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

                                    FORM 10-Q

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

For the quarterly period ended March 31, 2004

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

For the transition period from _________________ to ________________________ .

                         Commission File Number 0-14983

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

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


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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve (12) months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past ninety (90) days.

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


The number of shares outstanding of Registrant's Common Stock as of May 7, 2004:
37,991,988


<PAGE>

                               NUTRITION 21, INC.

                                      INDEX


PART I      FINANCIAL INFORMATION                                           PAGE
------      ---------------------                                           ----

ITEM 1      Condensed Consolidated Financial Statements (unaudited)

            Condensed Consolidated Balance Sheets at March 31, 2004
                 and June 30, 2003                                             3

            Condensed Consolidated Statements of Operations for the three
                 months and nine months ended March 31, 2004 and 2003          5

            Condensed Consolidated Statement of Stockholders' Equity for
                 the nine months ended March 31, 2004                          6

            Condensed Consolidated Statements of Cash Flows for the nine
                 months ended March 31, 2004 and 2003                          7

            Notes to Condensed Consolidated Financial Statements               8

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

ITEM 3      Quantitative and Qualitative Disclosures
            About Market Risk                                                 14

ITEM 4      Controls and Procedures                                           14

PART II     OTHER INFORMATION

ITEM 1      Legal Proceedings                                                 15

ITEM 6      Exhibits and Reports on Form 8-K                                  15


                                       2
<PAGE>

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

                                                            March 31,   June 30,
                                                              2004         2003
                                                              ----         ----
                                                           (unaudited)  (Note 1)
ASSETS

Current assets:
   Cash and cash equivalents                                 $3,426       $4,059
   Short-term investments                                     1,000           --
   Accounts receivable (less allowance for doubtful
   accounts and returns of $10 at March 31, 2004 and
   $430 at June 30, 2003)                                     1,360        1,140

   Other receivables                                            984        1,100

   Inventories                                                1,010        1,135

   Prepaid expense and other current assets                     280          196
                                                          ----------    --------
      Total current assets                                    8,060        7,630

Property and equipment, net                                     357          479
Patents, trademarks and other intangibles (net of
accumulated amortization of $14,821 at March 31, 2004
and $13,334 at June 30, 2003)                                 9,434       10,612
Other assets                                                    188          199
                                                          ----------    --------
TOTAL ASSETS                                                $18,039      $18,920
                                                          ==========    ========

See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>


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

                                                           March 31,    June 30,
                                                              2004        2003
                                                              ----        ----
LIABILITIES AND STOCKHOLDERS' EQUITY                      (unaudited)   (Note 1)

Current liabilities:
    Accounts payable and accrued expenses                     $2,784      $3,456
    Contingent payments payable for acquisitions                  44          26
    Preferred dividends payable                                   --           2
                                                          ----------    --------

TOTAL LIABILITIES                                              2,828       3,484
                                                          ----------    --------

Commitments and contingencies

STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, authorized 5,000,000
shares
   Series G convertible preferred, 1,769 shares issued;
   188 shares outstanding at June 30, 2003                        --         188
Common stock, $0.005 par value, authorized 65,000,000 shares;
   37,991,988 shares issued and outstanding at March
   31, 2004 and 33,602,990 shares issued and
   outstanding at June 30, 2003                                  190         168
Additional paid-in capital                                    67,325      64,103
Accumulated deficit                                         (52,304)    (49,023)
                                                          ----------    --------
TOTAL STOCKHOLDERS' EQUITY                                    15,211      15,436
                                                          ----------    --------
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $18,039     $18,920
                                                          ==========    ========

See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                      Three Months Ended          Nine Months Ended
                                                           March 31,                   March 31,
                                                     2004          2003          2004          2003
                                                   --------      --------      --------      --------
<S>                                                 <C>           <C>           <C>            <C>
Net sales                                            $2,577        $3,082        $7,230        $8,605
Other revenues                                           71            50           171           175
                                                   --------      --------      --------      --------

TOTAL REVENUES                                        2,648         3,132         7,401         8,780
Cost of goods sold                                      451         1,021         1,596         2,811
                                                   --------      --------      --------      --------
GROSS PROFIT                                          2,197         2,111         5,805         5,969
Research & development expenses                         682         1,155         1,723         1,995
Selling, general & administrative expenses            2,009         1,764         5,762         5,786
Depreciation & amortization                             540           649         1,619         2,046
                                                   --------      --------      --------      --------
OPERATING (LOSS)                                     (1,034)       (1,457)       (3,299)       (3,858)
Interest income                                          19            13            36            54
Interest expense                                          5             5            18            27
                                                   --------      --------      --------      --------

(LOSS) BEFORE INCOME TAXES                           (1,020)       (1,449)       (3,281)       (3,831)

Income tax (benefit)                                   --            (306)         --            (306)
                                                   --------      --------      --------      --------

NET (LOSS)                                          $(1,020)      $(1,143)      $(3,281)      $(3,525)
                                                   ========      ========      ========      ========

Basic and diluted (loss) per common share            $(0.03)       $(0.03)       $(0.09)       $(0.11)
                                                   ========      ========      ========      ========

Weighted average number of common shares
- basic and diluted                              37,991,988    33,602,990    36,362,739    33,211,855
                                                 ==========    ==========    ==========    ==========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>

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



<TABLE>
<CAPTION>
                                                                                  Additional
                                                                                    Paid-In    Accumulated
                                  Preferred Stock            Common Stock           Capital      Deficit        Total
                                     Series G
                               Shares          $          Shares          $            $            $             $
                            ----------    ----------    ----------   ----------   ----------   ----------    ----------
<S>                              <C>           <C>      <C>              <C>         <C>         <C>            <C>
Balance at June 30, 2003           188          $188    33,602,990         $168      $64,103     $(49,023)      $15,436

Charge for stock
appreciation rights                 --            --            --           --           29           --            29
Exercise of stock options           --            --        10,000           --            6           --             6
Issuance of warrants to
purchase 20,000 shares
of common stock for
services                            --            --            --           --           16           --            16

Conversion of Series G
preferred stock to
common stock                      (188)         (188)      316,498            2          186           --            --
Private placement of
common stock                        --            --     4,062,500           20        2,985           --         3,005
Net loss for the period             --            --            --           --           --       (3,281)       (3,281)
                            ----------    ----------    ----------   ----------   ----------   ----------    ----------

Balance at March 31, 2004           --    $       --    37,991,988         $190      $67,325     $(52,304)      $15,211
                            ==========    ==========    ==========   ==========   ==========   ==========    ==========
</TABLE>


See accompanying notes to condensed consolidated financial statements.


                                       6
<PAGE>

                               NUTRITION 21, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                ($ in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                 Nine Months Ended
                                                                     March 31,
                                                                  2004       2003
                                                                -------    -------
Cash flows from operating activities:
<S>                                                             <C>        <C>
   Net (loss)                                                   $(3,281)   $(3,525)
   Adjustments to reconcile net (loss) to net cash (used in)/
   provided by operating activities:
     Depreciation and amortization                                1,619      2,046
     Issuance of warrants for services                               16         24
     Other non-cash items                                            29         --
     Changes in operating assets and liabilities:
        Accounts receivable                                        (220)       759
        Other receivables                                           116        793
        Inventories                                                 125        135
        Prepaid expense and other current assets                    (84)       481
        Other assets                                                 11         --
        Accounts payable and accrued expenses                      (672)      (403)
                                                                -------    -------
          Net cash (used in)/provided by operating activities    (2,341)       310
                                                                -------    -------

Cash flows from investing activities:
   Contingent payments for acquisitions                             (99)      (106)
   Purchases of property and equipment                              (10)       (88)
   Payments for patents and trademarks                             (192)      (248)
   Redemption of investments available for sale                   1,350      1,000
   Purchase of investments available for sale                    (2,350)        --
                                                                -------    -------
     Net cash (used in)/provided by investing activities         (1,301)       558
                                                                -------    -------
Cash flows from financing activities:
   Preferred stock dividends paid                                    (2)       (17)
   Purchase of common stock for treasury                             --        (38)
   Proceeds from stock option exercises                               6         --
     Net proceeds from private placement                          3,005         --
                                                                -------    -------
     Net cash provided by/(used in) financing activities          3,009        (55)
                                                                -------    -------
Net (decrease) increase in cash and cash equivalents               (633)       813
Cash and cash equivalents at beginning of period                  4,059      3,974
                                                                -------    -------
Cash and cash equivalents at end of period                       $3,426     $4,787
                                                                =======    =======
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       7
<PAGE>

                               NUTRITION 21, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

Note 1 BASIS OF PRESENTATION

      The accompanying  unaudited condensed  consolidated  financial  statements
      have been  prepared in accordance  with  accounting  principles  generally
      accepted in the United States for interim  financial  information and with
      the   instructions  to  Form  10-Q  and  Article  10  of  Regulation  S-X.
      Accordingly,  they do not include  all of the  information  and  footnotes
      required by accounting  principles generally accepted in the United States
      for  complete  financial  statements.  In the opinion of  management,  all
      adjustments   (consisting  of  normal  recurring  adjustments)  considered
      necessary for a fair  presentation  have been included.  Operating results
      for the  three  and  nine  month  periods  ended  March  31,  2004 are not
      necessarily  indicative  of the results  that may be expected for the year
      ending  June 30,  2004.  Beginning  in fiscal  year  2004,  the  Company's
      reporting segments were combined into one- Nutritional Products.

      The  balance  sheet at June 30,  2003 has been  derived  from the  audited
      financial  statements  at that  date,  but  does  not  include  all of the
      information  and  footnotes  required  by  generally  accepted  accounting
      principles for complete financial statements.

      For further  information,  refer to the consolidated  financial statements
      and  footnotes  thereto  included in the  Company's  Annual Report on Form
      10-K/A for the year ended June 30, 2003.


Note 2 SHORT-TERM INVESTMENTS

      Short-term  investments  consist of securities  acquired  with  maturities
      exceeding  three  months  but less  than  three  years.  The  Company,  in
      compliance with SFAS No. 115,  "Accounting for Certain Investments in Debt
      and Equity  Securities,"  has  classified  all debt  securities  that have
      readily  determinable  fair values as  available-for-sale,  as the sale of
      such  securities  may be required prior to maturity.  Such  securities are
      reported  at fair  value.  The  cost of  securities  sold is  based on the
      specific identification method.

      Available-for-sale securities consist of ($ in thousands):

                                                       March 31, 2004
                                                       --------------
                                                           Gross       Estimated
                                            Amortized    Unrealized      Fair
                                               Cost      Gain (loss)     Value
                                            ---------    ----------    ---------

      U.S. government and agency securities   $1,000          --          $1,000

Note 3 STOCK-BASED COMPENSATION

      The Company  accounts  for  employee  stock-based  compensation  using the
      intrinsic value method  prescribed in Accounting  Principles Board Opinion
      No. 25, "Accounting for Stock Issued to Employees".  Compensation cost for
      stock  options,  if any, is  measured  as the excess of the quoted  market
      price of the  Company's  stock at the date of  grant  over the  amount  an
      employee must pay to acquire the stock.

      Statement of Financial  Accounting Standards ("SFAS") No. 123, "Accounting
      for  Stock-Based  Compensation,"  established  accounting  and  disclosure
      requirements  using a  fair-value  method of  accounting  for  stock-based
      employee  compensation  plans.  The  Company  has elected to remain on its
      current  method of  accounting  as  described  above,  and has adopted the
      disclosure requirements of SFAS No. 123.

      The Company applies the intrinsic value method pursuant to APB Opinion No.
      25 in accounting for its plans and, accordingly,  no compensation cost has
      been recognized in the condensed consolidated financial statements for its
      employee  stock  options,  which have an exercise  price equal to the fair
      value of the stock on the date of the grant.  Had the  Company  determined
      compensation  cost based on the fair value at the grant date for its stock
      options under SFAS No. 123, the Company's net loss and net loss per common
      share would have been increased to the pro forma amounts  indicated  below
      ($ in thousands, except per share amounts):


                                       8
<PAGE>

                                      Three months ended    Nine months ended
                                            March 31,            March 31,
                                        2004       2003       2004       2003
                                      -------    -------    -------    -------

      Net (loss) as reported          $(1,020)   $(1,143)   $(3,281)   $(3,525)
      Deduct:  Total stock-based
      employee compensation expense
      determined under fair value
      based method for all awards,
      net of related tax effects          (25)       (25)       (95)       (83)
                                      -------    -------    -------    -------

      Pro forma net (loss)            $(1,045)   $(1,168)   $(3,376)   $(3,608)
                                      =======    =======    =======    =======

      (Loss) per common share:
         Basic and diluted -
           as reported                 $(0.03)    $(0.03)    $(0.09)    $(0.11)
         Basic and diluted -
           pro forma                   $(0.03)    $(0.03)    $(0.09)    $(0.11)

Note 4 INVENTORIES

      Inventories  at March 31,  2004 and June 30,  2003  consisted  of finished
      goods.

Note 5 ACCOUNTS PAYABLE AND ACCRUED EXPENSES

      On December 23,  2003,  the Company  received  $0.3 million for granting a
      three-year   renewable  license  to  market  certain  dietary  supplements
      previously  marketed by the Company  under the Lite Bites  trademarks.  In
      addition,  the  Company  granted  an option  to  purchase  the Lite  Bites
      trademark.  License  fee  income  will  be  recognized  over  the  initial
      three-year license period.

Note 6 CONVERTIBLE PREFERRED STOCK

      During the nine month  period  ended March 31,  2004,  the  remaining  188
      shares of the  Company's  Series G  Preferred  Stock were  converted  into
      316,498 shares of the Company's common stock.

Note 7 STOCKHOLDERS' EQUITY

      On October 9, 2003, the Company completed a private placement of 4,062,500
      shares of the Company's common stock for aggregate gross proceeds of $3.25
      million.  The net proceeds of approximately  $3.0 million from the sale of
      these securities are intended for general  corporate  purposes,  including
      the  continued  clinical  and  market  development  of  Diachrome(TM),   a
      nutritional  therapy product for people with diabetes.  In connection with
      the private  placement,  C. E.  Unterberg,  Towbin,  in accordance  with a
      Financial  Advisory and Investment Banking Services Agreement entered into
      on October 8, 2003,  was granted a warrant to purchase  121,950  shares of
      the Company's common stock at an exercise price of $1.05 per share.


                                       9
<PAGE>

                               NUTRITION 21, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

Note 8 (LOSS) PER SHARE

      The following table sets forth the computation of basic and diluted (loss)
      per common share for the periods  indicated ($ in thousands,  except share
      data):

<TABLE>
<CAPTION>
                                                Three months ended               Nine months ended
                                                     March 31,                       March 31,
                                               2004            2003            2004             2003
                                           ------------    ------------    ------------    ------------

      Basic and diluted (loss) per common
      share:
<S>                                           <C>            <C>              <C>             <C>
      Net (loss)                                $(1,020)        $(1,143)        $(3,281)        $(3,525)

         Less: Dividends on
         preferred shares                            --              (2)             --             (13)
                                           ------------    ------------    ------------    ------------
      (Loss) applicable to common
      stockholders                              $(1,020)        $(1,145)        $(3,281)        $(3,538)
                                           ============    ============    ============    ============
      Weighted average shares:               37,991,988      33,602,990      36,362,739      33,211,855
      Basic and diluted (loss) per share         $(0.03)         $(0.03)         $(0.09)         $(0.11)
                                           ============    ============    ============    ============
</TABLE>

      Diluted  (loss) per share for the three and nine month periods ended March
      31,  2004 and 2003,  does not  reflect  the  incremental  shares  from the
      assumed  conversion  of  stock  options,   warrants  and  preferred  stock
      (1,868,166 and 303,471 and 1,912,168 and 782,253 shares,  respectively) as
      the effect of such inclusion would be antidilutive.

Note 9 RESEARCH AND DEVELOPMENT AGREEMENTS

      The Company's  therapeutic strategy for fiscal year 2004 includes a larger
      commitment, relative to the prior year's comparable period, to spending on
      research  and  development  targeted  at  validating  earlier  findings of
      efficacy focused on disease  specific  conditions in the areas of diabetes
      and depression.  The Company entered into an agreement with  Comprehensive
      NeuroSciences, Inc., a contract research organization in the neurosciences
      field,  to  perform  studies  related  to  the  Company's  anti-depressant
      technology.  The Company expects that the first phase of the study will be
      completed  during fiscal year 2004. In addition,  the Company entered into
      an agreement with XLHealth (formerly Diabetex, Inc.), a disease management
      company, and is funding a large-scale trial in managed patient populations
      to evaluate  Diachrome's effect as a nutritional  adjunct to standard care
      for people with  diabetes.  The XLHealth  clinical trial is expected to be
      completed by the end of calendar year 2004. The Company  expects to launch
      these  products  under the Dietary  Supplement  Health and  Education  Act
      (DSHEA) regulatory  pathway,  which is less costly and less time consuming
      than that required for drug  development.  These  large-scale  studies are
      being  conducted to secure  medical  acceptance  and adoption as treatment
      protocols.  The  Company's  spending  in these  areas  of new  technology,
      however,  is  discretionary  and is subject to the  availability of funds.
      There can be no assurances  that the Company's  disease  specific  product
      development  efforts will be  successfully  completed or that the products
      will be successfully manufactured or marketed.


                                       10
<PAGE>


                               NUTRITION 21, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


Note 10 SUPPLEMENTAL CASH FLOW INFORMATION

                                                              Nine months ended
                                                                  March 31,
                                                                2004    2003
                                                              ------   -----
      Supplemental disclosure of cash flow information
      ($ in thousands):
          Cash paid for interest                                 $--    $17
          Cash paid for income taxes                             $--    $41

      Supplemental schedule of non-cash investing activities:
          Obligation for N21 acquisition
           contingent payments                                   $44    $29
          Issuance of common stock for Series G
           conversion                                           $188   $283

Note 11 CONTINGENCIES

      A former executive of the Company has submitted an employment  dispute for
      arbitration.

      The Federal  Trade  Commission  ("FTC")  and the  Company  are  discussing
      whether the Company should have any liability for weight loss  advertising
      claims that were made on QVC, Inc.  ("QVC") for the  Company's  Lite Bites
      products. The FTC has sued QVC for these claims and for claims made on QVC
      for other  products,  and QVC has, in the same lawsuit,  filed a Complaint
      for damages  against six parties,  including  the Company.  The Company is
      evaluating the Complaint filed by QVC.


                                       11
<PAGE>


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

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

      FORWARD-LOOKING STATEMENTS AND RISK FACTORS

      This quarterly report and the documents  incorporated by reference contain
      forward-looking  statements  which are  intended  to fall within the "safe
      harbor"  provisions  of the Private  Securities  Litigation  Reform Act of
      1995.  Words  such  as  "anticipates",   "expects",   "intends",  "plans",
      "believes",  "seeks",  and  "estimates" and similar  expressions  identify
      forward-looking   statements.   Statements   that   are   "forward-looking
      statements" are based on current  expectations  and  assumptions  that are
      subject to risks and  uncertainties.  Actual performance and results could
      differ  materially  because of factors such as those set forth under "Risk
      Factors" in Form S-3/A filed with the Securities  and Exchange  Commission
      on January 27, 2004.

      GENERAL

      The Company's  revenues are primarily derived from the sale of proprietary
      ingredients and the grant of patent licenses related to those  ingredients
      to  manufacturers  of vitamin  and mineral  supplements.  The fees for the
      licenses are bundled on an undifferentiated  basis with the price that the
      Company charges for its ingredients.

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

      RESULTS OF OPERATIONS

      Revenues

      Net sales for the three and nine month  periods  ended  March 31,  2004 of
      $2.6 million and $7.2  million  decreased  $0.5 million and $1.4  million,
      respectively,  when compared to $3.1 million and $8.6 million for the same
      periods a year ago.  Net sales  declined  $0.7  million and $1.3  million,
      respectively,  stemming from the  Company's  decision to  discontinue  its
      investment  in the Lite Bites  product  line in fiscal year 2003.  For the
      three months ended March 31, 2004, sales of nutritional  products improved
      $0.2  million,  when  compared to the same period a year ago. For the nine
      month period ended March 31, 2004,  net sales from the Lite Bites  product
      line  declined $1.2  million,  due primarily to the Company's  decision to
      discontinue  its  investment in the Lite Bites product line in fiscal year
      2003.

      Other  revenues were $71 thousand and $171 thousand for the three and nine
      month  periods  ended March 31,  2004,  compared to $50  thousand and $175
      thousand for the same periods a year ago.

      Cost of goods sold

      Cost of goods sold for the three and  nine-month  period  ended  March 31,
      2004 was $0.5  million and $1.6  million,  respectively,  compared to $1.0
      million and $2.8 million,  respectively,  for the same periods a year ago.
      Cost of goods  sold for the three and nine month  periods  of fiscal  year
      2003 was higher due to the cost of goods  associated with the sale of Lite
      Bites  products  versus  the  cost of  goods  associated  with the sale of
      ingredients,  as well as costs associated with the phasing out of the Lite
      Bites  product  line  after the  Company's  decision  to  discontinue  its
      investment  in the Lite Bites  product  line in fiscal  year  2003.  Gross
      margin on  product  sales of 82.5% and 77.9% for the three and nine  month
      periods ended March 31, 2004  increased 15.6 and 10.6  percentage  points,
      respectively,  when compared to the same periods a year earlier,  as gross
      margins on  nutritional  products  sales are greater than gross margins on
      Lite Bites products.

      Research and development expenses

      Research and  development  expenses were $0.7 million and $1.7 million for
      the three and nine month  periods  ended March 31,  2004  compared to $1.2
      million  and $2.0  million  for the same  periods a year ago.  Significant
      start-up  costs for research of new chromium  applications  in fiscal year
      2003 did not recur in the three month period ended March 31, 2004.


                                       12
<PAGE>

      Selling, general and administrative expenses (SG&A)

      SG&A  expenses for the three and nine month  periods  ended March 31, 2004
      were $2.0 million and $5.8 million, respectively, compared to $1.8 million
      and $5.8  million,  respectively,  for the same  periods a year  ago.  The
      primary  reasons  for the  increase of $0.2  million  for the  three-month
      period ended March 31, 2004 were  increases in personnel  related costs as
      well as legal fees.

      Depreciation and amortization

      Depreciation  and  amortization for the three and nine month periods ended
      March 31, 2004 was $0.5 million and $1.6 million,  respectively,  compared
      to $0.6 and $2.0 million,  respectively,  for the same periods a year ago.
      Amortization  declined,  due  primarily  to the  effects of an  impairment
      charge of $4.4 million incurred in fiscal year 2003.

      Operating Loss

      Operating  loss for the three and nine month  periods ended March 31, 2004
      was $1.0 million and $3.3 million, respectively,  compared to an operating
      loss of $1.5 million and $3.9 million,  respectively, for the same periods
      a year  ago.  The  primary  reasons  for the  lower  operating  loss  were
      reductions  of $0.5 million and $0.3 million,  respectively,  for research
      and   development   expenses,   combined  with  lower   depreciation   and
      amortization expense of $0.1 million and $0.4 million,  respectively,  due
      to the effects of an impairment  charge of $4.4 million incurred in fiscal
      year 2003.

      Interest income and interest expense

      Interest  income,  net of  interest  expense  for the three and nine month
      periods   ended  March  31,  2004  was  $14  thousand  and  $18  thousand,
      respectively,  compared to interest income,  net of interest expense of $8
      thousand and $27 thousand,  respectively, for the same periods a year ago.
      Levels of cash  available for  investment in fiscal year 2004 were greater
      than the comparable periods in fiscal year 2003.

      Liquidity and Capital Resources

      Cash, cash  equivalents and short-term  investments at March 31, 2004 were
      $4.4 million  compared to $4.1  million at June 30, 2003.  As of March 31,
      2004,  the Company had working  capital of $5.2  million  compared to $4.1
      million as of June 30,  2003.  Net proceeds of $3.0 million from a private
      placement, of which $1.0 million remains invested in marketable short-term
      debt instruments, was the primary reason for the improvement.

      During the nine months  ended March 31,  2004,  net cash used in operating
      activities  was $2.3 million,  compared to net cash provided by operations
      of $0.3 million for the comparable  period a year ago. The primary reasons
      for the change were a decline in cash  collections  of accounts  and other
      receivables of $2.0 million,  an increase in payments to trade vendors for
      inventory and operating expenses of $0.3 million,  and the receipt of $0.3
      million for granting a three-year renewable license.

      During  the nine  month  period  ended  March 31,  2004,  net cash used in
      investing  activities  was $1.3 million  compared to net cash  provided by
      investing activities of $0.6 million for the comparable period a year ago.
      The purchase of investments,  net of redemptions, of $1.0 million from the
      net  proceeds of a private  placement  in  marketable  securities  was the
      primary reason for the change.

      During the nine month period ended March 31,  2004,  net cash  provided by
      financing  activities  was $3.0  million,  compared  to net  cash  used in
      financing activities of $55 thousand for the comparable period a year ago.
      Proceeds of $3.0 million from a private  placement was the primary  reason
      for the change.

      For the nine month  period  ended March 31, 2004,  the  Company's  primary
      source of cash was proceeds from a private placement. The Company believes
      that cash on hand will  provide  sufficient  liquidity  in the short term.
      Long term liquidity is dependent upon achieving  future  profitability  or
      raising additional financing.

      Future  increases in marketing and research and development  expenses over
      the present levels may require  additional  funds.  The Company intends to
      seek any necessary  additional funding through arrangements with corporate
      collaborators through public or private sales of its securities, including
      equity securities, or through bank financing.


                                       13
<PAGE>

      Significant Accounting Pronouncements

      The Company has considered all recent  accounting  pronouncements  and has
      determined  that  the  pronouncements  have  no  material  effect  on  the
      Company's results of operations and financial condition.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Market  risk  represents  the risk of  changes  in  value  of a  financial
      instrument,  derivative  or  non-derivative,  caused  by  fluctuations  in
      interest rates,  foreign exchange rates and equity prices. The Company has
      no financial  instruments  that give it exposure to foreign exchange rates
      or equity prices.  Although the Company has temporarily invested a portion
      of the proceeds of its private  placement in  interest-bearing  marketable
      debt securities,  these instruments have relatively short-terms maturities
      and risk  related to  interest  rate  fluctuations  is not  expected to be
      significant.

ITEM 4 - CONTROLS AND PROCEDURES

      The Company's  management,  with the  participation of the Company's Chief
      Executive  Officer  and  Chief  Financial   Officer,   has  evaluated  the
      effectiveness  of the Company's  disclosure  controls and procedures as of
      March 31, 2004.  Based on this  evaluation,  the Company's Chief Executive
      Officer  and  Chief  Financial   Officer   concluded  that  the  Company's
      disclosure controls and procedures are effective for gathering,  analyzing
      and disclosing the  information the Company is required to disclose in the
      reports it files under the  Securities  Exchange  Act of 1934,  within the
      time periods specified in the SEC's rules and forms.

      During the quarter  ended March 31, 2004,  there have been no  significant
      changes in our  internal  controls  over  financial  reporting or in other
      factors,  which have significantly  affected,  or are reasonably likely to
      significantly  affect,  our internal  controls  over  financial  reporting
      subsequent to such evaluation.




                                       14
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

      A former executive of the Company has submitted an employment  dispute for
      arbitration.

      In March 2004,  in the U.S.  District  Court for the  Eastern  District of
      Pennsylvania,  the FTC sued  QVC for  advertising  claims  made on QVC for
      various  products,  including  weight loss claims for the  Company's  Lite
      Bites  products.  QVC has,  in the same  lawsuit,  filed a  Complaint  for
      damages against six parties, including the Company.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

      (A) EXHIBITS

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

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

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

      (B) REPORTS ON FORM 8-K

            The Company  filed one Report on Form 8-K during the fiscal  quarter
            ended March 31, 2004.

            1.    Report dated  February 12, 2004,  furnishing a copy of a press
                  release of  financial  results  for the fiscal  quarter  ended
                  December 31, 2003.




                                       15
<PAGE>


                                NUTRITION 21, INC

                                   SIGNATURES


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





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






Date:  May 7, 2004            By:   /s/ Gail Montgomery
                                    -------------------
                                    Gail Montgomery
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)


                                    /s/ Paul Intlekofer
                                    -------------------
                                    Paul Intlekofer
                                    Chief Financial Officer and
                                    Senior Vice President, Corporate
                                    Development
                                    (Principal Financial Officer)




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