**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      DC 20549**

**FORM      10-Q**

**0-14983**

**NUTRITION      21, INC**

|  **New                York**                                                   |   |   **11-2653613**                             |
|-------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|
|  (State                or other jurisdiction of incorporation or organization) |   |                   (I.R.S. Employer Identification No.) |
|                                                                                |   |                                                             |
|  **4                Manhattanville                Road**                       |   |                                                             |
|  **Purchase,                New                York**                          |   |  **10577-2197**                                             |
|  (Address                of Principal Executive Offices)                       |   |  (Zip                Code)                                  |

**(914)      701-4500**

**None**

| Large accelerated filer [                ]  | Accelerated                filer [ X ]  | Non-accelerated                filer [   ]  |
|------------------------------------------------------------|----------------------------------------------|------------------------------------------------------------|

| Class Common                Stock, $0.005 par value per                share | Outstanding                at November 6,                200762,528,918                shares |
|-----------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|

----

**NUTRITION      21, INC.**

**INDEX**

| PART                  I  |  FINANCIAL                  INFORMATION                                       | PAGE                                                                                       |
|--------------------------|------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------|
|                     |                                                                               |                                                                                       |   |
| ITEM                  1  |  Financial                  Statements                                        |                                                                                       |   |
|                     |                                                                               |                                                                                       |   |   |
|                     |                                                                               |  (a)                                                                                  |  Condensed                  Consolidated Balance Sheets at September 30, 2007 |   |   |
|                     |                                                                               |                                                                                       |  and                  June 30, 2007 | 3                  &                  4 |
|                     |                                                                               |                                                                                       |   |   |   |
|                     |                                                                               |  (b)                                                                                  |  Condensed                  Consolidated Statements of Operations for the three |   |   |
|                     |                                                                               |                                                                                       |  month                  periods ended September 30, 2007 and 2006 | 5 |
|                     |                                                                               |                                                                                       |   |   |   |
|                     |                                                                               |  (c)                                                                                  |  Condensed                  Consolidated Statement of Stockholders’ Equity for |   |   |
|                     |                                                                               |                                                                                       |  the                  three month period ended September 30, 2007 | 6 |
|                     |                                                                               |                                                                                       |   |   |   |
|                     |                                                                               |  (d)                                                                                  |  Condensed                  Consolidated Statements of Cash Flows for the three |   |   |
|                     |                                                                               |                                                                                       |  month                  periods ended September 30, 2007 and 2006 | 7 |
|                     |                                                                               |                                                                                       |   |   |   |
|                     |                                                                               |  (e)                                                                                  |  Notes                  to Condensed Consolidated Financial Statements | 8 |
|                     |                                                                               |                                                                                       |   |   |   |
| ITEM                  2  |  Management’s                  Discussion and Analysis of               |                                                                                       |   |
|                     |                                                                               |      Financial                Condition and Results of Operations | 16 |
|                     |                                                                               |                                                                                       |   |   |   |
| ITEM                  3  |  Quantitative                  and Qualitative Disclosures                    |                                                                                       |   |
|                     |                                                                               |  About                  Market Risk                                                   | 18 |
|                     |                                                                               |                                                                                       |   |   |
| ITEM                  4  |  Controls                  and Procedures                                     | 18                                                                                         |
|                     |                                                                               |                                                                                       |   |   |
| PART                  II |  OTHER                  INFORMATION                                           |                                                                                       |   |
|                     |                                                                               |                                                                                       |   |
| ITEM                  2  |  Unregistered                  Sales of Equity Securities and Use of Proceeds | 19                                                                                         |
|                     |                                                                               |                                                                                       |   |   |
| ITEM                  6  |  Exhibits                                                                     |                                                                                       | 19 |

----

**NUTRITION      21, INC.**

|                                                                                                                                                                                                                             |   | September                30,2007(unaudited) |   | June                30,2007(Note                1) |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|----------------------------------------------------|--------|
| **ASSETS**                                                                                                                                                                                                                       |   |                                        |   |                                               |   |
|                                                                                                                                                                                                                             |   |                                        |   |                                               |   |
| Current                assets:                                                                                                                                                                                                   |   |                                        |   |                                               |   |
|                                                                                                                                                                                                                             |   |                                        |   |                                               |   |
| Cash                and cash equivalents                                                                                                                                                                                         |   | $                                           | 15,189 |                                               | $      | 2,417 |   |
| Short-term                investments                                                                                                                                                                                            |   |                                        | 1,000  |                                               |   | 1,000 |   |
| Accounts                receivable (less allowances for doubtful accounts and returns of                $810 and                $827 at September 30, 2007 and June 30, 2007, respectively)                                      |   |                                        | 4,388  |                                               |   | 1,918 |   |
| Other                receivables                                                                                                                                                                                                 |   |                                        | 219    |                                               |   | 344 |   |
| Inventories                                                                                                                                                                                                                      |   |                                        | 3,639  |                                               |   | 3,945 |   |
| Prepaid                expenses and other current assets                                                                                                                                                                         |   |                                        | 2,517  |                                               |   | 1,369 |   |
| Total                current assets                                                                                                                                                                                              |   |                                        | 26,952 |                                               |   | 10,993 |   |
|                                                                                                                                                                                                                             |   |                                        |   |                                               |   |   |   |
| Property                and equipment, net                                                                                                                                                                                       |   |                                        | 56     |                                               |   | 64 |   |
|                                                                                                                                                                                                                             |   |                                        |   |                                               |   |   |   |
| Patents,                trademarks and other amortizable intangibles (net of accumulated                amortization of $23,920 and $23,387 at September 30, 2007 and June                30,                2007, respectively) |   |                                        | 2,879  |                                               |   | 3,271 |   |
|                                                                                                                                                                                                                             |   |                                        |   |                                               |   |   |   |
| Goodwill                                                                                                                                                                                                                         |   |                                        | 14,827 |                                               |   | 14,715 |   |
|                                                                                                                                                                                                                             |   |                                        |   |                                               |   |   |   |
| Other                intangibles with indefinite lives                                                                                                                                                                           |   |                                        | 5,379  |                                               |   | 5,379 |   |
|                                                                                                                                                                                                                             |   |                                        |   |                                               |   |   |   |
| Other                assets                                                                                                                                                                                                      |   |                                        | 1,401  |                                               |   | 272 |   |
|                                                                                                                                                                                                                             |   |                                        |   |                                               |   |   |   |
| TOTAL                ASSETS                                                                                                                                                                                                      |   | $                                           | 51,494 |                                               | $      | 34,694 |   |

----

**NUTRITION      21, INC. **

|    **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | September                30,2007(unaudited) |    | June                30, 2007(Note                1) |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|---------|----------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |
| LIABILITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                        |    |                                                     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |
| Current                liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                        |    |                                                     |   |
|   Short                term                borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                                           | 1,525   |                                                     | $      | -- |   |
|   Accounts                payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                        | 7,295   |                                                     |   | 7,085 |   |
|   Accrued                expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                        | 1,637   |                                                     |   | 1,411 |   |
|   Deferred                income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                        | 3,739   |                                                     |   | 2,929 |   |
|     Total                current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                        | 14,196  |                                                     |   | 11,425 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |   |   |
| Long                term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                        | 2,360   |                                                     |   | 2,342 |   |
| Deferred                income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        | 2,152   |                                                     |   | 2,152 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |   |   |
| 6%                Series I convertible preferred stock subject to mandatory redemption                (redemption value $3,594 at September 30, 2007 and June 30,                2007)                                                                                                                                                                                                                                                                                                                                                      |   |                                        | 2,946   |                                                     |   | 2,838 |   |
| 8%                Series J convertible preferred stock subject to mandatory redemption                (redemption value $17,750 at September 30, 2007)                                                                                                                                                                                                                                                                                                                                                                                      |   |                                        | 10,508  |                                                     |   | -- |   |
|      Total                liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                        | 32,162  |                                                     |   | 18,757 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |   |   |
| Commitments                and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                        |    |                                                     |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |   |   |
| STOCKHOLDERS’                EQUITY:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                        |    |                                                     |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |   |   |
| Preferred                stock, $0.01 par value, authorized 5,000,000 shares, 100,000 shares                designated as Series H, none issued and outstanding, 9,600 shares                designated as Series I convertible preferred stock, 9,600 shares                issued                and 3,594 shares outstanding at September 30, 2007 and June 30, 2007;                17,750 shares designated as Series J convertible preferred stock,                17,750                issued and outstanding at September 30, 2007 |   |                                        | --      |                                                     |   | -- |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |   |   |
| Common                stock, $0.005 par value, authorized 100,000,000 shares; 62,536,793                shares                and 60,946,443 issued and outstanding at September 30, 2007 and June                30,                2007, respectively                                                                                                                                                                                                                                                                                     |   |                                        | 309     |                                                     |   | 301 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |   |   |
| Additional                paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                        | 114,511 |                                                     |   | 107,069 |   |
| Accumulated                deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                        | (95,488 | )                                                        |   | (91,433 | ) |
|     Total                stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                        | 19,332  |                                                     |   | 15,937 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                        |    |                                                     |   |   |   |
| TOTAL                LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                                           | 51,494  |                                                     | $      | 34,694 |   |

----

**NUTRITION      21, INC.**

|                                                                                                 |   | Three                Months Ended |       |
|------------------------------------------------------------------------------------------------------|--------|-----------------------------------|------------|
|                                                                                                 |   | September                30,      |       |
|                                                                                                 |   | 2007                              |       | 2006 |   |
|                                                                                                 |   |                              |       |   |   |
| Net                sales                                                                             |   | $                                 | 12,579     |   | $ | 4,548 |   |
| Other                revenues                                                                        |   |                              | 131        |   |   | 136 |   |
|                                                                                                 |   |                              |       |   |   |   |   |
| TOTAL                REVENUES                                                                        |   |                              | 12,710     |   |   | 4,684 |   |
|                                                                                                 |   |                              |       |   |   |   |   |
| COSTS                AND EXPENSES                                                                    |   |                              |       |   |   |   |   |
|                                                                                                 |   |                              |       |   |   |   |   |
| Cost                of revenues                                                                      |   |                              | 4,015      |   |   | 1,546 |   |
| Advertising                and promotion                                                             |   |                              | 10,515     |   |   | 4,371 |   |
| General                and administrative expenses                                                   |   |                              | 1,085      |   |   | 1,406 |   |
| Research                and development expenses                                                     |   |                              | 309        |   |   | 388 |   |
| Depreciation                and amortization                                                         |   |                              | 542        |   |   | 681 |   |
|                                                                                                 |   |                              |       |   |   |   |   |
| TOTAL                COSTS AND EXPENSES                                                              |   |                              | 16,466     |   |   | 8,392 |   |
|                                                                                                 |   |                              |       |   |   |   |   |
| OPERATING                LOSS                                                                        |   |                              | (3,756     | ) |   | (3,708 | ) |
|                                                                                                 |   |                              |       |   |   |   |   |
| Interest                income                                                                       |   |                              | 33         |   |   | 138 |   |
| Interest                expense                                                                      |   |                              | (327       | ) |   | (539 | ) |
|                                                                                                 |   |                              |       |   |   |   |   |
| LOSS                BEFORE INCOME TAXES                                                              |   |                              | (4,050     | ) |   | (4,109 | ) |
|                                                                                                 |   |                              |       |   |   |   |   |
| Income                taxes                                                                          |   |                              | 5          |   |   | 3 |   |
|                                                                                                 |   |                              |       |   |   |   |   |
| NET                LOSS                                                                              |   | $                                 | (4,055     | ) | $ | (4,112 | ) |
|                                                                                                 |   |                              |       |   |   |   |   |
| Basic                and diluted loss per common share                                               |   | $                                 | (0.07      | ) | $ | (0.08 | ) |
|                                                                                                 |   |                              |       |   |   |   |   |
| Weighted                average number of common shares - basic and diluted                          |   |                              | 61,202,490 |   |   | 52,352,632 |   |
|                                                                                                 |   |                              |       |   |   |   |   |
| See                accompanying notes to condensed consolidated financial                statements. |   |                              |       |   |   |   |   |

----

**NUTRITION      21, INC.**

|                                                                                                                                                  |   |                Common                Stock |         |   | AdditionalPaid-InCapital  |   |   | AccumulatedDeficit |    |   | Total  |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------------|--------|--------------------------------|--------|--------|--------------------|---------|--------|-------------|---------|
|                                                                                                                                                  |   |                                            | Shares  |   |                           | $      |   |               | $  |   |        | $  |   |   | $  |   |
|                                                                                                                                                  |   |                                            |         |   |                           |   |   |               |    |   |        |    |   |   |   |   |
| Balance                at June 30, 2007                                                                                                               |   |                                            | 60,946,443   |   | $                              | 301    |   | $                  | 107,069 |   | $           | (91,433 | ) | $ | 15,937 |   |
|                                                                                                                                                  |   |                                            |         |   |                           |   |   |               |    |   |        |    |   |   |   |   |
| Issuance                of warrants and beneficial conversionfeatures                related to 8% Series J convertiblepreferred                stock |   |                                            | ----         |   |                           | ----   |   |               | 7,241   |   |        | ----    |   |   | 7,241 |   |
|                                                                                                                                                  |   |                                            |         |   |                           |   |   |               |    |   |        |    |   |   |   |   |
| Issuance                of common stock for dividends on Series I preferred stock                                                                     |   |                                            | 52,595       |   |                           | ----   |   |               | 54      |   |        | ----    |   |   | 54 |   |
|                                                                                                                                                  |   |                                            |         |   |                           |   |   |               |    |   |        |    |   |   |   |   |
| Issuance                of common stock for the purchase ofIceland                Health, Inc.                                                        |   |                                            | 1,500,000    |   |                           | 8      |   |               | (8      | )      |        | ----    |   |   | ---- |   |
|                                                                                                                                                  |   |                                            |         |   |                           |   |   |               |    |   |        |    |   |   |   |   |
| Stock-based                compensation expense                                                                                                       |   |                                            | ----         |   |                           | ----   |   |               | 128     |   |        | ----    |   |   | 128 |   |
|                                                                                                                                                  |   |                                            |         |   |                           |   |   |               |    |   |        |    |   |   |   |   |
| Exercise                of stock options                                                                                                              |   |                                            | 37,755       |   |                           | ----   |   |               | 27      |   |        | ----    |   |   | 27 |   |
|                                                                                                                                                  |   |                                            |         |   |                           |   |   |               |    |   |        |    |   |   |   |   |
| Net                loss for the period                                                                                                                |   |                                            | ----         |   |                           | ----   |   |               | ----    |   |        | (4,055  | ) |   | (4,055 | ) |
|                                                                                                                                                  |   |                                            |         |   |                           |   |   |               |    |   |        |    |   |   |   |   |
| Balance                at September 30, 2007                                                                                                          |   |                                            | 62,536,793   |   | $                              | 309    |   | $                  | 114,511 |   | $           | (95,488 | ) | $ | 19,332 |   |

----

**NUTRITION      21, INC.**

|                                                                                                                                                       |   | Three                Months EndedSeptember                30, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                                                                                                                       |   |  2007                                                    |   |  2006 |   |
| Cash                flows from operating activities:                                                                                                       |   |                                                          |   |   |   |
| Net                loss                                                                                                                                    |   | $                                                             | (4,055 | ) | $ | (4,112 | ) |
| Adjustments                to reconcile net loss to net cash used in operating                activities:                                                  |   |                                                          |   |   |   |   |   |
| Depreciation                of property and equipment                                                                                                      |   |                                                          | 9      |   |   | 18 |   |
| Amortization                of intangibles                                                                                                                 |   |                                                          | 533    |   |   | 663 |   |
| Accretion                of preferred stock and amortization of deferred financing                costs                                                    |   |                                                          | 123    |   |   | 423 |   |
| Non-cash                interest expense and accretion on note payable to Iceland                Health                                                    |   |                                                          | 18     |   |   | 16 |   |
| Convertible                preferred stock dividend paid in common stock charged asinterest                expense                                         |   |                                                          | 54     |   |   | 90 |   |
| Stock-based                compensation expense                                                                                                            |   |                                                          | 128    |   |   | 38 |   |
| Changes                in operating assets and liabilities, net of effects from acquisition                of                Iceland Health, Inc. in 2006: |   |                                                          |   |   |   |   |   |
| Accounts                receivable                                                                                                                         |   |                                                          | (2,469 | ) |   | 491 |   |
| Other                receivables                                                                                                                           |   |                                                          | 125    |   |   | 135 |   |
| Inventories                                                                                                                                                |   |                                                          | 306    |   |   | (302 | ) |
| Prepaid                expenses and other current assets                                                                                                   |   |                                                          | (1,148 | ) |   | (657 | ) |
| Accounts                payable                                                                                                                            |   |                                                          | 213    |   |   | 379 |   |
| Accrued                expenses                                                                                                                            |   |                                                          | 227    |   |   | (129 | ) |
| Deferred                income                                                                                                                             |   |                                                          | 810    |   |   | 45 |   |
| Net                cash used in operating activities                                                                                                       |   |                                                          | (5,126 | ) |   | (2,902 | ) |
| Cash                flows from investing activities:                                                                                                       |   |                                                          |   |   |   |   |   |
| Contingent                payments for acquisitions, allocated to goodwill and patents and                trademarks                                       |   |                                                          | (195   | ) |   | (68 | ) |
| Purchases                of property and equipment                                                                                                         |   |                                                          | (1     | ) |   | (2 | ) |
| Payments                for patents and trademarks                                                                                                         |   |                                                          | (63    | ) |   | (24 | ) |
| Redemption                of investments available for sale                                                                                                |   |                                                          | --     |   |   | 2,500 |   |
| Cash                portion of purchase price for Iceland Health, Inc., net of cash                acquired                                                |   |                                                          | --     |   |   | (430 | ) |
| Net                cash (used in) provided by investing activities                                                                                         |   |                                                          | (259   | ) |   | 1,976 |   |
| Cash                flows from financing activities:                                                                                                       |   |                                                          |   |   |   |   |   |
| Proceeds                from stock option and warrant exercises                                                                                            |   |                                                          | 27     |   |   | 393 |   |
| Proceeds                from private placement of 8% Series J convertible preferred stock,                netof                issuance costs              |   |                                                          | 16,605 |   |   | -- |   |
| Proceeds                from short-term borrowings                                                                                                         |   |                                                          | 1,525  |   |   | -- |   |
| Net                cash provided by financing activities                                                                                                   |   |                                                          | 18,157 |   |   | 393 |   |
| Net                increase (decrease) in cash and cash equivalents                                                                                        |   |                                                          | 12,772 |   |   | (533 | ) |
| Cash                and cash equivalents at beginning of period                                                                                            |   |                                                          | 2,417  |   |   | 2,414 |   |
| Cash                and cash equivalents at end of period                                                                                                  |   | $                                                             | 15,189 |   | $ | 1,881 |   |

----

**NUTRITION      21, INC.**

|   | Note                1 | BASIS                OF PRESENTATION |
|--------|-----------------------|--------------------------------------|

|   |   | The                accompanying unaudited condensed consolidated financial statements                have                been prepared pursuant to the rules and regulations of the Securities                and                Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q and do not                include all of the information and note disclosures required by accounting                principles generally accepted in the United States of America.                Accordingly, the unaudited condensed consolidated financial statements                should be read in conjunction with the Company’s audited consolidated                financial statements and notes thereto for the fiscal year ended                June 30,                2007 included in the Company’s Annual Report on Form 10-K/A filed on                October 24, 2007 (the “Form 10-K/A”). The accompanying unaudited condensed                consolidated financial statements reflect all adjustments (consisting                of                normal recurring adjustments) which are, in the opinion of the management,                considered necessary for a fair presentation of financial position,                results of operations and cash flows for the interim periods. The                June 30,                2007 balance sheet has been derived from the audited financial statements                included in the Form 10-K/A. Operating results for the three month                periods                ended September 30, 2007 are not necessarily indicative of the results                that may be expected for the fiscal year ending June 30,                2008. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | The                accompanying unaudited condensed consolidated financial statements                include                the accounts of Nutrition 21, Inc. and its subsidiaries, including                Iceland                Health, LLC from August 26, 2006 date of acquisition, collectively                the                “Company”. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Certain                reclassifications have been made to prior year’s financial statement                amounts to conform to the current                year. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Note 2 | SHORT-TERM              INVESTMENTS |
|--------|--------|-------------------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | Investments                in marketable debt securities with maturities beyond three months                are                classified as current assets because of their highly-liquid nature.                All                short-term investments are classified as available for sale and are                recorded at fair value. Realized gains and losses are determined                using the                specific identification method. Unrealized gains and losses would                be                reflected in Accumulated Other Comprehensive Income, if                material. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Short-term                investments are comprised as follows (in                thousands): |
|--------|--------|-----------------------------------------------------------------------------------------------|

|                                       | September                30,2007 | June                30,2007 |
|--------------------------------------------|----------------------------------|-----------------------------|
| Auction                rate securities (1) | $1,000                           |  $1,000                |
|                                       |                             |                        |

|   |   | (1)Auction                rate securities have short-term interest rates that generally can                be reset                every 28 days. The auction rate securities have long-term maturity                dates                and provide the Company with enhanced yields. However, we believe                we have                the ability to quickly liquidate them at their original cost, although                there is no guaranty and, accordingly, they are carried at cost which                approximates fair value, and classified as current assets. All income                generated from these investments is recorded as interest                income. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|

|   | Note                3 | STOCK-BASED                COMPENSATION |
|--------|-----------------------|-----------------------------------------|

|   |   | Since                July 1, 2005, share-based employee compensation cost has been measured                at                the grant date, based on the estimated fair value of the award, and                is                recognized as expense over the requisite service period. The Company                has                no awards with market or performance conditions. The Company adopted                the                provisions of revised Statement of Financial Accounting Standards                No. 123                (“FAS 123R”) “Share Based Payments” on July 1, 2005. The valuation                provisions of FAS 123R apply to new awards and to awards that were                outstanding on the effective date and subsequently modified or cancelled.                Estimated compensation expense for awards outstanding on the effective                date are being recognized over the remaining service period using                the                compensation cost as of the grant date originally calculated for                pro forma                disclosure purposes under FAS Statement No. 123, “Accounting for                Stock-Based Compensation” (“FAS 123”). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**NUTRITION      21, INC.**

|   | Note                3 | STOCK-BASED                COMPENSATION (continued) |
|--------|-----------------------|-----------------------------------------------------|

|   |   |   |
|--------|--------|--------|

|   |   | On                November 10, 2005, the FASB issued FASB Staff Position No. FAS 123R-3,                “Transition Election Related to Accounting for Tax Effects of Share-Based                Payment Awards.” The Company has elected to adopt the alternative                transition method provided in this FASB Staff Position for calculating                the                tax effects of share-based compensation pursuant to FAS 123R. The                alternative transition method includes a simplified method to establish                the beginning balance of the additional paid-in capital pool (“APIC pool”)                related to the tax effects of employee share-based compensation,                which is                available to absorb tax deficiencies recognized subsequent to the                adoption                of FAS 123R. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | The                Company did not grant any options or restricted shares during the                three                month periods ended September 30, 2007 and                2006. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | The                Company recorded $128 thousand and $38 thousand in share-based                compensation expense for stock options and restricted stock in the                three                month periods ended September 30, 2007 and 2006, respectively. Share-based                compensation expense is recorded in general and administrative                expenses. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | At                September 30, 2007, total unrecognized compensation cost related                to                non-vested awards was $0.6 million, which is expected to be recognized                over a weighted average period of 2.8                years. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | The                following is a summary of option activity for the three month period                ended                September 30, 2007. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|     **Options**              |   |    **Shares****(000)** |   |   **Weighted-****Average****Exercise                Price** |   | **Weighted-****Average****Remaining**** ****Contractual****Term                (Yrs.)** |   |   **Aggregate****Intrinsic                Value****($000)** |   |
|--------------------------------------------------|--------|---------------------------------------|--------|-----------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|
| Outstanding                at July 1, 2007       |   |                                  | 4,112  |                                                                  | $      | 0.91                                                                                         |   |                                                                  |   |   |   |   |   |
| Granted                                          |   |                                  | --     |                                                                  |   | --                                                                                           |   |                                                                  |   |   |   |   |   |
| Exercised                                        |   |                                  | (38    | )                                                                     | $      | 0.72                                                                                         |   |                                                                  |   |   |   |   |   |
| Forfeited                or expired              |   |                                  | (85    | )                                                                     | $      | 1.83                                                                                         |   |                                                                  |   |   |   |   |   |
| Outstanding                at September 30, 2007 |   |                                  | 3,989  |                                                                  | $      | 0.89                                                                                         |   |                                                                  | 5.9    |   | $ | 1,020 |   |
| Exercisable                at September 30, 2007 |   |                                  | 3,223  |                                                                  | $      | 0.79                                                                                         |   |                                                                  | 5.9    |   | $ | 972 |   |

|   **Restricted                Stock**  |   |  **Shares****(000)** |   |  **Weighted-****Average****Exercise                Price** |   | **Weighted-****Average****Remaining****Contractual****Term                (Yrs.)** |   |  **Aggregate****Intrinsic                Value****($000)** |   |
|--------------------------------------------------|--------|---------------------------|--------|-----------------------------------------------------------------|--------|------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|
| Outstanding                at July 1, 2007       |   |                      | 501    |                                                            | $      | 1.57                                                                               |   |                                                            |   |   |   |   |   |
| Granted                                          |   |                      | --     |                                                            |   | --                                                                                 |   |                                                            |   |   |   |   |   |
| Exercised                                        |   |                      | --     |                                                            |   | --                                                                                 |   |                                                            |   |   |   |   |   |
| Forfeited                or expired              |   |                      | (8     | )                                                               | $      | 1.42                                                                               |   |                                                            |   |   |   |   |   |
| Outstanding                at September 30, 2007 |   |                      | 493    |                                                            | $      | 1.57                                                                               |   |                                                            | 2.4    |   | $ | -- |   |
| Exercisable                at September 30, 2007 |   |                      | --     |                                                            |   | --                                                                                 |   |                                                            | --     |   |   | -- |   |

----

**NUTRITION      21, INC.**

----

**NUTRITION      21, INC.**

|  Net                  identifiable tangible assets                         |   | $      | 181    |   |
|---------------------------------------------------------------------------------|--------|--------|--------|--------|
|  Other                  intangibles with indefinite lives                  |   |   | 5,379  |   |
|  Customer                  relationships                                   |   |   | 924    |   |
|  Non-compete                  agreements                                   |   |   | 375    |   |
|  Goodwill                                                                  |   |   | 14,827 |   |
|  Deferred                  tax liability                                   |   |   | (2,152 | )      |
|         Purchase                  Price |   | $      | 19,534 |   |

|                                                     |   | Consolidated                  Pro-forma |   |
|----------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                     |   | Three                  months Ended     |   |
|                                                     |   | September                  30,          |   |
|                                                     |   | 2006                                    |   |
| Total                  revenues                          |   | $                                       | 9,911  |   |
|                                                     |   |                                    |   |   |
| Net                  loss                                |   | $                                       | (3,971 | ) |
|                                                     |   |                                    |   |   |
| Basic                  and diluted loss per common share |   | $                                       | (0.08  | ) |
|                                                     |   |                                    |   |   |

----

**NUTRITION      21, INC.**

|                                                                                                                                                                                                                             |   | Three                months endedSeptember                30, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                             |   |                  2007                                    |   | 2006 |   |
| Supplemental                disclosure of cash flow information:                                                                                                                                                                 |   |                                                          |   |   |   |
|                                                                                                                                                                                                                             |   |                                                          |   |   |   |
|     Cash                paid for income taxes                                                                                                                                                                |   | $                                                             | 10     |   | $ | 7 |   |
|  Supplemental                schedule of non-cash financing activities:                                                                                                                                                     |   |                                                          |   |   |   |   |   |
| Increase                in obligation for Nutrition 21 contingent payments                                                                                                                                                       |   | $                                                             | 138    |   | $ | 145 |   |
|     Issuance                of                common shares on conversion of 564 shares of Series I                convertible    preferred                stock     |   |                                                          | --     |   | $ | 570 |   |
|     Issuance                of                common stock for purchase of Iceland Health, Inc.                                                                                                              |   |                                                          | --     |   |   | 15,472 |   |
|     Issuance                of                note payable for purchase of Iceland Health, Inc.                                                                                                              |   |                                                          | --     |   |   | 2,282 |   |

----

**NUTRITION      21, INC.**

** **

----

**NUTRITION      21, INC.**

|                                             |   | Three                MonthsEnded |   |
|--------------------------------------------------|--------|----------------------------------|--------|
|                                             |   | September                30,     |   | September                30, |   |
|                                             |   | 2007                             |   | 2006 |   |
| Net                sales                         |   |                             |   |   |   |
| Ingredients                Group                 |   | $                                | 2,119  |   | $ | 1,559 |   |
| Branded                Products Group            |   |                             | 10,460 |   |   | 2,989 |   |
|                                             |   |                             |   |   |   |   |   |
| Sales                to external customers       |   |                             | 12,579 |   |   | 4,548 |   |
| Other                revenues                    |   |                             | 131    |   |   | 136 |   |
|                                             |   |                             |   |   |   |   |   |
| Total                revenues                    |   | $                                | 12,710 |   | $ | 4,684 |   |
|                                             |   |                             |   |   |   |   |   |
| Income                (loss) before income taxes |   |                             |   |   |   |   |   |
| Ingredients                Group                 |   | $                                | 1,337  |   | $ | 761 |   |
| Branded                Products Group            |   |                             | (3,289 | ) |   | (2,129 | ) |
| Unallocated                corporate expenses    |   |                             | (2,098 | ) |   | (2,741 | ) |
|                                             |   |                             |   |   |   |   |   |
| Loss                before income taxes          |   | $                                | (4,050 | ) | $ | (4,109 | ) |
|                                             |   |                             |   |   |   |   |   |
| Unallocated                corporate assets      |   | $                                | 51,430 |   | $ | 40,103 |   |
|                                             |   |                             |   |   |   |   |   |

----

**NUTRITION      21, INC.**

----

**Item      2 - Management’s Discussion and Analysis of Financial Condition and Results of      Operations**

**Forward-Looking      Statements and Risk Factors**

**General**

|   |   | Cost                of revenues includes both direct and indirect manufacturing costs.                Research and development expenses include internal expenditures as                well as                expenses associated with third party providers. Advertising and promotion                expenses include fees and expenses directly related to the selling                of the                Company’s products including the cost of advertising, promotional expenses                and third party fees. General and administrative expenses include                salaries                and overhead, third party fees and expenses, and costs associated                with the                operations of the Company. The Company capitalizes patent costs and                intangible assets with finite lives, and amortizes them over periods                not                to exceed seventeen years. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   | **Results                of Operations** |
|--------|--------|--------|------------------------------------------|

----

**Item      2 - Management’s Discussion and Analysis of Financial Condition and Results of      Operations (continued)**

----

**Item      3 - Quantitative and Qualitative Disclosures about Market      Risk**

**Item      4 - Controls and Procedures**

----

**PART      II - OTHER INFORMATION**

**Items      1, 1A, 3, 4 and 5 and are not applicable and have been      omitted**

**Item      2 - Unregistered Sales of Equity      Securities and Use of Proceeds**

**Item      6 - Exhibits **

| **(a)  ** | **Exhibits** |
|---------------------|--------------|

| 31.1                   | Certifications                of the President and Chief Executive Officer pursuant to Section                302 of                the Sarbanes-Oxley Act of 2002. |
|--------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2                   | Certifications                of the Chief Financial Officer pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002. |
|--------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| 32.1                   | Certifications of the President and Chief Executive              Officer pursuant to Section 906 of the Sarbanes-Oxley Act of              2002. |
|--------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2                   | Certification                of the Chief Financial Officer pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002. |
|--------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

----

**NUTRITION      21, INC.**

**SIGNATURES**

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

|                                |                                                                                                                                          |
|-------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|                           |                                                                                                                                     |    |
| Date:              November 9, 2007 | By:                                                                                                                                 | /s/ Paul              Intlekofer |
|                                | Paul IntlekoferPresident                  andChief                    Executive Officer(Principal                    Executive Officer)  |

----