December 31, 2000. There were
           no significant license fees earned in the current periods,  which was
           the primary reason for the decline.

           LIQUIDITY AND CAPITAL RESOURCES

           Cash and cash  equivalents  at December  31,  2001 were $5.0  million
           compared to $5.4 million at June 30,  2001.  As of December 31, 2001,
           the Company had working  capital of $7.4  million  compared to a $6.4
           million as of June 30, 2001. The increase in working  capital was the
           result  of  funds  due  from  the  successful  settlement  of  patent
           infringement litigation.

           During the six  months  ended  December  31,  2001,  net cash of $1.5
           million was used in investing activities compared to net cash of $3.9
           million used in investing activities for the comparable period a year
           ago. Contingent  payments for acquisitions  declined $2.1 million due
           to decreases in sales. Cash used in financing  activities for the six
           months  ended  December  31, 2001 was $1.6  million  compared to $0.8
           million for the same period a year ago.  During the six months  ended
           December  31, 2001, a cash payment of $1.1 million was made to payoff
           the  Company's   outstanding  term  loan  with  Citizens  Bank.  This
           repayment  was made in  connection  with the Company  obtaining a new
           line of credit with another bank. In addition,  cash was used for the
           redemption of Series F preferred  stock and the  repurchase of common
           stock.

           The Company's  primary  sources of financing are cash  generated from
           continuing operations and up to $4.0 million from a revolving line of
           credit expiring  December 14, 2002, with Fleet National Bank based on
           certain  criteria.  At December 31, 2001, the availability  under the
           revolving line of credit was $1.9 million.  At December 31, 2001, the
           Company had no borrowings under the revolving line of credit.

           The Company  believes that cash  generated  from  operations and cash
           available under the line of credit will provide sufficient  liquidity
           to fund operations for the next twelve months.

           Future  acquisition  activities  and any  increases in marketing  and
           research and development expenses over the present levels may require
           additional   funds.   The  Company  intends  to  seek  any  necessary
           additional funding through arrangements with corporate collaborators,
           through public or private sales of its securities,  including  equity
           securities, or through bank financing arrangements.  The Company does
           not currently have any specific arrangements for additional financing
           and  there  can be no  assurance  that  additional  funding  will  be
           available at all or on terms acceptable to the Company.


                                       14
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
             OF OPERATIONS (CONTINUED)


           SIGNIFICANT ACCOUNTING PRONOUNCEMENTS

           In  June  2001,  the  Financial  Accounting  Standards  Board  issued
           Statements  of  Financial  Accounting  Standards  No.  141  "Business
           Combinations",  and No. 142 "Goodwill and other  Intangible  Assets",
           effective for fiscal years beginning  after December 15, 2001.  Under
           the new  rules,  goodwill  will no  longer be  amortized  but will be
           subject to annual impairment tests in accordance with the Statements.
           If indicators of  impairment  arise,  including but not limited to, a
           significant adverse change in the business  environment or regulatory
           areas that may affect the Company's  projected cash flows  associated
           with income  producing  intangible  assets  there can be no assurance
           that the  Company  may not incur  impairment  charges in the  future.
           Other  intangible  assets will  continue to be  amortized  over their
           useful lives.

           In October 2001,  the FASB issued SFAS No. 144,  "Accounting  for the
           Impairment or Disposal of Long-Lived Assets." The FASB's new rules on
           asset  impairment   supersede  SFAS  No.  121,  "Accounting  for  the
           Impairment  of  Long-Lived  Assets  and for  Long-Lived  Assets to be
           Disposed  of," and will be effective  for the  Company's  fiscal year
           beginning  July 1,  2002.  Management  does not  anticipate  that the
           adoption  of SFAS No.  144 will have a material  impact on  Nutrition
           21's financial position or results of operations.












                                       15
<PAGE>

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

           Market  risk  represents  the risk of changes in value of a financial
           instrument,  derivative or non-derivative,  caused by fluctuations in
           interest rates, foreign exchange rates and equity prices. The Company
           has no  financial  instruments  that  give  it  exposure  to  foreign
           exchange rates or equity prices.




















                                       16
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

           The company in the ordinary course of its business has brought patent
           infringement  actions  against  companies  that it believes have sold
           chromium  picolinate in violation of the Company's patent rights.  As
           of this date,  the Company has one action  pending and is  evaluating
           bringing additional actions.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a)  EXHIBITS

              None

         (b)  REPORTS

              None.











                                       17
<PAGE>

                                NUTRITION 21, INC

                                   SIGNATURES

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



                                                       NUTRITION 21, INC.
                                                       ------------------
                                                           Registrant




Date:  February 13, 2002     By:  /s/ GAIL MONTGOMERY
                                  -------------------
                                  Gail Montgomery
                                  President and Chief Executive Officer
                                  (Principal Executive Officer)



                                  /s/ ALAN J. KIRSCHBAUM
                                  ----------------------
                                  Alan J. Kirschbaum
                                  Sr. Vice President, Finance and Administration
                                  and Chief Financial Officer
                                  (Principal Financial Officer)

                                       18