UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549
                                  Form 10-K

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

                 For the fiscal year ended December 31, 2001
                        Commission File Number 0-11997

                        Carrington Laboratories, Inc.
         -----------------------------------------------------
         (Exact name of Registrant as specified in its charter)

             Texas                                    75-1435663
     ----------------------                      -------------------
    (State of Incorporation)                    (IRS Employer ID No.)

                  2001 Walnut Hill Lane, Irving, Texas 75038
                  ------------------------------------------
                   (Address of principal executive offices)


 Registrant's telephone number, including area code:  (972) 518-1300

         Securities registered pursuant to Section 12(b) of the Act:

         Title of each class    Name of exchange on which registered
                 None

         Securities registered pursuant to Section 12(g) of the Act:

                        Common Stock ($.01 par value)
                               (Title of class)
                       Preferred Share Purchase Rights
                               (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 12 months (or for such shorter period that  the
 Registrant was required to file such  reports), and (2) has been subject  to
 such filing requirements for the past 90 days.  Yes  [ X ]     No  [   ]

      Indicate by check mark if disclosure  of delinquent filers pursuant  to
 Item 405  of  Regulation  S-K is  not  contained  herein, and  will  not  be
 contained, to the best of the Registrant's knowledge, in definitive proxy or
 information statements incorporated by  reference in Part  III of this  Form
 10-K or any amendment to this Form 10-K.  [   ]

      The aggregate market value of the  Common Stock held by  non-affiliates
 of the Registrant  on March  18, 2002, was  $21,112,810.   (This figure  was
 computed on the  basis of  the closing  price of  such stock  on the  NASDAQ
 National Market on March 18, 2002, using the aggregate number of shares held
 on that date by, or in nominee name for, shareholders who are not  officers,
 directors or record holders of 10%  or more of the Registrant's  outstanding
 voting stock.   The  characterization of  such officers,  directors and  10%
 shareholders as  affiliates is  for purposes  of this  computation only  and
 should not be construed as  an admission for any  other purpose that any  of
 such persons are, in fact, affiliates of the Registrant.)

      Indicate the number of shares outstanding  of each of the  Registrant's
 classes of common stock, as of the latest practicable date:

 9,833,713 shares of Common Stock, par value $.01 per share, were outstanding
                              on March 18, 2002.

                     DOCUMENTS INCORPORATED BY REFERENCE

    Portions of the Registrant's proxy statement for its annual meeting of
  shareholders to be held on May 16, 2002 are incorporated by reference into
               Part III hereof, to the extent indicated herein.

<PAGE>

                                    PART I

 ITEM 1.  BUSINESS.
          --------
                                   General
                                   -------
 Carrington Laboratories, Inc. ("Carrington" or the "Company") is a research-
 based biopharmaceutical, medical device and raw materials and  nutraceutical
 company  engaged  in  the   development,  manufacturing  and  marketing   of
 naturally-derived  complex   carbohydrates   and   other   natural   product
 therapeutics  for  the  treatment  of  major  illnesses,  the  dressing  and
 management of wounds and nutritional supplements.  The Company is  comprised
 of two business segments.   See Note Twelve   to the consolidated  financial
 statements in  this  Annual Report  for  financial information  about  these
 business divisions.   The  Company  sells prescription  and  nonprescription
 human and  veterinary products  through its  Medical Services  Division  and
 consumer and  bulk  raw  material products  through  its  consumer  products
 subsidiary, Caraloe, Inc.  The Company's research and product portfolio  are
 based primarily  on complex  carbohydrates isolated  from the  Aloe vera  L.
 plant.

 The Company was incorporated  in Texas in  1973 as Ava  Cosmetics, Inc.   In
 1986, the Company sold the direct  sales business it was then operating  and
 changed its name to Carrington Laboratories, Inc.


                          Medical Services Division
                          -------------------------

 Carrington's Medical Services Division offers a comprehensive line of  wound
 management products to hospitals, alternate care facilities, cancer  centers
 and the home  health care market.   The Company's  products are designed  to
 provide patients with the highest quality  of care. Carrington products  are
 used in a wide range  of acute and chronic  wounds, for skin conditions  and
 incontinence care.   The primary marketing  emphasis for Carrington's  wound
 and  skin  care  products  is  directed  toward  hospitals,  nursing  homes,
 alternate care facilities,  cancer centers, home  health care providers  and
 managed care organizations.  The wound and skin care product lines are being
 promoted primarily to  physicians and specialty  nurses, e.g.,  enterostomal
 therapists.

 In response to changing market conditions,  the Company decided during  2000
 to redirect the distribution of its Medical Services products from  multiple
 distributors to a  single, sole-source  distributor.   As a  result of  this
 decision, the  Company entered  into an  exclusive Distributor  and  License
 Agreement  effective  December  1,   2000  with  Medline  Industries,   Inc.
 ("Medline").  Medline  is now responsible  for all sales  and marketing  and
 distribution efforts for Carrington's  wound  and  skin  care product lines.
 The Company also has a Supply Agreement with Medline that allows the Company
 to manufacture  specific  products where  the  Company can  meet  or  reduce
 Medline's current purchase price.

 The Company maintains control of  certain national pricing agreements  which
 cover hospitals, alternate  care facilities, home  health care agencies  and
 cancer centers.   These  agreements allow  Medline representatives  to  make
 presentations in member facilities throughout the country.

 The Company has several distribution and  licensing agreements for the  sale
 of its products into  international markets.  The  Company also sells  wound
 care products into international markets  on a non-contract, purchase  order
 basis.   Opportunities in  the growing  Internet market  are also  addressed
 through    the    Company's     websites,    www.carringtonlabs.com.     and
 www.woundcare.com.

 The Company  also markets  Acemannan  Immunostimulant[TM], a  product  fully
 licensed by  the United  States Department  of  Agriculture ("USDA")  as  an
 adjuvant therapy for certain cancers  in dogs and cats.    In addition,  the
 Company markets  several wound  and skin  care  products to  the  veterinary
 market.

 In 1996, the  Company signed  an agreement  with Farnam  Companies, Inc.,  a
 leading veterinary marketing  company, to promote  and sell the  CarraVet[R]
 product line,  including  Acemannan Immunostimulant[TM].    The  CarraVet[R]
 product line currently consists of four products.


                               Consumer Health
                               ---------------

 Caraloe, Inc., a subsidiary of the Company ("Caraloe"), markets or  licenses
 consumer products and  bulk raw materials  utilizing the Company's  patented
 complex carbohydrate  technology into  the consumer  health and  nutritional
 products markets.  Caraloe's  premier product is  Manapol[R] powder, a  bulk
 raw material rich in complex carbohydrates.   Manapol[R] powder is  marketed
 to  manufacturers  of  nutritional  products  who  desire  quality   complex
 carbohydrate ingredients for their finished products.  Caraloe also  markets
 finished products  containing Manapol[R]  powder  into domestic  health  and
 nutritional products  markets  through  health  food  stores  and  over  the
 Internet at  www.AloeVera.com  and  into international  markets  on  a  non-
 contract, purchase order  basis.   In the  fourth quarter  of 2000,  Caraloe
 introduced  a  new   raw  material,  Hydrapol[TM],   for  use  by   cosmetic
 manufacturers.  Caraloe also offers  contract manufacturing services to  the
 nutritional and skin care market.

 In 1997,  Caraloe  signed a  non-exclusive  supply agreement  with  a  major
 customer to supply Manapol[R]  powder.  This  agreement was renewed  through
 July 2002 and contains monthly minimum purchase requirements.  During  1999,
 2000 and 2001, sales of Manapol[R] powder to this customer represented  41%,
 38% and 30%, respectively, of the Company's total consolidated net sales.


                           Research and Development
                           ------------------------
                                   General
                                   -------

 Carrington has developed proprietary processes for obtaining materials  from
 Aloe vera L.   The Company  intends to seek  approval of the  Food and  Drug
 Administration (the "FDA")  and other regulatory  agencies to sell  products
 containing materials obtained from Aloe vera L. in the United States and  in
 foreign countries.  For a more comprehensive listing of the type, indication
 and status  of products  currently under  development  by the  Company,  see
 "Research and  Development  --  Summary" below.    The  regulatory  approval
 process, both  domestically  and  internationally,  can  be  protracted  and
 expensive, and there is no assurance  that the Company will obtain  approval
 to sell its products for any treatment or use (see "Governmental Regulation"
 below).

 The Company expended approximately $5,300,000, $3,602,000 and $2,442,000  on
 research and development in  fiscal 1999, 2000 and  2001, respectively.   Of
 the total expenditures  for 1999,  $2,866,000 reflect  clinical trial  costs
 associated with  the  Phase III  trial  in ulcerative  colitis,  which  also
 accounted for  approximately  $623,000  of the  2000  expenditures.    Basic
 research funding was decreased in 2001 by 18%.

 The Company's Research and Development group moved in August 2001 to its new
 laboratory facilities and began  restructuring to better accomplish  company
 goals to support current business.  See "Item 2 Properties".  The group  was
 divided into two sections  with the basic  research and discovery  personnel
 focusing on drug delivery and neutropenia  while the remainder of  personnel
 were organized to  support business activities  associated with wound  care,
 nutriceuticals and contract manufacturing.

                        Basic and Preclinical Research
                        ------------------------------

 The Company believes that its products' functionality and/or pharmacological
 activity  make  them  potential   candidates  for  further  development   as
 pharmaceutical or therapeutic  agents.  In  2002, the Company's  preclinical
 efforts will  continue  to focus  on  supporting existing  business  through
 developing  proof  of  concept data  for potential  pharmaceutical partners.
 There is no assurance, however, that  the Company will be successful in  its
 efforts.

 The Company  sponsors a  research and  development laboratory  at Texas  A&M
 University in association with the College of Veterinary Medicine to  expand
 preclinical research  in  various  product applications  and  mechanisms  of
 action.  Pursuant  to this arrangement,  the Company has  access to  leading
 authorities in  immunology  and cell  biology,  as well  as  facilities  and
 equipment to engage in  experimentation and analysis  at the basic  research
 level.

 In 1998, a new  and unique complex carbohydrate  (CR1013) was isolated  from
 Aloe vera  L.    Basic proof  of  concept  research is  continuing  on  this
 material, which includes both pharmacology and toxicology studies.  Selected
 studies have  been completed  through sponsored  research at  Texas A&M  and
 Southern Research Institute.  Pilot  scale production has been  accomplished
 and studies to refine  the process are ongoing.   The technology has  varied
 utility, but the primary focus of research is in the area of drug  delivery.
 Three  patents covering this invention have been issued to the Company  with
 two patents pending.  The composition and process patent was issued in 1999.
 The Company formed DelSite Biotechnologies, Inc., a wholly owned subsidiary,
 in October 2001 as a vehicle to further the development of CR1013.

 Basic  research  studies  also  continued  at  the  University  of  Nebraska
 evaluating the ability of one of the Company's research products to  reverse
 the neutropenia effects of radiation treatment.  Proof of concept studies to
 better understand  the mechanism  of action  and product  dose effects  were
 completed in 2001.  Further development opportunities are being explored and
 evaluated.

                            Human Clinical Studies
                            ----------------------

 Evaluation of  Carrington[R]  Oral  Wound Rinse  for  Pain  Associated  with
 Mucositis.

 In  March 1997,  the  FDA cleared Carrington to  market an Oral Wound  Rinse
 for the management  and relief  of pain  associated with  mucositis and  all
 types of oral  wounds.   A 20 patient  trial of  a new  formulation for  the
 product was completed in 2001.   This trial evaluated the effectiveness  and
 duration of effect of Carrington[R] Oral  Wound Rinse.  All patients in  the
 trial reported that they experienced pain relief immediately upon use of the
 product and 80% reported the duration of relief was 4-6 hours.

 Evaluation of the SaliCept[TM] Oral Patch for Reduction in the Incidence  of
 Dry Socket.

 An independent  study  conducted in  2000  that compared  the  incidence  of
 alveolar osteitis ("AO", also known as dry socket) in patients treated  with
 Gelfoam[R] soaked with an antibiotic or SaliCeptTM Patches was conducted  in
 2000.  A retrospective evaluation was performed of 587 records of Gelfoam[R]
 treated patients  compared to a prospective  trial of  608 patients  treated
 with SaliCept[TM] Patches.  The SaliCept[TM] Patch significantly reduced the
 incidence of AO when compared to the antibiotic-soaked Gelfoam[R]. The study
 results were filed with the FDA and the Company was granted clearance by the
 agency in the fourth quarter 2001 to market the patch as a 510(k) device for
 management of AO.

                       Research and Development Summary
                       --------------------------------

 The following  table  outlines the  status  of the  products  and  potential
 indications  of  the   Company's  products  developed,   planned  or   under
 development.  There is no assurance of successful development, completion or
 regulatory approval of any product not yet on the market.


                PRODUCTS AND POTENTIAL INDICATIONS DEVELOPED,
                         PLANNED OR UNDER DEVELOPMENT

 PRODUCT OR                   POTENTIAL
 POTENTIAL INDICATION         MARKET APPLICATIONS                STATUS
 --------------------         -------------------                ------
 Topical
 -------
   Dressings                  Pressure and Vascular Ulcers       Marketed
   Dressings                  Diabetic Ulcers, Surgical Wounds   Marketed
   Cleansers                  Wounds                             Marketed
   Anti-fungal                Cutaneous Fungal Infection         Marketed
   Hydrocolloids              Wounds                             Marketed
   Alginates                  Wounds                             Marketed

 Oral
 ----
   Human
      Pain Reduction          Mucositis                          Marketed

   Dental
     Pain Reduction           Aphthous Ulcers, Oral Wounds       Marketed
     Post Extraction Wounds   Oral Surgery                       Marketed

 Injectable
 ----------
   Human
    Neutropenia               Neutropenia associated             Discovery
                                with cancer

   CR1013                     Drug delivery                      Preclinical
   Veterinary
    Adjunct for cancer        Fibrosarcoma                       Marketed


                              Licensing Strategy
                              ------------------

 The Company  expects that  prescription pharmaceutical  products  containing
 certain defined  drug  substances  will  require  a  substantial  degree  of
 development effort and expense.  Before governmental approval to market  any
 such product is obtained, the Company may license these products for certain
 indications to  other  pharmaceutical  companies in  the  United  States  or
 foreign  countries  and  require  such  licensees  to  undertake  the  steps
 necessary to  obtain  marketing approval  in  a particular  country  or  for
 specific indications.

 Similarly, the Company intends to license  third parties to market  products
 containing defined chemical entities for  certain human indications when  it
 lacks  the  expertise  or  financial  resources  to  market  such   products
 effectively.  If the Company is unable to enter into such agreements, it may
 undertake marketing the products itself for such indications.  The Company's
 ability to  market  these  products for  specific  indications  will  depend
 largely on its financial  condition at the time  and the results of  related
 clinical trials.  There  is no assurance  that the Company  will be able  to
 enter into  any license  agreements  with third  parties  or that,  if  such
 license agreements  are concluded,  they will  contribute to  the  Company's
 overall profits.

                         Raw Materials and Processing
                         ----------------------------

 The principal raw material used by the Company in its operations is the leaf
 of the plant known as Aloe vera L.  Through patented processes, the  Company
 obtains several bulk freeze-dried aloe extracts from the central portion  of
 the Aloe vera  L. leaf known  as the gel.   A basic  bulk mannan,  Acemannan
 Hydrogel[TM],  is  used  as  an  ingredient  in  certain  of  the  Company's
 proprietary wound and skin care products.

 The Company owns  a 405-acre farm  in the Guanacaste  province of  northwest
 Costa Rica which  currently has approximately  113 acres  planted with  Aloe
 vera L.  The Company is  currently performing a land reclamation project  on
 the farm to increase productive acreage.  Currently, the Company's need  for
 leaves exceeds the  supply of harvestable  leaves from  the Company's  farm,
 requiring the purchase of leaves from other sources in Costa Rica at  prices
 comparable to the  cost of acquiring  leaves from the  Company's farm.   The
 Company has entered into several supply agreements with local suppliers near
 the Company's factory.   The Company  anticipates that  the local  suppliers
 will be able to meet all of its requirements for leaves in 2002.

 The Company has a  24% ownership interest in  Aloe and Herbs  International,
 Inc., ("Aloe & Herbs"), a Panamanian  corporation formed for the purpose  of
 establishing an Aloe vera  L. farm in Costa  Rica.  The  Company has a  leaf
 supply agreement with Rancho Aloe, S.A., a wholly owned subsidiary of Aloe &
 Herbs, which has a 5,000 acre farm in close proximity to the Company's farm.
 The agreement  calls for  a nominal price per  kilogram of leaves  supplied,
 with the final  price payable to  Rancho Aloe based  upon the  yield of  the
 final product.

 In September 1999, the Company leased approximately 17.6 acres of land  from
 Rancho Aloe for one year with  provisions for automatic renewal in  one-year
 increments unless terminated by the Company or Rancho Aloe, and planted  its
 own Aloe vera L.  plants on the leased  plot due to  the lack of  additional
 productive land on  its own farm.   The lease  was automatically renewed  in
 2001 for an additional year.   The Company also pays  a monthly fee for  the
 maintenance of the plot.

 As of December 31, 2001, Rancho Aloe was providing an average of 74% of  the
 Company's monthly requirement of leaves.   See "Management's Discussion  and
 Analysis of Financial Condition and Results  of Operations -- Liquidity  and
 Capital  Resources"  for   further  information   regarding  the   Company's
 relationship with Aloe & Herbs.

                                Manufacturing
                                -------------

 Since 1995, the Company's wound and skin care product manufacturing facility
 has been  located in  the  Company's headquarters  in  Irving, Texas.    The
 Company believes that this manufacturing facility has sufficient capacity to
 provide for the present line of products and to accommodate new products and
 sales growth.   Final  packaging  of certain  of  the Company's  wound  care
 products is completed by outside vendors.  The Company's calcium  alginates,
 films, hydrocolloids,  foam dressings,  gel sheets,  tablets, capsules,  and
 freeze-dried products are being provided by third parties.

 All of the Company's bulk pharmaceutical products and freeze-dried Aloe vera
 L. extracts  are produced  in its  processing  plant in  Costa Rica.    This
 facility has the ability to supply the bulk aloe raw materials  requirements
 of the Company's current product lines  and bulk material contracts for  the
 foreseeable future.

                                 Competition
                                 -----------

 Research and  Development.    The biopharmaceutical  field  is  expected  to
 continue to undergo rapid and  significant technological change.   Potential
 competitors in the  United States are  numerous and include  pharmaceutical,
 chemical  and  biotechnology  companies.    Many  of  these  companies  have
 substantially greater capital  resources, research  and development  staffs,
 facilities and  expertise  (in  areas including  research  and  development,
 manufacturing, testing, obtaining regulatory  approvals and marketing)  than
 the Company.   This competition can  be expected to  become more intense  as
 commercial  applications  for  biotechnology  and  pharmaceutical   products
 increase.  Some of these  companies may be better  able than the Company  to
 develop, refine, manufacture and market  products which have application  to
 the same indications as the Company  is exploring.  The Company  understands
 that certain of  these competitors are  in the process  of conducting  human
 clinical trials of, or have filed applications with government agencies  for
 approval to market  certain products that  will compete  with the  Company's
 products, both in its  present wound care market  and in markets  associated
 with products the Company currently has under development.

 Medical Services Division and  Caraloe, Inc.   The Company competes  against
 many companies that sell products which  are competitive with the  Company's
 products, with  many  of its  competitors  using very  aggressive  marketing
 efforts.  Many of  the Company's competitors  are substantially larger  than
 the  Company  in  terms  of  sales   and  distribution  networks  and   have
 substantially greater financial and other resources.  The Company's  ability
 to compete against these companies will  depend in part on the expansion  of
 the marketing  network for  its products.   The  Company believes  that  the
 principal competitive factors  in the marketing  of its  products are  their
 quality, and that they are naturally based and competitively priced.

                           Governmental Regulation
                           -----------------------

 The production and marketing  of the Company's  products, and the  Company's
 research and development activities, are  subject to regulation for  safety,
 efficacy and  quality by  numerous governmental  authorities in  the  United
 States and other countries.   In the United  States, drug devices for  human
 use are subject  to rigorous  FDA regulation.   The Federal  Food, Drug  and
 Cosmetic Act,  as  amended (the  "FFDC  Act"), the  regulations  promulgated
 thereunder, and other  federal and  state statutes  and regulations  govern,
 among  other  things,  the  testing,  manufacture,  safety,   effectiveness,
 labeling, storage, record  keeping, approval, advertising  and promotion  of
 the Company's  products.   For  marketing  outside the  United  States,  the
 Company is  subject  to  foreign  regulatory  requirements  governing  human
 clinical  trials  and  marketing  approval  for  drugs  and  devices.    The
 requirements governing the  conduct of clinical  trials, product  licensing,
 pricing and reimbursement may vary widely from country to country.

 Food and Drug  Administration.  The  contents, labeling  and advertising  of
 many of the Company's  products are regulated  by the FDA.   The Company  is
 required to obtain FDA approval before  it can study or market any  proposed
 prescription drugs and may be required to obtain such approval for  proposed
 nonprescription  products.    This  procedure  involves  extensive  clinical
 research, and  separate FDA  approvals are  required  at various  stages  of
 product development.   The approval  process requires,  among other  things,
 presentation of substantial evidence to the FDA, based on clinical  studies,
 as to the safety and efficacy of the proposed product.

 After approval, manufacturers must continue to expend time, money and effort
 in production and quality  control to assure  continual compliance with  the
 current Good  Manufacturing  Practices regulations.    Also, under  the  new
 program for  harmonization between  Europe and  the U.S.  and the  ISO  9001
 Certification Program,  a company  can,  under certain  circumstances  after
 application,  have  a   new  drug  approved   under  a   process  known   as
 centralization  rather  than  having  to  go  through  a  country-by-country
 approval in the European Union.

 Certain of the Company's  wound and skin care  products are registered  with
 the FDA as "devices" pursuant to the regulations under Section 510(k) of the
 FFDC Act.  A device is a product used for a particular medical purpose, such
 as to cover a wound, with respect  to which no pharmacological claim can  be
 made.   A  device which  is  "substantially equivalent"  to  another  device
 existing in the  market prior to  May 1976 can  be registered  with the  FDA
 under Section 510(k) and marketed without  further testing.  A device  which
 is not  "substantially equivalent"  is subject  to an  FDA approval  process
 similar to that required for a  new drug, beginning with an  Investigational
 Device Exemption and culminating in a  Premarket Approval.  The Company  has
 sought and obtained  all its  device approvals  under Section  510(k).   The
 Company currently markets seven (7) products which require a prescription as
 medical devices.

 Other Regulatory Authorities.  The Company's advertising and sales practices
 are subject to regulation by the  Federal Trade Commission (the "FTC"),  the
 FDA and state agencies.  The  Company's processing and manufacturing  plants
 are subject to  federal, state  and foreign laws  and to  regulation by  the
 Bureau of Alcohol, Tobacco  and Firearms of the  Department of the  Treasury
 and by the Environmental Protection Agency  (the "EPA"), as well as the  FDA
 and USDA.

 The  Company  believes  that  it  is  in  substantial  compliance  with  all
 applicable laws and regulations relating to its operations, but there is  no
 assurance that such  laws and  regulations will not  be changed.   Any  such
 change may have a material adverse effect on the Company's operations.

 The  manufacturing,   processing,  formulating,   packaging,  labeling   and
 advertising of  products  of the  Company's  subsidiary, Caraloe,  are  also
 subject to regulation by  one or more federal  agencies, including the  FDA,
 the FTC, the  USDA and  the EPA.   These  activities are  also regulated  by
 various agencies of the  states, localities and  foreign countries to  which
 Caraloe's products are distributed and in which Caraloe's products are sold.
 The  FDA, in particular, regulates the formulation, manufacture and labeling
 of vitamin and other nutritional supplements.

 The Dietary Supplement Health  and Education Act  of 1994 ("DSHEA")  revised
 the provisions of the  FFDC Act concerning the  composition and labeling  of
 dietary supplements and, in the judgment of the Company, is favorable to the
 dietary supplement industry.  The legislation created a new statutory  class
 of "dietary  supplement" which  includes  vitamins, minerals,  herbs,  amino
 acids and other dietary  substances for human use  to supplement the diet.
 DSHEA grandfathered, with  certain limitations, dietary  ingredients on  the
 market before October 15, 1994.   A dietary supplement which contains a  new
 dietary ingredient, one not on the market before October 15, 1994,  requires
 evidence of a history of use  or other evidence of safety establishing  that
 it will reasonably be  expected to be  safe.  The  majority of the  products
 marketed by Caraloe are classified as dietary supplements under DSHEA.

 Both foods and dietary supplements are subject to the Nutrition Labeling and
 Education Act of 1990  (the "NLEA"), which prohibits  the use of any  health
 claim for foods, including dietary supplements,  unless the health claim  is
 supported by significant scientific agreement and is either pre-approved  by
 the FDA or the subject of substantial government scientific publications and
 a notification to the FDA.   To date, the FDA has  approved the use of  only
 limited health claims for dietary supplements.  However, among other things,
 DSHEA  amended,  for  dietary  supplements,  the  NLEA  by  providing   that
 "statements of  nutritional support"  may be  used in  labeling for  dietary
 supplements without  FDA  preapproval  if  certain  requirements,  including
 prominent disclosure on the label of the lack of FDA review of the  relevant
 statement, possession by  the marketer  of substantiating  evidence for  the
 statement and post-use notification  to the FDA, are  met.  Such  statements
 may describe how  particular nutritional supplements  affect the  structure,
 function or general well-being of  the body (e.g., "promotes  cardiovascular
 health").

 Advertising and label claims for dietary supplements and conventional  foods
 have been  regulated by  state and  federal authorities  under a  number  of
 disparate regulatory schemes.  There can  be no assurance that a state  will
 not interpret claims presumptively valid under federal law as illegal  under
 that state's regulations, or  that future FDA  regulations or FTC  decisions
 will not restrict the permissible scope of such claims.

 Governmental  regulations  in  foreign  countries  where  Caraloe  plans  to
 commence or  expand sales  may prevent  or delay  entry into  the market  or
 prevent or delay the introduction, or require the reformulation, of  certain
 of  Caraloe's  products.   Compliance   with   such   foreign   governmental
 regulations is generally  the responsibility of  Caraloe's distributors  for
 those countries.  These distributors are independent contractors over  which
 Caraloe has limited control.

 As a result  of Caraloe's  efforts to  comply with  applicable statutes  and
 regulations, Caraloe  has  from time  to  time reformulated,  eliminated  or
 relabeled certain  of its  products and  revised certain  provisions of  its
 sales and  marketing program.   Caraloe  cannot predict  the nature  of  any
 future laws,  regulations,  interpretations  or  applications,  nor  can  it
 determine what effect additional governmental regulations or  administrative
 orders, when and if promulgated, would  have  on its business in the future.
 They could, however, require the reformulation  of certain products to  meet
 new standards, the recall or discontinuance of certain products not  capable
 of reformulation, additional record  keeping, expanded documentation of  the
 properties of  certain  products,  expanded or  different  labeling,  and/or
 scientific substantiation.   Any or all  of such requirements  could have  a
 material adverse effect on the Company's results of operations and financial
 condition.

 Compliance with the  provisions of national,  state and local  environmental
 laws and regulations has not had a material adverse effect upon the  capital
 expenditures,  earnings,  financial   position,  liquidity  or   competitive
 position of the Company.

                        Patents and Proprietary Rights
                        ------------------------------

 As is  industry  practice,  the  Company has  a  policy  of  using  patents,
 trademarks and trade  secrets to  protect the  results of  its research  and
 development activities and, to the extent it may be necessary or  advisable,
 to exclude others  from appropriating  the Company's proprietary technology.
 The Company's policy is to  protect aggressively its proprietary  technology
 by seeking and enforcing patents in a worldwide program.

 The Company has obtained patents or filed patent applications in the  United
 States and approximately 26  other countries in  three series regarding  the
 compositions of acetylated mannan derivatives,  the processes by which  they
 are produced and  the methods  of their  use.   The first  series of  patent
 applications, relating to the compositions of acetylated mannan  derivatives
 and certain basic  processes of their  production, was filed  in a chain  of
 United States  patent applications  and its  counterparts  in the  other  26
 countries.  The first United States patent application in this first series,
 covering the composition  claims of acetylated  mannan derivatives,  matured
 into United States Patent No. 4,735,935 (the "935 Patent"), which was issued
 on April 5, 1988.  United States Patent No. 4,917,890 (the "890 Patent") was
 issued  on April 17, 1990 from a divisional application  to  the 935 Patent.
 This divisional application pertains to most of the remaining claims in  the
 original application  not  covered  by  the 935  Patent.    The  890  Patent
 generally relates  to the  basic processes  of producing  acetylated  mannan
 derivatives, to certain specific examples of  such processes and to  certain
 formulations  of  acetylated  mannan  derivatives.    Two  other  divisional
 applications covering the  remaining claims not  covered by  the 890  Patent
 matured into patents,  the first  on September  25, 1990,  as United  States
 Patent No. 4,959,214, and the second on  October 30, 1990, as United  States
 Patent  No. 4,966,892.    Foreign  patents  that  are  counterparts  to  the
 foregoing United States  patents have  been granted  in some  of the  member
 states of the European Economic Community and several other countries.

 The second series of patent applications related to preferred processes  for
 the production of acetylated mannan derivatives.   One of them matured  into
 United States Patent No. 4,851,224, which was issued on July 25, 1989.  This
 patent is  the  subject  of a  Patent  Cooperation  Treaty  application  and
 national foreign applications  in several countries.   An additional  United
 States patent based on the second  series was issued on September 18,  1990,
 as United States Patent No. 4,957,907.

 The third series of patent applications, relating to the uses of  acetylated
 mannan derivatives, was  filed subsequent to  the second series.   Three  of
 them matured into United States Patent  Nos. 5,106,616, issued on April  21,
 1992, 5,118,673, issued  on June 2, 1992,  and 5,308,838,  issued on  May 3,
 1994.  The Company  has filed a number  of divisional applications to  these
 patents, each dealing with specific uses  of acetylated mannan  derivatives.
 Patent Cooperation Treaty  applications based  on the  parent United  States
 applications have been filed designating a number of foreign countries where
 the applications are pending.  In addition, the Company has also obtained  a
 patent in  the United  States  relating to  a  wound cleanser,  U.S.  Patent
 No. 5,284,833, issued on February 8, 1994.

 The Company  has  obtained a  patent  in the  United  States relating  to  a
 therapeutic device  made  from freeze-dried  complex  carbohydrate  hydrogel
 (U.S. Patent No. 5,409,703, issued on April 25, 1995).  A Patent Cooperation
 Treaty application based on  the parent United  States application has  been
 filed designating a number of foreign  countries where the applications  are
 pending.

 The Company  has obtained  patents in  the United  States (U.S.  Patent  No.
 5,760,102, issued on  June 2,  1998) and  Taiwan (Taiwan  Patent No.  89390,
 issued on August 21,  1997) related to  the uses of  a denture adhesive  and
 also a patent in  the United States relating  to methods for the  prevention
 and treatment of infections in animals (U.S. Patent No. 5,703,060, issued on
 December 30, 1997).

 The  Company  obtained  a   patent  in  the   United  States  (U.S.   Patent
 No.5,902,796, issued on May 11, 1999)  related to the process for  obtaining
 bioactive material from Aloe vera L.

 The Company obtained an additional patent in the United States (U.S.  Patent
 No. 5,929,051,  issued on  July 27,  1999) related  to the  composition  and
 process for a new complex carbohydrate  (pectin)  isolated from Aloe vera L.
 Also obtained was a United States patent (U.S. Patent No. 5,925,357,  issued
 on July 20, 1999) related to the process for a new Aloe vera L. product that
 maintains the complex  carbohydrates with the  addition of other  substances
 normally provided by "Whole Leaf Aloe."

 Additionally, the  Company obtained  a Japanese  letters-patent (Patent  No.
 2888249, having a Patent Registration Date of February 19, 1999) for the use
 of acemannan (a) in  a vaccine product; (b)  in enhancing natural kill  cell
 activity and in enhancing  specific tumor cell lysis  by white cells  and/or
 antibodies; (c)  in correcting  malabsorption  and mucosal  cell  maturation
 syndromes in man or  animals; and (d) in  reducing symptoms associated  with
 multiple sclerosis.

 The Company also received the grant of European Patent Application under No.
 0611304, having the  date of  publication and mention  of the  grant of  the
 patent of September 15, 1999.   This European Letters Patent claims the  use
 of acetylated mannan for the regulation of blood cholesterol levels and  for
 the removal of plaque in blood vessels.   A patent was also issued in  South
 Korea.  Applications are pending in Canada and Japan.

 In addition, the Company obtained an  Australian Patent (Patent No.  718631,
 having an  Accepted Journal  Date of  April  20, 2000)  on Uses  of  Denture
 Adhesive Containing Aloe Extract.   On June 20,  2000 Singapore granted  the
 Company a patent on Bioactive Factors of Aloe Vera Plants (P-No. 51748).

 The Company received  the grant of  two U.S. patents  (Patent No.  6,274,548
 issued August 14, 2001,  and Patent No. 6,313,103  issued November 6,  2001)
 associated with  the  use of  pectins  for purification,  stabilization  and
 delivery of certain  growth factors.   Other U.S. PCT  applications on  Aloe
 Pectin are pending.  A U.S. patent application on growth factor and protease
 enzyme is also pending.

 The Company has filed and intends  to file patent applications with  respect
 to subsequent developments and improvements when it believes such protection
 is in the best interest  of the Company.   Although the scope of  protection
 which ultimately may be afforded by  the patents and patent applications  of
 the Company is difficult to quantify, the Company believes its patents  will
 afford adequate  protection  to  conduct  the  business  operations  of  the
 Company.  However, there can be no assurance that (i) any additional patents
 will be issued to the Company in any or all appropriate jurisdictions,  (ii)
 litigation will not be commenced seeking  to challenge the Company's  patent
 protection or such  challenges will not  be successful,  (iii) processes  or
 products of the  Company do not  or will not  infringe upon  the patents  of
 third parties  or (iv)  the scope  of  patents issued  to the  Company  will
 successfully prevent third parties  from developing similar and  competitive
 products.  It  is not  possible to predict  how any  patent litigation  will
 affect the Company's efforts to develop, manufacture or market its products.

 The Company also relies  upon, and intends to  continue to rely upon,  trade
 secrets,  unpatented  proprietary  know-how  and  continuing   technological
 innovation to develop and  maintain its competitive  position.  The  Company
 typically  enters  into  confidentiality  agreements  with  its   scientific
 consultants, and the  Company's key employees  have entered into  agreements
 with the Company  requiring that they  forbear from disclosing  confidential
 information of  the Company  and assign  to the  Company all  rights in  any
 inventions made  while in  the Company's  employ relating  to the  Company's
 activities.   Accordingly,  the Company  believes  that its  valuable  trade
 secrets and unpatented proprietary know-how are adequately protected.

 The  technology  applicable to the Company's products is developing rapidly.
 A substantial number of patents have been issued to other  biopharmaceutical
 companies.  In addition,  competitors have filed  applications for, or  have
 been issued,  patents  and may  obtain  additional patents  and  proprietary
 rights relating  to products  or processes  competitive  with those  of  the
 Company.  To the Company's knowledge,  acetylated mannan derivatives do  not
 infringe any valid, enforceable United States patents.  A number of  patents
 have been issued to others with respect to various extracts of the Aloe vera
 L. plant and their  uses and formulations, particularly  in respect to  skin
 care and cosmetic  uses.  While  the Company is  not aware  of any  existing
 patents which conflict  with its  current and  planned business  activities,
 there can be  no assurance  that holders of  such other  Aloe vera  L.-based
 patents will not claim that particular  formulations and uses of  acetylated
 mannan derivatives  in  combination  with  other  ingredients  or  compounds
 infringe, in some respect, on these other patents.  In addition, others  may
 have filed patent applications and may have been issued patents relating  to
 products and technologies potentially useful to the Company or necessary  to
 commercialize its products  or achieve their  business goals.   There is  no
 assurance that the Company will be  able to obtain licenses of such  patents
 on acceptable terms.

 The Company has given the trade name Carrasyn[R] to certain of its  products
 containing acetylated mannans.  The Company  has filed a selected series  of
 domestic and foreign trademark applications for the marks Manapol[R] powder,
 Carrisyn[R], Carrasyn[R]  and  CarraGauze[R].    Further,  the  Company  has
 registered the trademark AVMP[R] Powder and the trade name Carrington[R]  in
 the United States.  In 1999, the Company obtained four additional registered
 trademarks in Brazil.   The Company believes that  its trademarks and  trade
 names are valuable assets.

 In June 2000, the Company obtained registration in the United States of  its
 mark AloeCeuticals[R] for its skin care products.

 In  addition,  applications  for  the registration marks ISG[TM],  APEC[TM],
 GELSITE[TM] and ORAPATCH[TM] are pending in the U.S.

                                  Employees
                                  ---------

 As of January 31, 2002,  the Company employed 181  persons, of whom 32  were
 engaged in the  operation and maintenance  of its  Irving, Texas  processing
 plant, 105 were  employed at the  Company's facility in  Costa Rica and  the
 remainder  were  executive,  research,  quality  assurance,   manufacturing,
 administrative, sales,  and clerical  personnel.   Of  the total  number  of
 employees, 75 were located  in Texas, 105  in Costa Rica  and one in  Puerto
 Rico. The Company considers  relations with its employees  to be good.   The
 employees are not represented by a labor union.

                                  Financing
                                  ---------

 In November  1997, the  Company entered  into a  financing arrangement  with
 Comerica  Bank-Texas  ("Comerica").    The  agreement  was  composed  of   a
 $3,000,000 line  of credit  structured as  a demand  note without  a  stated
 maturity date and with an interest rate  equal  to the Comerica  prime rate.
 The line of credit  is collateralized by  the Company's accounts  receivable
 and inventory.    This credit  facility  is  used for  operating  needs,  as
 required.  As of  December 31, 2001,  there was a  $763,000 balance owed  to
 Comerica under the terms of the financing agreement.


 ITEM 2. PROPERTIES.

 The Company  believes  that  all its  farming  property,  manufacturing  and
 laboratory facilities, as described below, and material farm,  manufacturing
 and laboratory equipment are in satisfactory condition and are adequate  for
 the purposes for which they are used,  although the farm is not adequate  to
 supply  all  of  the  Company's  needs  for  Aloe  vera  L.  leaves.    (See
 "Management's Discussion and Analysis of Financial Condition and Results  of
 Operations" for  more information  regarding the  Company's arrangements  to
 purchase Aloe vera L. leaves.)

 Walnut Hill Facility.   The Company's  corporate headquarters and  principal
 U.S. manufacturing facility occupy all of the 35,000 square foot office  and
 manufacturing building (the "Walnut Hill Facility"), which is situated on an
 approximately 6.6 acre  tract of  land located in  the Las  Colinas area  of
 Irving,  Texas.    The  Company  owns  the  land  and  the  building.    The
 manufacturing operations  occupy approximately  19,000  square feet  of  the
 facility, and  administrative  offices occupy  approximately  16,000  square
 feet.

 Warehouse, Distribution and Laboratory Facility.   The Company has leased  a
 51,200 square foot building in close  proximity to the Walnut Hill  facility
 for a  ten-year term  to house  its Research   and  Development  Department,
 Quality  Assurance  and  Quality   Control  Department  and  Warehouse   and
 Distribution Center.  The Company relocated  those functions to this  newly-
 leased facility in the third quarter of 2001.

 Costa Rica Facility.   The Company owns approximately  405 acres of land  in
 the Guanacaste province of  northwest Costa Rica.   This land is being  used
 for the farming of Aloe vera L. plants and for a processing plant to produce
 bulk pharmaceutical and  injectable mannans and  freeze-dried extracts  from
 Aloe vera L. used in the Company's operations.  The processing plant  became
 operational in 1993.


 ITEM 3.LEGAL PROCEEDINGS.

 On September 12, 2000,  Nutraceutical Solutions, Inc.,  a company formed  in
 March 2000 (the "Plaintiff"), filed a lawsuit (in the 28th Judicial District
 Court of Nueces County, Texas) against the Company and one of its  employees
 (the "Defendants")  alleging  numerous  causes of  action  relating  to  the
 Company's manufacturing and marketing of a product known as  B-Complete[TM].
 The  Plaintiff alleges,  among other things,  that the  Defendants began  to
 market B-Complete[TM], which the Plaintiff alleges is identical to a product
 it acquired in May 2000 as  part of its purchase  of assets from a  separate
 company in bankruptcy proceedings and infringes intellectual property rights
 that the Plaintiff acquired as part of the asset purchase.

 The suit was settled during 2001.

 As reported in  the Company's  Form 10-Q  Quarterly Report  for the  quarter
 ended March 31, 2001, on April 3, 2001, Arthur Singer, a former employee  of
 the Company (the "Plaintiff"), filed a lawsuit in the United States District
 Court for the Eastern District of New York, Long Island Division.  The  suit
 alleges multiple  causes  of  action  against  the  Company  and  its  chief
 executive officer (the "Defendants") and seeks to recover damages in  excess
 of $4,000,000,  plus  legal fees  and  expenses.   The  Plaintiff,  who  was
 formerly employed by the  Company as a  sales representative, alleges  among
 other things that the Company failed  to pay the full amount of  commissions
 owed to him; that the Defendants breached an alleged contract of  employment
 with him;  that the  Company deprived  him of  the opportunity  to  exercise
 vested stock  options, prevented  some of  his unvested  stock options  from
 vesting and caused all of his options to expire earlier than they  otherwise
 would have; and that the Defendants misrepresented that the Company intended
 to retain him  as an  employee, fraudulently induced  him to  remain in  its
 employ and breached an implied covenant of fair dealing.

 On May 31, 2001, the Defendants filed a motion seeking to have the complaint
 dismissed or to have the case transferred to Texas.  On August 28, 2001, the
 Defendants' motion to transfer was granted, and the case was transferred  to
 the United States District Court for the Northern District of Texas,  Dallas
 Division, as Case No. 01-CV-1776.  The Company believes that the Plaintiff's
 claims are without merit and intends to defend the lawsuit vigorously.

 On June 22, 2001, a lawsuit was filed by Swiss-American Products, Inc. ("The
 Plaintiff") against G.  Scott Vogel and  the Company in  the 193rd  Judicial
 District Court  of Dallas  County, Texas.   The  suit alleges,  among  other
 things, that Mr.  Vogel, the  Company's former  Vice President,  Operations,
 improperly obtained proprietary information of Swiss-American Products, Inc.
 from a  former  employer  that  manufactured  products  under  contract  for
 Plaintiff, and used that information on behalf of the Company, in breach  of
 certain common law duties and a confidentiality agreement between his former
 employer and Plaintiff.   The suit  further alleges that  Mr. Vogel and  the
 Company  ("Defendants")  conspired  to  unlawfully  disclose,  convert   and
 misappropriate Plaintiff's trade secrets.

 The suit  seeks  temporary  and permanent  injunctive  relief,  including  a
 permanent injunction  prohibiting Defendants  from  disclosing or  using  to
 Plaintiff's disadvantage any confidential proprietary information  belonging
 to Plaintiff which Mr. Vogel allegedly obtained from his former employer, or
 from developing or marketing products based on Plaintiff's formulas or other
 information allegedly taken from Mr. Vogel's former employer.  The suit also
 seeks to recover damages in an unspecified amount from Defendants.

 Defendants have  filed a  motion for  sanctions  against Plaintiff  and  its
 counsel for  filing  an  affidavit  containing  statements  that  Defendants
 believe to  be  false and  misleading  and  for making  claims  and  seeking
 injunctive relief  based  in part  on  those statements.  In  addition,  the
 Company has  filed  a counterclaim  against  Plaintiff, seeking  to  recover
 actual and  exemplary damages  for wrongful  injunction and  also seeking  a
 declaratory judgment confirming  the Company's  right to  manufacture for  a
 third party  a wound  cleanser that  is  similar to  a wound  cleanser  that
 Plaintiff has previously provided to that party.

 Following a  hearing on  July 30,  2001, the  trial court  entered an  order
 setting the  case  for trial  on  July 30,  2002  and granting  a  temporary
 injunction that prohibits  Defendants from (i)  disclosing or  using any  of
 Plaintiff's confidential,  proprietary  or trade  secret  information;  (ii)
 developing or  marketing  a wound  cleanser  product  that is  the  same  or
 substantially the same as  reflected in a  formula that is  at issue in  the
 lawsuit (although  this prohibition  expressly does  not apply  to  products
 actively manufactured and sold by the  Company before January 1, 2001  using
 the exact same formula  then in effect);  and (iii) destroying,  concealing,
 altering, removing or disposing  of any documents,  files, computer data  or
 other things  relating  to Plaintiff  or  Mr. Vogel's  former  employer,  or
 containing or  referring to  trade secrets  or confidential  or  proprietary
 information of Plaintiff or Mr. Vogel's former employer.

 The Company believes that Plaintiff's claims  are without merit and  intends
 to vigorously defend against  those claims and  pursue its counterclaim  and
 motion for sanctions.


 ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

 The Company did not submit any matter  to a vote of security holders  during
 the fourth quarter of the fiscal year covered by this Annual Report.
<PAGE>

                                   PART II


 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

 The Common Stock  of the  Company is traded  on the  NASDAQ National  Market
 under the symbol "CARN."   The following table sets  forth the high and  low
 sales prices  per  share  of  the  Common Stock  for  each  of  the  periods
 indicated.




 Fiscal 2000                            High          Low
 -----------                            ----          ----
 First Quarter                         $9.75         $2.00

 Second Quarter                         3.56          1.72

 Third Quarter                          2.38          1.63

 Fourth Quarter                         1.63          1.00


 Fiscal 2001                            High          Low
 -----------                            ----          ----
 First Quarter                         $1.38         $1.03

 Second Quarter                         1.68          1.00

 Third Quarter                          1.40          0.88

 Fourth Quarter                         1.13          0.84


 At March 18,  2002, there were  983 holders of  record (including  brokerage
 firms) of Common Stock.

 The Company  has  not  paid any  cash  dividends  on the  Common  Stock  and
 presently intends to  retain all earnings  for use in  its operations.   Any
 decision by the Board of Directors of  the Company to pay cash dividends  in
 the future will depend  upon, among other  factors, the Company's  earnings,
 financial condition and capital requirements.

 At a  meeting on  March 22,  2001,  the Board  of Directors  authorized  the
 repurchase of  up  to  1,000,000 shares,  or  approximately  10.3%,  of  the
 Company's outstanding Common Stock, dependent  on market conditions.   Under
 the authorization, purchases of Common Stock may be made on the open  market
 or through privately negotiated transactions at such times and prices as are
 determined jointly by  the Chairman of  the Board and  the President of  the
 Company.  The Board  authorized the repurchase program  based on its  belief
 that the Company's  stock is undervalued  in light of  the Company's  future
 prospects and that it would be in the  best interest of the Company and  its
 shareholders to repurchase some of its outstanding shares.  As of March  18,
 2002, the Company had not repurchased any of its outstanding Common Stock.


 ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA.

 The selected consolidated financial data below should be read in conjunction
 with the consolidated financial statements of the Company and notes  thereto
 and "Item 7. Management's Discussion and Analysis of Financial Condition and
 Results of Operations."  The selected consolidated financial information for
 the five years  ended December 31,  2001, is derived  from the  consolidated
 financial statements  of the  Company, of  which  the Statements  have  been
 audited by Ernst & Young LLP, independent public accountants.

<TABLE>

                                                Years ended December 31,
 (Dollars and numbers of shares in    -----------------------------------------
 thousands except per share amounts)  1997    1998     1999     2000     2001
 ------------------------------------------------------------------------------
 OPERATIONS STATEMENT INFORMATION:
 <S>                                <C>      <C>      <C>      <C>      <C>
 Revenuue:
   Net sales                        $23,559  $23,625  $28,128  $22,833  $15,115
    Royalty income                        -        -        -      270    2,479
                                     ------   ------   ------   ------   ------
 Total revenue                       23,559   23,625   28,128   23,103   17,594
 Costs and expenses:
   Cost of sales                      9,530   10,870   13,640   12,782    9,803
   Selling, general and
     administrative                  10,814   10,254   10,346   10,162    5,016
   Research and development           3,006    2,589    2,434    2,979    2,442
   Research and development,
     Aliminase[TM] clinical trial
       expenses                           -        -    2,866      623        -
   Charges related to ACI and
     Aloe & Herbs                         -    1,750        -        -        -
   Charges related to Oregon
     Freeze Dry, Inc.                     -        -    1,042      223        -
   Interest income, net                 (37)    (233)    (105)     (80)     (32)
   Other income                           -        -      (62)    (110)     (13)
                                     ------   ------   ------   ------   ------
 Income (loss) before income taxes      246   (1,605)  (2,033)  (3,476)     378
     Provision for income taxes          20       10        -        -        -
                                     ------   ------   ------   ------   ------
 Net income (loss)                      226   (1,615)  (2,033)  (3,476)     378
 Dividends and income attributed
   to preferred shareholders            (70)       -        -        -        -
                                     ------   ------   ------   ------   ------
 Net income (loss) available to
   common shareholders              $   156  $(1,615) $(2,033) $(3,476) $   378
                                     ======   ======   ======   ======   ======
 Net income (loss) per common share
   - basic and diluted(1)           $  0.02  $ (0.17) $ (0.22) $ (0.36) $  0.04
                                     ======   ======   ======   ======   ======
 Weighted average shares used in
   per share computations             8,953    9,320    9,376    9,545    9,743


 BALANCE SHEET INFORMATION
   (as of December 31):

  Working capital                   $ 9,484  $ 9,716  $ 7,911  $ 6,275  $ 7,440
  Total assets                       25,796   24,247   23,493   20,702   21,217
  Total shareholders' investment    $22,826  $21,363  $19,504  $16,440  $16,929


 (1)  For a description of  the calculation of basic  and diluted net  income
      (loss) per  share,  see  Note  Eleven  to  the  consolidated  financial
      statements.
</TABLE>


 ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS.

 Background
 ----------
 The Company  is  a  research-based biopharmaceutical,  medical  device,  raw
 materials  and   nutraceutical   company   engaged   in   the   development,
 manufacturing and marketing of  naturally-derived complex carbohydrates  and
 other natural product therapeutics for the treatment of major illnesses, the
 dressing and management of wounds and nutritional supplements.  The  Company
 is comprised of two business segments.  See Note Twelve to the  consolidated
 financial  statements  for  financial   information  about  these   business
 segments.   The Company  sells prescription  and nonprescription  human  and
 veterinary products through its Medical  Services Division and consumer  and
 bulk  raw  material  products  through  its  consumer  products  subsidiary,
 Caraloe, Inc.    The Company's  research  and product  portfolio  are  based
 primarily on complex carbohydrates isolated from the Aloe vera L. plant.

 Liquidity and Capital Resources
 -------------------------------
 At December 31, 2001 and 2000, the Company held cash and cash equivalents of
 $3,454,000 and $3,200,000, respectively, an increase of $254,000.  Net  cash
 provided by operating activities in 2001 was $1,275,000, as compared to cash
 provided by operating activities in 2000 of $217,000.  The Company  received
 $3,375,000 in 2001 under its licensing  agreement with Medline.  See Part  I
 for  discussions  regarding  agreements  with  Medline.    Significant  cash
 outflows during  2001  included  a $1,132,000  investment  in  property  and
 equipment.  Customers with significant  accounts receivable balances at  the
 end of  2001  included Mannatech,  Inc.  ($337,000) and  Medline  Industries
 ($863,000), and of these amounts, $1,150,000 has been collected as of  March
 7, 2002.

 As of December  31, 2001, the  Company had no  material capital  commitments
 other than its  leases and agreements  with suppliers.   In March 1998,  the
 Company, with  four other  investors, formed  Aloe and  Herbs  International
 Inc., a Panamanian corporation, with the  sole intent of acquiring a  5,000-
 acre tract of land in Costa Rica to be used for the production of Aloe  vera
 L. leaves  to  be  sold to the  Company at competitive,  local market rates.
 This would allow the Company to  save approximately 50% on the  per-kilogram
 cost of  leaves as  compared to  the  cost of  importing leaves  from  other
 Central and South American  countries.  Aloe &  Herbs subsequently formed  a
 wholly-owned subsidiary, Rancho Aloe (C.R.), S.A., a Costa Rica corporation,
 which acquired the land in April 1998.  The Company provided a cash  advance
 of $187,000, which is evidenced by  a note receivable, due in  installments,
 with payments being made monthly based upon farm production.

 The Company also advanced $300,000 to Aloe & Herbs in November 1998 for  the
 acquisition of an irrigation  system to improve production  on the farm  and
 allow harvesting of leaves year-round.  The Company was also granted a five-
 year warrant to purchase 300,000 shares of common stock of Aloe & Herbs.  In
 the fourth quarter of 1998, the  Company fully reserved all amounts owed  to
 it by Aloe &  Herbs, in the total  amount of $487,000,  due to the  start-up
 nature of the  business.  In  2001, the Company  received payments  totaling
 $37,000 from Aloe &  Herbs against the  amount due.   The first shipment  of
 leaves from  Rancho Aloe  to the  Company was  made in  March 1999  and  the
 Company purchased a  total of $450,000  of Aloe vera  L. leaves from  Rancho
 Aloe 2001.  The Company's interest in Aloe  & Herbs at December 31, 2001  is
 approximately 24%.

 In November 1997, the Company entered into an agreement with Comerica  Bank-
 Texas for a $3,000,000  line of credit, secured  by accounts receivable  and
 inventory.  This credit facility had  an outstanding balance of $763,000  at
 December 31, 2001 to fund operating needs.

 The Company believes  that its available  cash resources  and expected  cash
 flows from  operations  will provide  the  funds necessary  to  finance  its
 current operations. However, the  Company does not  expect that its  current
 cash resources will be sufficient to  finance future major clinical  studies
 and costs of filing new drug applications necessary to develop its  products
 to their full commercial potential.   Additional funds, therefore, may  need
 to be raised through equity offerings, borrowings, licensing arrangements or
 other means, and  there is no  assurance that the  Company will  be able  to
 obtain such funds on satisfactory terms when they are needed.

 The Board of Directors recently authorized  the Company to repurchase up  to
 one million  shares  of its  outstanding  Common  Stock.   See  "Market  for
 Registrant's Common  Equity and  Related Stockholder  Matters" above.    The
 Company believes  it has  the financial  resources necessary  to  repurchase
 shares from time to time pursuant to the Board's repurchase authorization.

 Management has identified  the following accounting  policies  as  critical.
 Our accounting  policies are  more  fully described  in  Footnote 2  of  the
 Financial Statements.  The preparation of consolidated financial  statements
 requires the  Company  to  make estimates  and  judgments  that  affect  the
 reported amounts of assets, liabilities, revenues and expenses, and  related
 disclosure of contingent assets and liabilities.  On an on-going basis,  the
 Company evaluates  its  estimates,  including  those  related  to  revenues,
 product returns, bad debts and inventories. The Company bases its  estimates
 on historical experience and on various other assumptions that are  believed
 to be reasonable  under the  circumstances, the  results of  which form  the
 basis  for  making  judgments  about  the  carrying  values  of  assets  and
 liabilities that  are  not readily  apparent  from other  sources.    Actual
 results may  differ  from these  estimates  under different  assumptions  or
 conditions.

 The Company believes the following  critical accounting policies affect  its
 more significant  judgments and  estimates used  in the  preparation of  its
 consolidated financial statements.  The Company records estimated reductions
 to revenue for  incentive offerings including  promotions and other  volume-
 based incentives as well as estimates for returns based upon recent history.
 If market  conditions were to decline or inventory was in danger of expiring
 or becoming  obsolete, the  Company may  take actions  to increase  customer
 incentive offerings  possibly  resulting  in  an  incremental  reduction  of
 revenue at the time  the incentive is offered.  Additionally, if demand  for
 the Company's product were to drop,  the Company's distributors may  request
 return of product  for credit  causing a  need to  re-evaluate and  possibly
 increase the reserve for product  returns. The Company maintains  allowances
 for doubtful accounts for estimated losses  resulting from the inability  of
 its customers to make required payments.  If the financial condition of  the
 Company's customers were to deteriorate, resulting in an impairment of their
 ability to make payments, additional allowances may be required. The Company
 writes  down  its  inventory  for  estimated  obsolescence  or  unmarketable
 inventory equal to  the difference  between the  cost of  inventory and  the
 estimated market value based upon assumptions about future demand and market
 conditions.   If actual  market conditions  are  less favorable  than  those
 projected by management, additional inventory write-downs may be required.

 The Company is subject to regulation by numerous governmental authorities in
 the United States and  other countries.  Certain  of the Company's  proposed
 products will require governmental  approval prior to  commercial use.   The
 approval process applicable to prescription pharmaceutical products  usually
 takes several years  and typically requires  substantial expenditures.   The
 Company and  any licensees  may encounter  significant delays  or  excessive
 costs in their  respective efforts to  secure necessary  approvals.   Future
 United States  or  foreign legislative  or  administrative acts  could  also
 prevent or  delay regulatory  approval of  the Company's  or any  licensees'
 products.  Failure to obtain requisite governmental approvals or failure  to
 obtain approvals of the scope requested could delay or preclude the  Company
 or  any  licensees  from  marketing  their  products,  or  could  limit  the
 commercial use of the products, and  thereby have a material adverse  effect
 on the Company's liquidity and financial condition.

 Impact of Inflation
 -------------------
 The Company does not believe that inflation has had a material impact on its
 results of operations.

 Fiscal 2001 Compared to Fiscal 2000
 -----------------------------------
 Total revenues were $17,594,000 in 2001, compared with $23,103,000 in  2000.
 Total sales  of  the Company's  wound and skin  care products  in 2001  were
 $7,921,000 as compared to  $11,971,000 in 2000.   The decrease in wound  and
 skin care revenue was primarily effected by the distribution agreement  with
 Medline which significantly lowered the  Company's selling prices for  these
 products in exchange for Medline assuming all of the selling, marketing  and
 distribution activities  and the  related costs,  and paying  the Company  a
 royalty.   The Company  recorded  royalty income  of  $2.5 million  in  2001
 related to this agreement.  Partially offsetting this revenue reduction  due
 to pricing was  a  10%  increase in unit volume in 2001 as compared to 2000.
 The Company also sells products to international distributors, primarily  in
 Europe, and Central and  South America.  Total  international sales in  2001
 were $1,315,000 as  compared to $1,343,000  in 2000.   Included in the  2001
 amount were sales of $386,000 of  wound care products, which was a  decrease
 of $153,000 from 2000.

 Sales of the Company's  oral technology products  increased from $68,000  in
 2000 to $129,000  in 2001 because  of significantly increased  sales of  the
 product to an international  customer.  Included in  this line are  products
 for the management of oral mucositis/stomatitis and oral lesions and ulcers.

 Of the 2001 total Caraloe sales, $5,367,000 was related to the sale of  bulk
 Manapol[R] powder. Caraloe currently sells bulk Manapol[R] powder to a major
 customer  under  a three-year, non-exclusive supply and licensing agreement.
 The current agreement has been extended  and expires in August 2003.   Sales
 to this customer decreased from $8,794,000 in 2000 to $5,192,000 in 2001.

 In July  1999, Caraloe  launched its  new AloeCeuticals[R]  line of  immune-
 enhancing dietary supplements containing Manapol[R], which are available  in
 liquid, capsule  and tablet  forms.   These products  are sold  directly  to
 health and nutrition  stores and broker/distributors.   They  are also  sold
 through the Company's Internet sites.   Sales of these products in 2000  and
 2001 totaled $446,000 and $538,000, respectively.

 Caraloe also continued to develop its contract manufacturing business during
 2001.  Caraloe manufactures a variety  of products that can be filled  using
 the Company's current equipment including gels, creams, lotions and  drinks.
 Total  contract manufacturing  sales in 2001  were $1,144,000 compared  with
 $779,000 in 2000.

 Cost of sales decreased from $12,782,000  in 2000 to $9,803,000 in 2001,  or
 23.3%.  As  a percentage of  sales, cost of  sales increased  from 55.3%  to
 55.7%.   The increase  in the  cost  of goods  sold percentage  was  largely
 attributable to lower  wound care pricing  as a result  of the  distribution
 agreement with Medline. Offsetting this was  a change in product mix  caused
 by the  decline  in lower  margin  Manapol[R]  sales as  well  as  increased
 efficiency in  the operation  of the  Company's manufacturing  plant in  the
 United States.

 Selling,  general  and   administrative  expenses   ("SG&A")  decreased   to
 $5,016,000 from $10,162,000,  or 50.6%.   Included  in this  decrease was  a
 $4,550,000 reduction  in  selling  and marketing  expenses  for  wound  care
 products directly related to the Medline Agreement and Medline's acquisition
 of   the   Company's   sales  force  that   existed  on  December  1,  2000.
 Additionally, the  Company  took  advantage of  the  reduced  administrative
 burdens of supporting the sales force  by reducing costs in all  departments
 affected by the reduction in sales personnel.

 Research and development  ("R&D") expenses decreased  to $2,442,000 in  2001
 from $3,602,000 in 2000, or 32.2%.   This decrease was primarily the  result
 of  a  reduction   of  $623,000   in  expenditures   for  the   unsuccessful
 Aliminase[TM] clinical trial  as well as  refocusing efforts and  priorities
 within the department.  The Company continued its efforts in basic  research
 during 2001,  including  work  on a  new  and  unique  complex  carbohydrate
 (CR1013) which has potential near-term utility in the area of drug delivery.
 Also  included  in  total R&D  activities  during 2001  were  various  small
 clinical trials  designed  to  collect data  in  support  of  the  Company's
 products.

 Net interest income of $32,000 was realized in 2001 versus $80,000 in  2000,
 with the variance primarily due to lower interest rates in 2001.

 There was  no  provision for  income  taxes in  2001  due to  the  Company's
 utilization of net operating loss carryforwards.  The Company has provided a
 valuation allowance against all deferred tax asset balances at December  31,
 2001 and 2000 due to uncertainty regarding realization of the asset.

 The Company's  net  income for  2001  was $378,000,  versus  a net  loss  of
 $3,476,000 for  2000.    The  2001  net income  was  due  to  the  operating
 efficiencies occurring  as  a  result of  the  distribution  agreement  with
 Medline Industries, lower production costs as  well as increased unit  sales
 in 2001  of  the Company's  wound  and skin  care  products.   2001  results
 benefited from a  one time gain  of $200,000 from  adjustments to state  tax
 liabilities booked  in  prior periods.    The  loss in  2000  was  primarily
 attributable to  lower selling  prices for  wound  care products  and  lower
 volumes of Manapol[R] sales, high selling and marketing costs for wound care
 products and final costs for the Aliminase Clinical Trial.   The net  income
 per share was $0.04 in 2001,  compared to a net loss  per share of $0.36  in
 2000.

 Fiscal 2000 Compared to Fiscal 1999
 -----------------------------------
 Total revenues were $23,103,000 in 2000, compared with $28,128,000 in  1999.
 Sales of  Manapol[R] by  Caraloe in the form  of raw materials and  consumer
 nutritional  products,  decreased  14.7%,   from  $12,739,000  in  1999   to
 $10,862,000 in  2000.   Total sales  of the  Company's wound  and skin  care
 products in  2000  were $11,971,000  as  compared to  $15,389,000  in  1999,
 primarily due  to a  significant reduction  in  pricing to  maintain  market
 competitiveness.  While  wound care sales  declined 21.9%  versus the  prior
 year, unit  volumes declined  only 5%.   The  Company recorded  $208,000  in
 royalty income related to the distribution agreement with Medline Industries
 in 2000.

 Total international sales in 2000 were $1,343,000 as compared to  $1,423,000
 in 1999.  Included in the 2000 amount  were sales of $539,000 of wound  care
 products, which was a decrease of $621,000 from 1999.

 The Company's oral technology line included  products for the management  of
 oral mucositis/stomatitis  and oral  lesions and  ulcers.   Sales  of  these
 products decreased  from $374,000  in 1999  to $68,000  in 2000  because  of
 significantly  lower  sales  of  the product  to an  international customer.
 Sales of the Company's veterinary products increased from $47,000 in 1999 to
 $130,000 in 2000.

 Of the 2000 total  Manapol[R] sales, $9,470,000 was  related to the sale  of
 bulk Manapol[R] powder. Caraloe currently sells bulk Manapol[R] powder to  a
 major customer  under  a  three-year,  non-exclusive  supply  and  licensing
 agreement.  The current  agreement, expires in August  2002.  Sales to  this
 customer decreased from $11,422,000 in 1999 to $8,794,000 in 2000.

 Caraloe launched its new  AloeCeuticals[R] line of immune-enhancing  dietary
 supplements containing  Manapol[R]  in July  1999,  which are  available  in
 liquid, capsule and tablet forms.  Sales of these products in 1999 and  2000
 totaled $131,000 and $446,000, respectively.

 Caraloe also continued to develop its contract manufacturing business during
 2000.  Products  manufactured include  gels and  creams utilizing  customer-
 developed formulas.  In September 1999, Caraloe began to produce nutritional
 beverages for a direct sales company selling nutritional products through  a
 multi-level sales organization.  Total contract manufacturing sales in  2000
 under the  agreements  with  these customers  were  $779,000  compared  with
 $292,000 in 1999.

 Cost of sales decreased from $13,640,000 in 1999 to $12,782,000 in 2000,  or
 6.3%.  As  a percentage  of sales,  cost of  sales increased  from 48.5%  to
 55.3%.   The increase  in the  cost  of goods  sold percentage  was  largely
 attributable to lower sales as a result of product mix and downward  pricing
 pressures.

 Selling,  general  and   administrative  expenses   ("SG&A")  decreased   to
 $10,162,000 from $10,364,000,  or 1.9%.   Partially offsetting the  decrease
 was an increase in the selling  and marketing expenses for Caraloe  products
 of $296,000.  This  increase primarily represented  the costs for  increased
 advertising  and  marketing  support   of  the  AloeCeuticals[R]  brand   of
 Manapol[R] immune  enhancing  products.   The  decrease  in  SG&A  costs  as
 compared to 1999 is  partially attributable to  lower costs associated  with
 the provisions of the  contract with Medline  Industries, whereby the  wound
 and skin care sales force was  transferred to Medline effective December  1,
 2000.   Additionally, distribution  costs were  lower  by $115,000  in  2000
 compared to  1999.   This was  due to  slightly lower  volumes and  improved
 freight rates.

 Research and development  ("R&D") expenses decreased  to $3,602,000 in  2000
 from $5,300,000 in 1999, or 32.0%.   This decrease was primarily the  result
 of  a  reduction  of  $2,243,000   in  expenditures  for  the   unsuccessful
 Aliminase[TM] clinical trial offset by an  increase in basic research  costs
 of approximately  $550,000.   The Company  continued  its efforts  in  basic
 research  during  2000,  including  work  on   a  new  and  unique   complex
 carbohydrate (CR1013) which has potential near-term  utility in the area  of
 drug delivery.  Also included in  the total R&D activities during 2000  were
 various small clinical  trials designed to  collect data in  support of  the
 Company's products.

 In the  fourth quarter  of 1999,  the Company  determined that  it could  no
 longer satisfy  the  minimum purchase  requirements  of its  agreement  with
 Oregon Freeze Dry, Inc. ("OFD") and thus established a reserve of $1,042,000
 to cover its estimated liability to.   The Company increased the reserve  by
 $223,000 in the second quarter of 2000.

 Net interest income  of $80,000  was realized  in 2000,  versus $105,000  in
 1999, with the variance primarily due to higher amounts drawn on the line of
 credit.

 There was no  provision for income  taxes in 2000.   A tax  benefit was  not
 recognized in 2000 due to the Company's recording an offsetting deferred tax
 asset valuation allowance.  The Company  has provided a valuation  allowance
 against all deferred tax asset balances at December 31, 2000 and 1999 due to
 uncertainty regarding realization of the asset.

 The Company's  net  loss for  2000  was $3,476,000,  versus  a net  loss  of
 $2,033,000 for 1999.   The loss in 2000  is primarily attributable to  lower
 selling prices  for wound  care products  and  lower volumes  of  Manapol[R]
 sales.  The  1999 loss was  due to the  $2,866,000 in costs  related to  the
 Aliminase[TM]  Clinical  Trial  and  the  $1,042,000  reserve  for  the  OFD
 contract.  The net loss per share was $0.36 in 2000, compared to a net  loss
 per share of $0.22 in 1999.

 Forward Looking Statements
 --------------------------
 All statements other than  statements of historical  fact contained in  this
 report, including  but  not  limited  to  statements  in  this  Management's
 Discussion and Analysis  of Financial  Condition and  Results of  Operations
 (and similar statements  contained in  the Notes  to Consolidated  Financial
 Statements) concerning the Company's financial position, liquidity,  capital
 resources and results of operations, its prospects for the future and  other
 matters, are forward-looking statements.  Forward-looking statements in this
 report generally include or are accompanied  by words such as  "anticipate",
 "believe", "estimate",  "expect",  "intend", "will",  "would",  "should"  or
 words of similar import.  Such  forward-looking statements include, but  are
 not limited to, statements regarding the ability of local suppliers of  Aloe
 vera L. leaves in Costa  Rica to supply the  Company's need for leaves;  the
 condition,  capacity  and  adequacy  of  the  Company's  manufacturing   and
 laboratory facilities and equipment; the adequacy of the protection that the
 Company's patents provide  to the conduct  of its  business operations;  the
 adequacy of the  Company's protection of  its trade  secrets and  unpatented
 proprietary know-how; the Company's belief that the claims of the Plaintiffs
 identified under Item  3 of Part  I of this  report are  without merit;  the
 adequacy of the Company's  cash resources and cash  flow from operations  to
 finance its current operations; and the Company's intention, plan or ability
 to repurchase shares of its outstanding Common Stock, to initiate,  continue
 or complete clinical and other research  programs, to obtain financing  when
 it is needed, to fund its  operations from revenue and other available  cash
 resources, to enter  into licensing agreements,  to develop  and market  new
 products and  increase  sales of  existing  products, to  obtain  government
 approval to market new products, to file additional patent applications,  to
 rely on  trade secrets,  unpatented proprietary  know-how and  technological
 innovation, to reach  satisfactory resolutions  of its  disputes with  third
 parties, to reach a satisfactory agreement with its supplier of freeze-dried
 products, to acquire sufficient quantities of Aloe vera L. leaves from local
 suppliers at significant savings, to collect  the amounts owed to it by  its
 distributors, customers and  other third parties,  and to use  its tax  loss
 carryforwards before they expire, as well as various other matters.

 Although the  Company  believes  that  the  expectations  reflected  in  its
 forward-looking statements are  reasonable, no assurance  can be given  that
 such expectations  will  prove  correct.    Factors  that  could  cause  the
 Company's results to differ  materially from the  results discussed in  such
 forward-looking statements include but are not limited to the  possibilities
 that the Company may be unable to obtain the funds needed to carry out large
 scale clinical trials and other research and development projects, that  the
 results of the Company's clinical trials may not be sufficiently positive to
 warrant continued development and marketing of the products tested, that new
 products may not  receive required approvals  by the appropriate  government
 agencies or may not meet with adequate customer acceptance, that the Company
 may not be able to obtain financing when needed, that the Company may not be
 able to obtain appropriate licensing agreements for products that it  wishes
 to market  or products  that it  needs assistance  in developing,  that  the
 Company's efforts  to improve  its sales  and reduce  its costs  may not  be
 sufficient to  enable it  to  fund its  operating  costs from  revenues  and
 available cash resources, that one or more of the customers that the Company
 expects to purchase significant quantities of  products from the Company  or
 Caraloe may  fail to  do  so, that  competitive  pressures may  require  the
 Company to lower the  prices of or increase  the discounts on its  products,
 that the  Company's  sales of  products  it is  contractually  obligated  to
 purchase from suppliers  may not  be sufficient  to enable  and justify  its
 fulfillment of those  contractual purchase obligations,  that other  parties
 who owe the Company substantial amounts of  money may be unable to pay  what
 they owe the Company, that the Company's patents may not provide the Company
 with adequate protection, that the Company's manufacturing facilities may be
 inadequate to meet demand, that the Company's distributors may be unable  to
 market the Company's products successfully, that the Company may not be able
 to resolve its disputes  with third parties in  a satisfactory manner,  that
 the Company  may  be unable  to  reach  a satisfactory  agreement  with  its
 supplier of freeze-dried  products or with  other important suppliers,  that
 the Company may not be  able to use its  tax loss carryforwards before  they
 expire, that  the  Company  may  not  have  sufficient  financial  resources
 necessary to repurchase shares of its outstanding Common Stock, and that the
 Company may be unable  to produce or  obtain, or may  have to pay  excessive
 prices for, the raw materials or products it needs.

 All forward-looking statements  in this  report are  expressly qualified  in
 their entirety by the cautionary statements in the two immediately preceding
 paragraphs.


 ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 Foreign Currency
 ----------------
 The Company's manufacturing  operation in Costa  Rica accounted  for 40%  of
 cost of  sales for  the year  ended December  31, 2001.   As  a result,  the
 Company's financial results could be significantly affected by factors  such
 as changes  in foreign  currency exchange  rates or  economic conditions  in
 Costa Rica.  When the U.S. Dollar strengthens against the Costa Rica  Colon,
 the cost  of sales  decreases.  During 2001,  the  exchange rate  from  U.S.
 Dollars  to Costa Rica Colones increased  by 7% to 341 at December 31, 2001.
 The effect  of an  additional 10%  strengthening in  the value  of the  U.S.
 Dollar relative to  the Costa Rica  Colones would result  in an increase  of
 $64,200 in gross profit.  The Company's sensitivity analysis of the  effects
 of changes in foreign currency rates  does not factor in a potential  change
 in sales levels or local currency prices.

 Sales of products  to foreign  markets  comprised  7.5%  of sales  for 2001.
 These sales are generally denominated in U.S. Dollars.  The Company does not
 believe that changes  in foreign currency  exchange rates  or weak  economic
 conditions in foreign markets in which the Company distributes its  products
 would have a significant effect on  operating results.  If sales to  foreign
 markets increase in future periods, the effects could become significant.

 For quantitative and  qualitative disclosures about  market risk related  to
 the supply of Aloe vera L. leaves, see "Business."


 ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 The response to Item 8 is submitted as a separate section of this Form 10-K.
 See Item 14.


 ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

 There were no  changes in or  disagreements with  the Company's  independent
 public accountants  on accounting  matters  or financial  disclosure  during
 1999, 2000 or 2001 (to the date of filing of this report).
<PAGE>

                                   PART III


 ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

 The information required by Item 10  of Form 10-K is hereby incorporated  by
 reference from the  information appearing  under the  captions "Election  of
 Directors," "Executive  Officers" and  "Section 16(a)  Beneficial  Ownership
 Reporting Compliance" in the  Company's definitive Proxy Statement  relating
 to its 2002 annual meeting of shareholders, which will be filed pursuant  to
 Regulation 14A  within  120  days after  the  Company's  fiscal  year  ended
 December 31, 2001.


 ITEM 11.  EXECUTIVE COMPENSATION.

 The information required by Item 11  of Form 10-K is hereby incorporated  by
 reference from  the  information  appearing  under  the  caption  "Executive
 Compensation" in the  Company's definitive Proxy  Statement relating to  its
 2002 annual  meeting  of  shareholders, which  will  be  filed  pursuant  to
 Regulation 14A  within  120  days after  the  Company's  fiscal  year  ended
 December 31, 2001.


 ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

 The information required by Item 12  of Form 10-K is hereby incorporated  by
 reference from  the  information  appearing  under  the  captions  "Security
 Ownership of  Management"  and  "Principal Shareholders"  in  the  Company's
 definitive  Proxy  Statement  relating  to   its  2002  annual  meeting   of
 shareholders, which will be filed pursuant to Regulation 14A within 120 days
 after the Company's fiscal year ended December 31, 2001.


 ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

 The information,  if  any,  required by  Item  13  of Form  10-K  is  hereby
 incorporated by reference from the  information appearing under the  caption
 "Certain Transactions", if any, in the Company's definitive Proxy  Statement
 relating to its  2002 annual meeting  of shareholders, which  will be  filed
 pursuant to Regulation 14A within 120  days after the Company's fiscal  year
 ended December 31, 2001.
<PAGE>

                                   PART IV

 ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

 (a)(1)    Financial Statements.

           Reference is made  to the  index on  page F-1  for a  list of  all
           financial statements filed as a part of this Annual Report.

    (2)    Financial Statement Schedules.

           Reference is made  to the  index on  page F-1  for a  list of  one
           financial statement  schedule  filed  as a  part  of  this  Annual
           Report.

    (3)    Exhibits.

           Reference is made to  the Index to Exhibits  on pages E-1  through
           E-11 for a list of all exhibits to this report.

 (b)       Reports on Form 8-K.

           The Company  filed a  Form 8-K  Report dated  March 20,  2002  to
           report certain amendments to its Employee Stock Purchase Plan.


<PAGE>

                        CARRINGTON LABORATORIES, INC.
           INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES


 Consolidated Financial Statements of the Company:


      Consolidated Balance Sheets --
           December 31, 2000 and 2001                           F - 2


      Consolidated Statements of Operations -- years ended
           December 31, 1999, 2000 and 2001                     F - 3

      Consolidated Statements of Shareholders' Investment
           -- years ended December 31, 1999, 2000 and 2001      F - 4

      Consolidated Statements of Cash Flows -- years ended
           December 31, 1999, 2000 and 2001                     F - 5

      Notes to Consolidated Financial Statements                F - 6

      Financial Statement Schedule
           Valuation and Qualifying Accounts                    F - 16

      Report of Ernst & Young LLP, Independent Auditors         F - 17

<PAGE>
<TABLE>

 Consolidated Balance Sheets
 (Amounts in thousands, except share and per share amounts)

                                                         December 31,
                                                       2000        2001
                                                      -------     -------
 <S>                                                 <C>         <C>
 ASSETS:
 Current Assets:
      Cash and cash equivalents                      $  3,200    $  3,454
      Accounts receivable, net of allowance
        for doubtful accounts of $98 and
        $100 in 2000 and 2001, respectively             2,181       1,622
      Inventories                                       4,723       5,338
      Prepaid expenses                                    183         189
                                                      -------     -------
 Total current assets                                  10,287      10,603

 Property, plant and equipment, net                    10,322      10,404
 Other assets                                              93         210
                                                      -------     -------
 Total assets                                        $ 20,702    $ 21,217
                                                      =======     =======

 LIABILITIES AND SHAREHOLDERS' INVESTMENT:
 Current Liabilities:
      Note payable                                   $    763    $    763
      Accounts payable                                  1,764       1,099
      Accrued liabilities                               1,068         884
      Deferred revenue                                    417         417
                                                      -------     -------
 Total current liabilities                              4,012       3,163

 Deferred revenue, long-term                              250       1,125

 Commitments and contingencies

 SHAREHOLDERS' INVESTMENT:
 Common stock, $.01 par value, 30,000,000 shares
      authorized, 9,659,087 and 9,809,087 shares
      issued and outstanding at December 31,
      2000 and 2001, respectively                          97          98
 Capital in excess of par value                        52,319      52,429
 Deficit                                              (35,976)    (35,598)
                                                      -------     -------
 Total shareholders' investment                        16,440      16,929
                                                      -------     -------
 Total liabilities and shareholders' investment      $ 20,702    $ 21,217
                                                      =======     =======

 The accompanying notes are an integral part of these balance sheets.

</TABLE>
<PAGE>
<TABLE>


 Consolidated Statements of Operations
 (Amounts in thousands, except per share amounts)


                                                 Years Ended December 31,
                                              -----------------------------
                                                1999       2000       2001
                                               ------     ------     ------
 <S>                                          <C>        <C>        <C>
 Revenue:
   Net sales                                  $28,128    $22,833    $15,115
   Royalty Income                                   -        270      2,479
                                               ------     ------     ------
 Total Revenue                                 28,128     23,103     17,594
 Costs and expenses:
   Cost of sales                               13,640     12,782      9,803
   Selling, general and administrative         10,346     10,162      5,016
   Research and development                     2,434      2,979      2,442
   Research and development, Aliminase[TM]
      clinical trial expenses                   2,866        623          -
   Charges related to Oregon Freeze Dry, Inc.   1,042        223          -
   Interest income, net                          (105)       (80)       (32)
   Other income                                   (62)      (110)       (13)
                                               ------     ------     ------
 Net income (loss) before income taxes         (2,033)    (3,476)       378
 Provision for income taxes                         -          -          -
                                               ------     ------     ------
 Net income (loss)                            $(2,033)   $(3,476)   $   378
                                               ======     ======     ======


 Net income (loss) per share - basic and
 diluted                                      $ (0.22)   $ (0.36)   $  0.04
                                               ======     ======     ======

 The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>
<TABLE>


 Consolidated Statements of Shareholders' Investment
 For the Years Ended December 31, 1999, 2000 and 2001
 (Amounts in thousands)


                                            Capital in               Total
                                            Excess of             Shareholders'
                              Common Stock  Par Value   Deficit    Investment
                              ------------  ---------   -------    ----------
                              Shares Amount
 ----------------------------------------------------------------------------
 <S>                           <C>    <C>    <C>       <C>           <C>
 Balance,
   January 1, 1999             9,350  $ 94   $51,736   $(30,467)     $21,363
 Issuance of common stock for
   employee stock purchase
   plan                           35     -       149          -          149
 Issuance of common stock for
   stock option plan              10     -        25          -           25
 Net loss                          -     -         -     (2,033)      (2,033)
 ----------------------------------------------------------------------------
 Balance,
   December 31, 1999           9,395    94    51,910    (32,500)      19,504
 Issuance of common stock for
   employee stock purchase
   plan                          170     2       173          -          175
 Issuance of common stock for
   stock option plan              94     1       236          -          237
 Net loss                          -     -         -     (3,476)      (3,476)
 ----------------------------------------------------------------------------
 Balance,
   December 31, 2000           9,659    97    52,319    (35,976)      16,440
 Issuance of common stock for
   employee stock purchase
   plan                          150     1       110          -          111
 Net Income                        -     -         -        378          378
                               -----   ---    ------    -------       ------
 Balance
   December 31, 2001           9,809  $ 98   $52,429   $(35,598)     $16,929
                               =====   ===    ======    =======       ======

 The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>
<TABLE>


 Consolidated Statements of Cash Flows
 (Amounts in thousands)
                                                    Years Ended December 31,

                                                    1999       2000      2001
                                                   ------     ------    ------
 <S>                                              <C>        <C>       <C>
 Cash flows from operating activities:
   Net income (loss)                              $(2,033)   $(3,476)  $   378
   Adjustments to reconcile net income (loss)
        to net cash provided by (used in)
        operating activities:
      Depreciation and amortization                 1,028      1,043     1,050
      Loss on disposal of assets                        -         65         -
      Charge related to Oregon Freeze Dry, Inc.     1,042        223         -
      Provision for inventory obsolescence              -        316        91
   Changes in operating assets and liabilities:
      Accounts receivable, net                       (729)     1,508       559
      Inventories                                    (215)       294      (706)
      Prepaid expenses                               (177)       390        (6)
      Other assets                                    (11)       515      (117)
      Accounts payable and accrued liabilities        206     (1,328)     (849)
      Deferred revenue                                  -        667       875
                                                   ------     ------    ------
   Net cash provided by (used in)
     operating activities                            (889)       217     1,275
 Cash flows from investing activities:
   Purchases of property, plant and equipment        (963)      (445)   (1,132)
                                                   ------     ------    ------
      Net cash used in investing activities          (963)      (445)   (1,132)
 Cash flows from financing activities:
   Issuances of common stock                          174        412       111
   Proceeds of short-term debt                        200        563         -
                                                   ------     ------    ------
      Net cash provided by financing
        activities                                    374        975       111
                                                   ------     ------    ------
 Net increase (decrease) in cash and cash
   equivalents                                     (1,478)       747       254
 Cash and cash equivalents at beginning of year     3,931      2,453     3,200
                                                   ------     ------    ------
 Cash and cash equivalents at end of year         $ 2,453    $ 3,200   $ 3,454
                                                   ======     ======    ======
 Supplemental Disclosure of Cash Flow
   Information
   Cash paid during the year for interest         $     7    $    40   $    58
   Cash paid during the year for income taxes           -          -         -


 The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>

               NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


 NOTE ONE.  BUSINESS

 Carrington  Laboratories,   Inc.  (the   "Company")  is   a   research-based
 biopharmaceutical, medical device, raw  materials and nutraceutical  company
 engaged in the development, manufacturing and marketing of naturally-derived
 complex  carbohydrates  and  other  natural  product  therapeutics  for  the
 treatment of  major illnesses,  the dressing  and management  of wounds  and
 nutritional supplements.

 The Company's Medical Services Division offers a comprehensive line of human
 wound management  products to  hospitals,  nursing homes,  alternative  care
 facilities and the  home health  care market  and also  offers vaccines  and
 wound and skin  care products  to the veterinary  market.   The Company  and
 Medline Industries, Inc. ("Medline") entered into a Distributor  and License
 Agreement dated November 3, 2000, under which the Company granted to Medline
 the exclusive right,  subject to certain  limited exceptions, to  distribute
 all of the Company's  wound and skin care  products (the "Products") in  the
 United States, Canada, Puerto Rico and the Virgin Islands for a term of five
 years that began December 1, 2000.   The agreement provides that  Carrington
 will continue to manufacture its existing line of Products and sell  them to
 Medline at specified prices.  The  prices, which are generally firm for  the
 first two years of the contract  term, are thereafter subject to  adjustment
 not more than once each year to reflect increases in manufacturing cost.

 The agreement also grants Medline a  nonexclusive license to use certain  of
 the Company's trademarks in  connection with the marketing of the  Products.
 In addition, it permits Medline, if it so elects, to use those trademarks in
 connection with the marketing of various Medline products and other products
 not manufactured by the Company (collectively, "Other Products").

 The agreement requires Medline  to pay the Company  a base royalty  totaling
 $12,500,000 in quarterly installments  that began on December  1, 2000.   In
 addition to the base royalty, if  Medline elects to market any of  the Other
 Products under any of the Company's trademarks, Medline must pay the Company
 a royalty of  between one percent  and five percent  of Medline's  aggregate
 annual net sales of  the Products and the  Other Products, depending on  the
 amount of the  net sales,  except that the  royalty on  certain high  volume
 commodity products will be two percent.

 Caraloe, Inc., a subsidiary, markets or licenses consumer products  and bulk
 raw material  products.   Principal sales  of Caraloe,  Inc.,  are bulk  raw
 material products which are sold to United States manufacturers  who include
 the high quality extracts from Aloe vera L. in their finished products.

 The Company formed a subsidiary,  DelSite Biotechnologies, Inc., in  October
 2001  as  a  vehicle  to  further  the  development  of  CR1013,  a  complex
 carbohydrate that  the Company  is developing  for use  as  a drug  delivery
 system.

 The Company's products are produced at its plants in Irving, Texas and Costa
 Rica.  A  portion of  the Aloe  vera L.  leaves used  for manufacturing  the
 Company's products are  grown on a  Company-owned farm in  Costa Rica.   The
 remaining leaves are purchased from other producers in Costa Rica.


 NOTE TWO.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 PRINCIPLES OF CONSOLIDATION.  The consolidated financial  statements include
 the accounts of Carrington Laboratories, Inc., and its subsidiaries,  all of
 which are wholly  owned.   All intercompany accounts  and transactions  have
 been eliminated in consolidation.

 CASH  EQUIVALENTS.    The  Company's  policy  is  that  all   highly  liquid
 investments purchased with  a maturity of  three months or  less at date  of
 acquisition  are  considered  to   be  cash  equivalents  unless   otherwise
 restricted.

 INVENTORY.  Inventories are recorded at the lower of cost  (first-in, first-
 out) or market.

 PROPERTY, PLANT AND EQUIPMENT.  Property,  plant and equipment are  recorded
 at cost less  accumulated depreciation.   Land  improvements, buildings  and
 improvements,  furniture  and  fixtures  and  machinery  and  equipment  are
 depreciated on the straight-line  method over their estimated useful  lives.
 Leasehold improvements and equipment under capital leases are amortized over
 the terms of the respective leases.

 LONG-LIVED ASSETS.   The  Company regularly  reviews  long-lived assets  for
 impairment whenever events  or changes  in circumstances  indicate that  the
 carrying amounts of the  assets may not be  recoverable.  Recoverability  is
 based on whether the  carrying amount of the  asset exceeds the current  and
 anticipated undiscounted cash flows related to the asset.

 TRANSLATION  OF   FOREIGN  CURRENCIES.      The  functional   currency   for
 international  operations  (primarily  Costa  Rica)  is   the  U.S.  Dollar.
 Accordingly, such foreign entities translate monetary assets and liabilities
 at year-end  exchange  rates, while  non-monetary  items are  translated  at
 historical rates.    Revenue and  expense  accounts are  translated  at  the
 average rates  in  effect  during  the year,  except  for  depreciation  and
 amortization,  which  are  translated  at  historical  rates.    Translation
 adjustments  and  transaction  gains  or   losses  are  recognized  in   the
 consolidated statement of operations in the year of occurrence.

 REVENUE RECOGNITION.  The Company recognizes revenue when title to the goods
 transfers and collectibility is reasonably assured.  For the majority of the
 Company's sales, this occurs at the time of shipment.

 DEFERRED REVENUE.  Deferred revenue is related to the licensing  and royalty
 agreement with  Medline  Industries.    Royalties  and  licensing  fees  are
 amortized on  a  straight-line basis  with  amounts received  in  excess  of
 amounts amortized reflected in the financial statements as deferred revenue.

 FEDERAL INCOME TAXES. The  Company uses the  liability method of  accounting
 for income taxes.  Under this method, deferred income taxes are  recorded to
 reflect the tax consequences of differences between the tax basis  of assets
 and liabilities and the financial reporting basis.  Valuation allowances are
 provided against net deferred  tax assets when it  is more likely than  not,
 based on available evidence, that assets may not be realized.

 RESEARCH AND DEVELOPMENT.   Research and development  costs are expensed  as
 incurred.    Certain  laboratory  and  test  equipment  determined  to  have
 alternative future uses  in other  research and  development activities  has
 been capitalized and is depreciated as research and development expense over
 the life of the equipment.

 ADVERTISING.  Advertising expense  is charged to operations  in the year  in
 which such costs are incurred.  Advertising expense has not been significant
 for 1999, 2000 or 2001.

 STOCK-BASED COMPENSATION.  The Company has elected to follow APB Opinion No.
 25, "Accounting for  Stock Issued  to Employees," in  the primary  financial
 statements and to  provide supplementary disclosures  required by  Financial
 Accounting Standards  Board  ("FASB")  Statement No.  123,  "Accounting  for
 Stock-Based Compensation" (see Note Seven).

 NET INCOME (LOSS) PER SHARE.  Basic net income (loss) per share  is based on
 the weighted average number of shares of common stock outstanding during the
 year and excludes any dilutive effects of options, warrants  and convertible
 securities.  Diluted  net income (loss)  per share includes  the effects  of
 options,  warrants  and   convertible  securities  unless   the  effect   is
 antidilutive.

 USE OF ESTIMATES.   The  preparation of financial  statements in  conformity
 with accounting principles generally accepted in the United  States requires
 management to  make  estimates  and assumptions  that  affect  the  reported
 amounts of assets and  liabilities at the date  of the financial  statements
 and the  reported amounts  of revenues  and  expenses during  the  reporting
 period.  Actual results could differ from those estimates.

 RECLASSIFICATIONS.  Certain  prior year  amounts have  been reclassified  to
 conform to the current year presentation.

 RECENT ACCOUNTING PRONOUNCEMENTS.  In August 2001, the FASB issued Statement
 No. 144, "Accounting for the Impairment  or Disposal of Long-Lived  Assets,"
 which addresses the financial accounting and reporting for the impairment or
 disposal  of  long-lived  assets  and  supercedes  FASB  Statement  No.  121
 "Accounting for  the  Impairment of  Long-Lived  Assets and  for  Long-Lived
 Assets to be Disposed  of," and the accounting  and reporting provisions  of
 Accounting Principles  Board  Opinion  No. 30,  "Reporting  the  Results  of
 Operations for a Disposal  of a Segment  of a Business."   The Company  will
 adopt Statement  No. 144  as of  January 1,  2002 and  does  not expect  the
 adoption of this statement will have  a significant impact on the  Company's
 financial position or results of operations.


 NOTE THREE.  INVENTORIES

 The following summarizes the  components of inventory  at December 31,  2000
 and 2001, in thousands:


                                                  2000         2001
 ------------------------------------------------------------------
 Raw materials and supplies                     $1,768       $2,041
 Work-in-process                                   878          910
 Finished goods                                  2,077        2,387
 ------------------------------------------------------------------
 Total                                          $4,723       $5,338
 ------------------------------------------------------------------

 The inventory balances  are net  of $441,000  and $516,000  of reserves  for
 obsolete  and  slow  moving  inventory  at  December  31,  2000   and  2001,
 respectively.


 NOTE FOUR.  PROPERTY, PLANT AND EQUIPMENT

 Property, plant and  equipment consisted  of the following  at December  31,
 2000 and 2001, in thousands:
                                                     Estimated
                                  2000      2001     Useful Lives
 ------------------------------------------------------------------
 Land and improvements           $1,389    $1,391
 Buildings and improvements       8,889     8,618    7 to 25 years
 Furniture and fixtures             589       603    4 to 8 years
 Machinery and equipment          6,982     7,800    3 to 10 years
 Leasehold improvements             214       783    1 to 3 years
 Equipment under capital leases     114       114    4 years
 ------------------------------------------------------------------
 Total                           18,177    19,309
 Less accumulated depreciation
   and amortization               7,855     8,905
 ------------------------------------------------------------------
 Property, plant and
   equipment, net               $10,322   $10,404
                                 ======    ======


 The Company's net investment in property, plant and equipment in  Costa Rica
 at December 31, 2000 and 2001 was $4,251,000 and $3,847,000, respectively.


 NOTE FIVE.  ACCRUED LIABILITIES

 The following summarizes  significant components of  accrued liabilities  at
 December 31, 2000 and 2001, in thousands:

                                             2000           2001
 ------------------------------------------------------------------
 Accrued payroll                           $  440           $270
 Accrued Insurance                             91             81
 Accrued taxes                                249            230
 Accrued Professional Fees                      -             70
 Other                                        288            233
 ------------------------------------------------------------------
 Total                                     $1,068           $884
 ------------------------------------------------------------------


 NOTE SIX.  LINE OF CREDIT

 The Company has an agreement with  a bank for a  $3 million line of  credit,
 collateralized by accounts receivable and inventory.   The interest rate  is
 equal to the bank's prime rate (4.75% at December 31, 2001).  As of December
 31, 2001 there was $763,000 outstanding  on the credit line and the  Company
 had $1,437,000 credit available for operations.


 NOTE SEVEN.  COMMON STOCK

 SHARE PURCHASE RIGHTS  PLAN  The  Company has a  share purchase rights  plan
 which provides, among  other rights,  for the  purchase of  common stock  by
 certain existing common stockholders at significantly discounted  amounts in
 the event a person or group acquires or announces the intent to  acquire 15%
 or more of the Company's common stock.  The rights expire in 2011 and may be
 redeemed at any time at the option  of the Board of Directors for  $.001 per
 right.

 EMPLOYEE STOCK PURCHASE PLAN.   The Company has  an Employee Stock  Purchase
 Plan under which employees may purchase common stock at a price equal to the
 lesser of 85% of the market price of the Company's common stock  on the last
 business day preceding the enrollment date  (defined as January 1, April  1,
 July 1 or October 1 of any plan year) or 85% of the market price on the last
 business day of each month.   A maximum of 1,000,000 shares of  common stock
 was reserved for purchase under this Plan.  As of December 31, 2001, a total
 of 475,000 shares  had been purchased  by employees at  prices ranging  from
 $0.85 to $29.54 per share.

 STOCK OPTIONS.   The Company has  an incentive stock  option plan which  was
 approved by the shareholders in 1995 under which incentive stock options and
 nonqualified stock options may be granted to employees, consultants and non-
 employee directors.  Options are granted at a price no less than  the market
 value of the shares on the  date of the grant, except for  incentive options
 to employees  who  own more  than  10% of  the  total voting  power  of  the
 Company's common stock, which must be  granted at a price no less  than 110%
 of the market value.  Employee options are normally granted for terms  of 10
 years.  Options granted prior to  December 1998 normally vested at the  rate
 of  25% per  year  beginning  on the  first anniversary  of the  grant date.
 Options granted in or subsequent to December 1998 normally vest at  the rate
 of 33-1/3% per year  beginning on the first  anniversary of the grant  date,
 but certain options granted in December 1998, 1999 and 2001 were 25%, 50% or
 100% vested on the grant date, with the remainder of each option  vesting in
 equal installments on the first, second and third anniversaries of the grant
 date.  Options to  non-employee directors have terms  of four years and  are
 100% vested on the grant date.  The Company has reserved 1,500,000 shares of
 common stock for issuance under this plan.  As of December 31, 2001, options
 to purchase 12,000 shares were available for future grants under the plan.

 The following summarizes stock option activity  for each of the three  years
 in the period ended December 31, 2001 (shares in thousands):

                                                            Weighted
                                                            Average
                                                            Exercise
                               Shares    Price Per Share     Price
 -------------------------------------------------------------------
 Balance, January 1, 1999       1,388    $ 2.50 to $28.75     $ 4.58
    Granted                       345    $ 2.06 to $ 3.63     $ 2.41
    Lapsed or canceled           (316)   $ 2.50 to $27.00     $ 4.71
    Exercised                     (10)   $ 2.50 to $ 2.50     $ 2.50
 -------------------------------------------------------------------
 Balance, December 31, 1999     1,407    $ 2.06 to $28.75     $ 4.05
    Granted                       263    $ 1.31 to $ 2.03     $ 1.35
    Lapsed or canceled           (333)   $ 2.06 to $28.75     $ 3.35
    Exercised                     (94)   $ 2.50 to $ 4.81     $ 2.58
 -------------------------------------------------------------------
 Balance, December 31, 2000     1,243    $ 1.31 to $28.75     $ 3.78
    Granted                       345    $ 1.05 to $ 1.37     $ 1.17
    Lapsed or canceled           (215)   $ 1.25 to $27.00     $ 3.94
 -------------------------------------------------------------------
 Balance, December 31, 2001     1,373    $ 1.05 to $28.75     $ 3.11
 -------------------------------------------------------------------
 Options exercisable at
    December 31, 1999             553    $ 2.50 to $28.75     $ 4.68
 -------------------------------------------------------------------
 Options exercisable at
    December 31, 2000             605    $ 2.03 to $28.75     $ 4.86
 -------------------------------------------------------------------
 Options exercisable at
    December 31, 2001             902    $ 1.31 to $28.75     $ 3.78
 -------------------------------------------------------------------


 The following table summarizes  information about stock options  outstanding
 at December 31, 2001:

                        Options Outstanding         Options Exercisable
                    ------------------------------  -------------------
                            Weighted
                            Average      Weighted            Weighted
                            Remaining    Average             Average
    Range of                Contractual  Exercise            Exercise
 Exercise Prices   Shares   Life         Price     Shares    Price
  ---------------------------------------------------------------------
 $1.05 to $ 5.25    1,259    6.95 years   $2.86       788       $3.06
  6.00 to  28.75      114    4.93 years    8.71       114        8.71
  --------------    -----    ----------   -----       ---       -----
 $1.05    $28.75    1,373    6.78 years   $3.78       902       $3.78
  ==============    =====    ==========   =====       ===       =====

 The Company accounts for employee stock-based compensation under APB Opinion
 No.  25,  under  which  no  compensation  cost  has  been  recognized.   Had
 compensation cost been  determined based  on the  fair value  of options  at
 their grant dates  consistent with  the method  of FASB  Statement No.  123,
 "Accounting for Stock-Based  Compensation" ("SFAS 123"),  the Company's  net
 income (loss) and diluted  net income (loss) per  share would have been  the
 following pro forma amounts:

 -------------------------------------------------------------------
                                        1999       2000      2001
 -------------------------------------------------------------------
 Net income (loss) (in thousands):
      As reported                     $(2,033)   $(3,476)   $  378
      Pro forma                        (3,485)    (4,650)      (83)

 Diluted net income (loss)
   per share:
      As reported                     $ (0.22)   $ (0.36)   $ 0.04
      Pro forma                         (0.37)     (0.49)    (0.01)
 -------------------------------------------------------------------


 The fair value of each option granted was estimated on the date of the grant
 using the Black-Scholes  option pricing model  with the following  weighted-
 average assumptions used for  grants to employees in  1999, 2000, and  2001,
 respectively: risk-free interest rates of  6.00%, 5.99% and 5.09%;  expected
 dividend yields of  0%; expected volatility  of 74.0%, 89.3%  and 89.7%  and
 expected lives of  10 years.   The weighted average  fair values of  options
 granted were  $0.64,  $1.37 and $1.03 in 1999, 2000, and 2001, respectively.

 STOCK WARRANTS.   From time  to time, the  Company has  granted warrants  to
 purchase common  stock  to  the Company's  research  consultants  and  other
 persons rendering  services to  the Company.   The  exercise  price of  such
 warrants was normally the market price  or in excess of the market  price of
 the common stock  at date  of issuance.   The  following summarizes  warrant
 activity for  each of  the years  in  the period  ending December  31,  2001
 (shares in thousands):
                                                         Weighted
                                                          Average
                           Shares     Price Per Share    Exercise
                                                            Price
 ----------------------------------------------------------------
 Balance, January 1, 1999     65     $ 3.50 to $20.13     $ 6.24
 ----------------------------------------------------------------
 Balance, December 31, 1999   65     $ 3.50 to $20.13     $ 6.24
   Lapsed or canceled        (10)    $ 3.50 to $20.13     $ 6.24
 ----------------------------------------------------------------
 Balance, December 31, 2000   55     $ 3.50 to $20.13     $ 5.01
 ----------------------------------------------------------------
 Balance, December 31, 2001   55     $ 3.50 to $20.13     $ 5.01
 ----------------------------------------------------------------
 Warrants exercisable at
   December 31, 2001          55     $ 3.50 to $20.13     $ 5.01
 ----------------------------------------------------------------

 Warrants outstanding at December 31, 2001  had a weighted average  remaining
 contractual life of 2.38 years.

 COMMON STOCK RESERVED  At December 31, 2001 the Company had reserved a total
 of 1,966,000  common shares  for future  issuance relating  to the  employee
 stock purchase plan, stock option plan and stock warrants disclosed above.


 NOTE EIGHT.  COMMITMENTS AND CONTINGENCIES

 The Company conducts a significant portion of its operations from an office/
 warehouse/distribution facility  under an  operating lease  that expires  in
 2011.   In  addition, the  Company  leases certain  office  equipment  under
 operating  leases  that  expire over  periods  up  to 2003.   The  Company's
 commitments under noncancellable  operating leases as  of December 31,  2001
 were as follows, in thousands:


 Years Ending December 31,
 -------------------------------------------------------------------
 2002                                                $  586
 2003                                                   562
 2004                                                   523
 2005                                                   523
 2006                                                   523
 Thereafter                                           2,881
 -------------------------------------------------------------------
 Total minimum lease payments                        $5,598
 -------------------------------------------------------------------

 Total rental  expense  under operating  leases  was $455,000,  $661,000  and
 $663,000 for the years ended December 31, 1999, 2000 and 2001, respectively.

 In February 1995,  the Company entered  into a commitment  to purchase  $2.5
 million of freeze-dried products from Oregon Freeze Dry, Inc. ("OFD") over a
 66-month period ending in August 2000.   In the fourth quarter of  1999, the
 Company determined  that it  could no  longer satisfy  the minimum  purchase
 requirements of the agreement and thus the Company established a  reserve of
 $1,042,000 for estimated losses under this contract.  In the  second quarter
 of 2000, this reserve was increased by $223,000.

 From time to time in the normal course of business, the Company  is party to
 various  matters  involving  claims  or  possible  litigation.    Management
 believes the ultimate resolution of these  matters will not have a  material
 adverse effect on the Company's financial position or results of operations.

 The Company had  outstanding a letter  of credit in  the amount of  $800,000
 which is  used  as  security  on the  Company's  distribution  and  research
 facility.


 NOTE NINE.  INCOME TAXES

 The tax effects  of temporary  differences that  gave rise  to deferred  tax
 assets and deferred tax  liabilities at December 31,  2000 and 2001 were  as
 follows, in thousands:

                                             2000          2001
 ---------------------------------------------------------------
 Net operating loss carryforward           $14,699      $ 12,965
 Research and development
    and other credits                          661           478
 Property, plant and equipment                 282           340
 Patents                                       270            -
 Inventory                                     368           394
 Other, net                                   (257)           78
 Bad debt reserve                              467           452
 Deferred income                               227           524
 ACI Stock Valuation                           204           204
 Accrued liability                              -             89
 Less - Valuation allowance                (16,921)      (15,524)
                                            ------       -------
                                           $     0      $      0
                                            ======       =======

 The Company  has  provided a  valuation  allowance against  the  entire  net
 deferred tax asset at December 31,  2000 and 2001 due to the  uncertainty as
 to the realization of the asset.

 The provision (benefit) for income taxes  for the three years in the  period
 ended December 31, 2001 was offset by changes in the valuation reserve.  For
 the years  ended December  31, 1999  and 2000,  the benefit  which would  be
 expected for losses  incurred in each  year was offset  by increases in  the
 valuation reserve.

 At December 31, 2001,  the Company had net  operating loss carryforwards  of
 approximately $38.7 million for federal income tax purposes, which  begin to
 expire in 2002,  and research  and development tax  credit carryforwards  of
 approximately $478,000, which  begin to  expire in  2002, all  of which  are
 available to offset  federal income  taxes due in  future periods.   A  $2.6
 million net  operating  loss  carryforward expired  during  the  year  ended
 December 31, 2001.   Additionally, $87,000 in  research and development  tax
 credits  expired  in  2000.  The   Company  has  approximately  $28,000   in
 alternative minimum tax credits which do not expire.


 NOTE TEN.  CONCENTRATIONS OF CREDIT RISK

 Financial instruments that potentially expose the Company  to concentrations
 of credit  risk  consist  primarily  of  trade  accounts  receivable.    The
 Company's customers are not concentrated  in any specific geographic  region
 but are concentrated in  the health care industry.   Significant sales  were
 made to three  customers.  Owens  & Minor accounted  for 9% and  10% of  the
 Company's net sales  in 1999 and  2000, respectively.   Sales to  Mannatech,
 Inc., accounted for 41%, 38%,  and 30% of the  Company's net sales in  1999,
 2000,  and  2001,   respectively.    Accounts   receivable  from   Mannatech
 represented 21% of gross accounts receivable at December 31, 2001.  Sales to
 Medline Industries, Inc., accounted  for 35% of  the Company's sales  during
 2001.  Accounts  receivable from  Medline represented 53%  of the  Company's
 gross accounts  receivable  at December  31,  2001.   The  Company  performs
 ongoing  credit  evaluations  of  its  customers'  financial  condition  and
 establishes an allowance for doubtful accounts based on  factors surrounding
 the credit  risk  of specific  customers  and historical  trends  and  other
 information.


 NOTE ELEVEN.  NET INCOME (LOSS) PER SHARE

 Basic net  income (loss)  available to  common  shareholders per  share  was
 computed by dividing net income (loss)  available to common shareholders  by
 the weighted  average  number of  common  shares outstanding  of  9,376,000,
 9,545,000 and 9,743,000 in 1999, 2000 and 2001, respectively.

 In calculating the  diluted net  loss available to  common shareholders  per
 share for the  three years ended  2001, no  effect was given  to options  or
 warrants, because the effect of including  these securities would have  been
 antidilutive.


 NOTE TWELVE.  REPORTABLE SEGMENTS

 The Company  operates  in  two reportable  segments:  human  and  veterinary
 products sold through  its Medical  Services Division and  Caraloe, Inc.,  a
 consumer products  subsidiary,  which  sells bulk  raw  materials,  consumer
 beverages and nutritional and skin care products.

 The Company evaluates performance and allocates resources based on profit or
 loss from operations before  income taxes.  The  accounting policies of  the
 reportable segments  are the  same  as those  described  in the  Summary  of
 Significant Accounting Policies (Note Two).

 Corporate income (loss) before income taxes set forth in the following table
 includes research  and  development  expenses  which  were  related  to  the
 development of  pharmaceutical products  not associated  with the  reporting
 segments.  Assets which are  used in more than  one segment are reported  in
 the segment  where the  predominant use  occurs.   The Company's  production
 facility in Costa Rica,  which provides bulk  ingredients for all  segments,
 and total cash for the Company are included in the Corporate Assets figure.

 Reportable Segments (in thousands)

                           Medical  Caraloe,
                          Services    Inc.   Corporate      Total
 ----------------------------------------------------------------
 2000
 ----------------------------------------------------------------
 Sales to unaffiliated
   customers               $12,241  $10,862   $     -     $23,103
 Income(loss) before
   income taxes             (2,421)   2,007    (3,062)     (3,476)
 Identifiable assets        11,530    1,782     7,390      20,702
 Capital expenditures          246        -       199         445
 Depreciation and
   amortization                590        -       453       1,043
 ----------------------------------------------------------------
 2001
 ----------------------------------------------------------------
 Sales to unaffiliated
   customers               $10,400   $7,194   $     -     $17,594
 Income(loss) before
   income taxes              1,333    1,121    (2,076)        378
 Identifiable assets        12,481    1,420     7,316      21,217
 Capital expenditures            -        -     1,132       1,132
 Depreciation and
   amortization                586        -       464       1,050
 ----------------------------------------------------------------


 NOTE THIRTEEN.      RELATED PARTY TRANSACTIONS

 At December 31, 2001, the Company had a 24% interest in a  company which was
 formed in 1998 to acquire and  develop a 5,000 acre  tract of land in  Costa
 Rica to be used  for the production  of Aloe vera  L. leaves, the  Company's
 primary raw material.  The Company's  initial investment was written-off  in
 1998 and no  additional investments  have been made  or are  expected to  be
 made.  The Company is accounting for its investment on the cost  basis.  The
 Company purchases  Aloe vera  L.  leaves from  this  company at  prices  the
 Company believes are competitive with other sources.  Such purchases totaled
 $364,000, $417,000 and $450,000 in 1999, 2000 and 2001, respectively.


 NOTE FOURTEEN. UNAUDITED SELECTED QUARTERLY FINANCIAL DATA

 The unaudited selected  quarterly financial  data below  reflect the  fiscal
 years ended December 31, 2000 and 2001, respectively.


 (Amounts in thousands, except shares and per share amounts)

 --------------------------------------------------------------------------
 2000                    1st Quarter  2nd Quarter  3rd Quarter  4th Quarter
 --------------------------------------------------------------------------

  Net sales                $7,125       $5,463       $4,997        $5,518
  Gross profit              3,495        2,849        1,759         2,218
  Net loss                   (529)        (679)      (1,228)(1)    (1,040)
  Loss per share           $(0.06)      $(0.07)      $(0.13)       $(0.11)
  Weighted average
    common shares       9,427,000    9,589,000    9,614,000     9,633,000

 --------------------------------------------------------------------------
 2001                    1st Quarter  2nd Quarter  3rd Quarter  4th Quarter
 --------------------------------------------------------------------------

  Net sales                $4,657       $4,330       $4,381        $4,226
  Gross profit              2,000        1,866        2,040         1,885
  Net income                  226           60           77            15(2)
  Diluted income per
    share                   $0.02        $0.01        $0.01         $0.00
  Weighted average
    common shares       9,728,000    9,734,000    9,747,000     9,809,000


 (1)  After a charge of $223,000 for OFD as described in Note Eight.

 (2)  The fourth-quarter results benefited from a one-time  gain of $326,000,
      partially reversing  a charge taken  earlier in the  year as a  pricing
      reserve  related  to  a  strategic  sales  and  marketing  partnership.
      Fourth-quarter and full-year results benefited from a  one-time gain of
      $200,000  from adjustments  to state  tax liabilities  booked in  prior
      periods.



 Financial Statement Schedule
 Valuation and Qualifying Accounts
 (In thousands)


  Description                         Additions
                                   ----------------
                         Balance   Charged  Charged
                           at         to      to                   Balance
                        Beginning  Cost and  Other                 at End
                        of Period  Expenses Accounts  Deductions  of Period
 --------------------------------------------------------------------------
 1999
 --------------------------------------------------------------------------
 Bad debt reserve         $  922    $  107   $   -     $  725      $  304
 Inventory reserve           525         -       -         95         430
 Rebates                     404     2,058       -      2,122         340
 Reserve for ACI
   and Aloe & Herbs
   non-current notes and
   investments included
   in other assets         1,350         -       -         58       1,292
 Oregon Freeze Dry, Inc.       -     1,042     343          -         699

 --------------------------------------------------------------------------
 2000
 --------------------------------------------------------------------------
 Bad debt reserve         $  304    $  116   $   -     $  322      $   98
 Inventory reserve           430       316       -        304         441
 Rebates                     340     4,508       -      4,576         272
 Reserve for ACI
   and Aloe & Herbs
   non-current notes and
   investments included
   in other assets         1,292         -       -         27       1,265
 Oregon Freeze Dry, Inc.     699       223       -        922           -
 --------------------------------------------------------------------------
 2001
 --------------------------------------------------------------------------
 Bad debt reserve         $   98    $   55   $   -     $   53       $ 100
 Inventory reserve           441        91       -         16         516
 Rebates                     272         -       -        272           -
 Reserve for ACI
   and Aloe & Herbs
   non-current notes and
   investments included
   in other assets         1,265         -       -         45       1,220

<PAGE>



                        REPORT OF INDEPENDENT AUDITORS



 Shareholders and Board of Directors
   Carrington Laboratories, Inc.


 We have audited the accompanying  consolidated balance sheets of  Carrington
 Laboratories, Inc. and subsidiaries as of December 31, 2001 and 2000 and the
 related consolidated statements of operations, shareholders'  investment and
 cash flows for  each of the  three years  in the period  ended December  31,
 2001.  Our audits also included  the financial statement schedule listed  in
 the Index at item  14(a) for the same  periods.  These financial  statements
 and schedule  are  the  responsibility  of  the Company's  management.   Our
 responsibility is to express  an opinion on  these financial  statements and
 schedule based on our audits.

 We conducted  our audits  in accordance  with  auditing standards  generally
 accepted  in the  United States.  Those standards require  that we plan  and
 perform the audit to obtain reasonable assurance about whether the financial
 statements are free of material misstatement.  An audit  includes examining,
 on a test  basis, evidence  supporting the  amounts and  disclosures in  the
 financial statements.  An  audit  also  includes  assessing  the  accounting
 principles used and  significant estimates  made by management,  as well  as
 evaluating the overall  financial statement presentation.   We believe  that
 our audits provide a reasonable basis for our opinion.

 In our  opinion, the  consolidated financial  statements  referred to  above
 present  fairly,  in  all  material  respects,  the  consolidated  financial
 position of Carrington  Laboratories, Inc. and  subsidiaries as of  December
 31, 2001 and  2000, and  the consolidated  results of  their operations  and
 their cash flows for each  of the three years  in the period ended  December
 31, 2001 in conformity with accounting principles generally accepted  in the
 United  States.  Also,  in  our  opinion, the  related  financial  statement
 schedule, when  considered in  relation to  the  basic financial  statements
 taken as a whole, presents fairly  in all material respects the  information
 set forth therein.

                                         Ernst & Young LLP



 Dallas, Texas
 February 19, 2002

<PAGE>



                                  SIGNATURES


      Pursuant to the requirements of Section  13 or 15(d) 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.

                                    CARRINGTON LABORATORIES, INC.



 Date:  March 25, 2002              By:/s/ Carlton E. Turner
                                    Carlton E. Turner, Ph.D.,D.Sc. President

      Pursuant to the requirements  of the Securities  Exchange Act of  1934,
 this report  has been  signed by  the  following persons  on behalf  of  the
 registrant and in the capacities and on the dates indicated.




          Signatures                    Title                    Date
 -------------------------   -----------------------------   --------------

 /s/ Carlton E. Turner            President, Chief           March 25, 2002
 Carlton E. Turner, Ph.D.,      Executive Officer and
 D.Sc.                                Director
                                (principal executive
                                      officer)

 /s/ Robert W. Schnitzius      Chief Financial Officer       March 25, 2002
 Robert W. Schnitzius         (principal financial and
                                 accounting officer)

 /s/ R. Dale Bowerman                 Director               March 25, 2002
 R. Dale Bowerman

 /s/ George DeMott                    Director               March 25, 2002
 George DeMott

 /s/ Thomas J. Marquez                Director               March 25, 2002
 Thomas J. Marquez

 /s/ Selvi Vescovi                    Director               March 25, 2002
 Selvi Vescovi


<PAGE>

                         INDEX TO EXHIBITS


  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
    3.1   Restated  Articles  of  Incorporation  of   Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit  3.1 to  Carrington's  1999 Annual  Report  on
          Form 10-K).

    3.2   Statement   of  Change   of  Registered   Office   and
          Registered  Agent  of  Carrington  Laboratories,  Inc.
          (incorporated   by  reference   to  Exhibit   3.2   to
          Carrington's 1999 Annual Report on Form 10-K).

    3.3   Statement   of  Resolution   Establishing   Series   D
          Preferred  Stock  of  Carrington  Laboratories,   Inc.
          (incorporated   by  reference   to  Exhibit   3.3   to
          Carrington's 1999 Annual Report on Form 10-K).

    3.4   Bylaws of  Carrington Laboratories,  Inc., as  amended
          through  March   3,  1998   (incorporated  herein   by
          reference to Exhibit  3.8 to Carrington's 1997  Annual
          Report on Form 10-K).

    4.1   Form  of certificate  for Common  Stock of  Carrington
          Laboratories, Inc.  (incorporated herein by  reference
          to Exhibit 4.5 to Carrington's Registration  Statement
          on Form S-3  (No. 33-57360) filed with the  Securities
          and Exchange Commission on January 25, 1993).

    4.2   Rights  Agreement  dated  as  of  September  19,  1991
          between Carrington  Laboratories, Inc. and  Ameritrust
          Company   National   Association   (incorporated    by
          reference to Exhibit  4.2 to Carrington's 1999  Annual
          Report on Form 10-K).

    4.3   Amendment No. 1 to Rights Agreement dated  October 21,
          1998 (incorporated  herein by reference  to Exhibit  4
          to the  Company's Form 8-A/A Post-Effective  Amendment
          No. 1).

   10.1+  Retirement and  Consulting Agreement dated August  14,
          1997 between  Carrington Laboratories, Inc. and  David
          Shand  (incorporated herein  by reference  to  Exhibit
          4.1 to Carrington's quarterly report on Form  10-Q for
          the quarter ended September 30, 1997).


  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.2+  First   Amendment   to   Retirement   and   Consulting
          Agreement dated September 30, 1997 between  Carrington
          Laboratories, Inc.  and David  G. Shand  (incorporated
          herein  by reference  to Exhibit  4.2 to  Carrington's
          quarterly report  on Form 10-Q  for the quarter  ended
          September 30, 1997).

   10.3   Contract  Research Agreement  dated  as of  August  8,
          1991 between  Carrington Laboratories, Inc. and  Texas
          Agriculture  Experimental Station,  as agent  for  the
          Texas A&M  University System  (incorporated herein  by
          reference  to  Exhibit  10.55  to  Carrington's   1991
          Annual Report on Form 10-K).

   10.4   Lease Agreement  dated as of  August 30, 1991  between
          Carrington  Laboratories,   Inc.  and  Western   Atlas
          International,  Inc.  (incorporated  by  reference  to
          Exhibit  10.4 to  Carrington's 1999  Annual Report  on
          Form 10-K).

   10.5   First  Lease Amendment  dated April  16, 1992  between
          Carrington  laboratories,   Inc.  and  Western   Atlas
          International,  Inc.  (incorporated  by  reference  to
          Exhibit  10.5 to  Carrington's 1999  Annual Report  on
          Form 10-K).

   10.6   Second  Lease  Amendment  dated  September  23,   1993
          between  Carrington  Laboratories,  Inc.  and  Western
          Atlas International,  Inc. (incorporated by  reference
          to Exhibit 10.6 to Carrington's 1999 Annual  Report on
          Form 10-K).

   10.7   Third Lease Amendment  dated December 1, 1994  between
          Carrington  Laboratories,   Inc.  and  Western   Atlas
          International,  Inc.  (incorporated  by  reference  to
          Exhibit  10.7 to  Carrington's 1999  Annual Report  on
          Form 10-K).

   10.8   Fourth Lease Amendment  dated August 31, 1999  between
          Western  Atlas  International,  Inc.  and   Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit  10.8 to  Carrington's 1999  Annual Report  on
          Form 10-K).

  10.9 +  Employee   Stock    Purchase   Plan   of    Carrington
          Laboratories, Inc., as  amended through June 15,  1995
          (incorporated  by   reference  to   Exhibit  10.9   to
          Carrington's 1999 Annual Report on Form 10-K).


  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.10  Common  Stock  Purchase Warrant  dated  September  14,
          1993  issued by  Carrington Laboratories,  Inc. to  E.
          Don  Lovelace (incorporated  by reference  to  Exhibit
          10.10 to Carrington's  1999 Annual Report on Form  10-
          K).

   10.11  Common  Stock  Purchase Warrant  dated  September  14,
          1993,  issued  by Carrington  Laboratories,  Inc.,  to
          Jerry  L.  Lovelace  (incorporated  by  reference   to
          Exhibit 10.11  to Carrington's 1999  Annual Report  on
          Form 10-K).

   10.12  Lease Agreement dated June 15, 1994 between  DFW Nine,
          a  California  limited  partnership,  and   Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit 10.12  to Carrington's 1999  Annual Report  on
          Form 10-K).

   10.13  Lease Amendment dated  August 23, 1994 amending  Lease
          Agreement  listed as  Exhibit 10.12  (incorporated  by
          reference  to  Exhibit  10.13  to  Carrington's   1999
          Annual Report on Form 10-K).

   10.14  Production  Contract dated  February 13, 1995  between
          Carrington Laboratories,  Inc. and Oregon Freeze  Dry,
          Inc. (incorporated  by reference to  Exhibit 10.14  to
          Carrington's 1999 Annual Report on Form 10-K).

   10.15  Modification  Number One  dated February  19, 1996  to
          the  Production   Contract  dated  February 13,   1995
          between  Carrington  Laboratories,  Inc.  and   Oregon
          Freeze  Dry,   Inc.  (incorporated  by  reference   to
          Exhibit 10.15  to Carrington's 1999  Annual Report  on
          Form 10-K).

   10.16  Modification  Number Two  dated November  11, 1996  to
          the  Production   Contract  dated  February 13,   1995
          between  Carrington  Laboratories,  Inc.  and   Oregon
          Freeze  Dry,   Inc.  (incorporated  by  reference   to
          Exhibit 10.16  to Carrington's 1999  Annual Report  on
          Form 10-K).

   10.17  Modification Number  Three to the Production  Contract
          dated   February    13,   1995   between    Carrington
          Laboratories,  Inc.  and  Oregon  Freeze  Dry,  Inc.
          (incorporated herein by reference to Exhibit  10.89 to
          Carrington's 1998 Annual Report on Form 10-K).


  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.18+ 1995   Management  Compensation   Plan   (incorporated
          herein  by  reference  to  Exhibit  4.1  to  Form  S-8
          Registration  Statement No.  33-64403 filed  with  the
          Commission on November 17, 1995).

   10.19  Trademark  License  Agreement dated  August  14,  1997
          between    Caraloe,   Inc.    and   Mannatech,    Inc.
          (incorporated herein by  reference to Exhibit 10.2  to
          Carrington's  quarterly report  on Form  10-Q for  the
          quarter ended September 30, 1997).

   10.20  Supply  Agreement   dated  August  14,  1997   between
          Caraloe, Inc. and Mannatech, Inc.(incorporated  herein
          by   reference  to   Exhibit  10.3   to   Carrington's
          quarterly report  on Form 10-Q  for the quarter  ended
          September 30, 1997).

   10.21  Letter of Agreement  dated January 12, 2000  extending
          Trademark  License  Agreement  and  Supply   Agreement
          between    Caraloe,   Inc.    and   Mannatech,    Inc.
          (incorporated  by   reference  to  Exhibit  10.21   to
          Carrington's 1999 Annual Report on Form 10-K).

   10.22  Trademark License  and Product Supply Agreement  dated
          July  22, 1997  between  Caraloe, Inc.,  and  Nu  Skin
          International, Inc. (incorporated herein by  reference
          to Exhibit  10.1 to Carrington's  quarterly report  on
          Form 10-Q for the quarter ended September 30, 1997).

   10.23  Non-exclusive Sales  and Distribution Agreement  dated
          August  22,   1995  between  Innovative   Technologies
          Limited    and    Carrington    Laboratories,     Inc.
          (incorporated herein by  reference to Exhibit 10.6  to
          Carrington's Third Quarter 1995 Report on Form 10-Q).

   10.24  Supplemental Agreement dated October 16, 1995  to Non-
          exclusive  Sales and  Distribution  Agreement  between
          Innovative   Technologies   Limited   and   Carrington
          Laboratories,  Inc.(incorporated herein  by  reference
          to  Exhibit 10.7  to Carrington's  Third Quarter  1995
          Report on Form 10-Q).

   10.25  Product   Development   and   Exclusive   Distribution
          Agreement dated  November 10, 1995 between  Innovative
          Technologies  Limited  and  Carrington   Laboratories,
          Inc.(incorporated herein by reference to Exhibit  10.8
          to Carrington's Third Quarter 1995 Report on  Form 10-
          Q).

  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.26  Form of Stock  Purchase Agreement dated April 5,  1995
          between  Carrington  Laboratories,  Inc.  and  persons
          named  in  Annex I  thereto  (incorporated  herein  by
          reference to Exhibit 2.1 to Carrington's  Registration
          Statement 33-60833 on Form S-3).

   10.27  Form of Registration  Rights Agreement dated June  20,
          1995   between  Carrington   Laboratories,  Inc.   and
          persons named in Annex I thereto  (incorporated herein
          by   reference   to  Exhibit   2.2   to   Carrington's
          Registration Statement 33-60833 on Form S-3).

   10.28  Supply  and  Distribution Agreement  dated  March  22,
          1996  between Farnam  Companies, Inc.  and  Carrington
          Laboratories, Inc.  (incorporated herein by  reference
          to Exhibit  10.76 to Carrington's  1995 Annual  Report
          on Form 10-K).

   10.29  Distribution  Agreement dated  March 1,  1996  between
          Carrington   Laboratories,   Inc.   and   Ching    Hwa
          Pharmaceutical  Co.,  Ltd.  (incorporated  herein   by
          reference  to  Exhibit  10.1  to  Carrington's   First
          Quarter 1996 Report on Form 10-Q).

   10.30+ Carrington Laboratories, Inc. 1995 Stock Option  Plan,
          As  Amended and  Restated Effective  January 15,  1998
          (incorporated herein by  reference to Exhibit 10.3  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended March 31, 1998).

   10.31+ Form  of  Nonqualified  Stock  Option  Agreement  with
          Outside Director,  relating to  the Registrant's  1995
          Stock Option Plan, as amended (incorporated  herein by
          reference to  Exhibit 10.3  to Carrington's  Quarterly
          Report on  Form 10-Q  for the quarter  ended June  30,
          1998).

   10.32+ Form   of  Incentive   Stock  Option   Agreement   for
          Employees   (incorporated  herein   by  reference   to
          Exhibit  4.4  to  Carrington's  Second  Quarter   1996
          Report on Form 10-Q).

   10.33  Sales Distribution Agreement dated September 30,  1996
          between  Faulding  Pharmaceuticals  Laboratories   and
          Carrington Laboratories,  Inc.(incorporated herein  by
          reference  to  Exhibit  10.1  to  Carrington's   Third
          Quarter 1996 Report on Form 10-Q).

  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.34  Amendment Number  One to Sales Distribution  Agreement
          dated    January   12,    1998   between    Carrington
          Laboratories,  Inc.,   and  Faulding  Pharmaceuticals/
          David  Bull  Laboratories  (incorporated   herein   by
          reference to Exhibit 10.75 to Carrington's 1997 Annual
          Report on Form 10-K).

   10.35  Sales Distribution  Agreement dated  December 1,  1996
          between  Suco   International  Corp.  and   Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit 10.54  to Carrington's 1996  Annual Report  on
          Form 10-K).

   10.36  Sales Distribution  Agreement dated December 20,  1996
          between    Recordati,     S.P.A.    and     Carrington
          Laboratories,   Inc.   and   Carrington   Laboratories
          Belgium  N.V.(incorporated  by  reference  to  Exhibit
          10.55 to Carrington's  1996 Annual Report on Form  10-
          K).

   10.37  Nonexclusive  Distribution  Agreement  dated  November
          15,  1996  between  Polymedica  Industries,  Inc.  and
          Carrington   Laboratories,   Inc.   (incorporated   by
          reference  to  Exhibit  10.56  to  Carrington's   1996
          Annual Report on Form 10-K).

   10.38  Sales Distribution  Agreement dated December 24,  1996
          between    Gamida-Medequip   Ltd.    and    Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit 10.57  to Carrington's 1996  Annual Report  on
          Form 10-K).

   10.39  Sales Distribution  Agreement dated December 24,  1996
          between   Gamida   For   Life   BV   and    Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit 10.58  to Carrington's 1996  Annual Report  on
          Form 10-K).

   10.40  Sales Distribution  Agreement dated  December 4,  1996
          between   Darrow  Laboratorios   S/A  and   Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit 10.59  to Carrington's 1996  Annual Report  on
          Form 10-K).

  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.41  Independent Sales Representative Agreement dated  June
          1, 1998  between Meares Medical  Sales Associates  and
          Carrington   Laboratories,   Inc.   (incorporated   by
          reference  to  Exhibit  10.41  to  Carrington's   1999
          Annual Report on Form 10-K).

   10.42  Supply Agreement dated February 13, 1997  between Aloe
          Commodities  International,  Inc.  and  Caraloe,  Inc.
          (incorporated  by   reference  to  Exhibit  10.63   to
          Carrington's 1996 Annual Report on Form 10-K).

   10.43  Trademark  License  Agreement  dated  March  1,   1997
          between  Light  Resources  Unlimited  and   Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit 10.64  to Carrington's 1996  Annual Report  on
          Form 10-K).

   10.44  Supply  Agreement  dated  February  13,  1997  between
          Light   Resources   Unlimited   and   Caraloe,    Inc.
          (incorporated  by   reference  to  Exhibit  10.65   to
          Carrington's 1996 Annual Report on Form 10-K).

   10.45  Sales Distribution  Agreement dated December 27,  1996
          between  Penta   Farmaceutica,  S.A.  and   Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit 10.66  to Carrington's 1996  Annual Report  on
          Form 10-K).

   10.46  Sales Distribution  Agreement dated  November 1,  1995
          between Laboratories PiSA S.A. DE C.V.  and Carrington
          Laboratories,  Inc.  (incorporated  by  reference   to
          Exhibit 10.70  to Carrington's 1996  Annual Report  on
          Form 10-K).

   10.47  Sales  Distribution Agreement  dated January  1,  1998
          between Carrington  Laboratories, Inc. and  Carrington
          Laboratories  Belgium  N.V.  and  Henry  Schein   U.K.
          Holdings, Ltd.,  (incorporated herein by reference  to
          Exhibit 10.1 to Carrington's Quarterly Report  on Form
          10-Q for the quarter ended March 31, 1998).

   10.48  Sales  Distribution Agreement  dated January  5,  1998
          between Carrington  Laboratories, Inc. and  Carrington
          Laboratories    Belgium   N.V.    and    Saude    2000
          (incorporated herein by  reference to Exhibit 10.2  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended March 31, 1998).

  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.49  Sales  Distribution  Agreement dated  March  27,  1998
          between Carrington  Laboratories, Inc. and  Carrington
          Laboratories   Belgium   N.V.   and   Hemopharm   GmbH
          (incorporated herein by  reference to Exhibit 10.4  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended March 31, 1998).

   10.50  Sales  Distribution  Agreement dated  March  27,  1998
          between Carrington  Laboratories, Inc. and  Carrington
          Laboratories  Belgium N.V.  and Vincula  International
          Trade  Company (incorporated  herein by  reference  to
          Exhibit 10.5 to Carrington's Quarterly Report  on Form
          10-Q for the quarter ended March 31, 1998).

   10.51  Agency and  Sales Distribution  Agreement dated  April
          13,  1998 between  Carrington Laboratories,  Inc.  and
          Carrington  Laboratories  Belgium  N.V.  and  Egyptian
          American   Medical  Industries,   Inc.   (incorporated
          herein by  reference to Exhibit  10.1 to  Carrington's
          Quarterly Report  on Form 10-Q  for the quarter  ended
          June 30, 1998).

   10.52  Sales  Distribution  Agreement dated  April  24,  1998
          between Carrington  Laboratories, Inc. and  Carrington
          Laboratories  Belgium  N.V.  and  CSC  Pharmaceuticals
          Ltd.  Dublin  (incorporated  herein  by  reference  to
          Exhibit 10.2 to Carrington's Quarterly Report  on Form
          10-Q for the quarter ended June 30, 1998).

   10.53  Amendment Number One  dated May 27, 1999 to the  Sales
          Distribution Agreement  dated April  17, 1998  between
          Carrington   Laboratories,    Inc.   and    Carrington
          Laboratories,  Belgium, NV  and  CSC  Pharmaceuticals,
          Ltd.,  Dublin  (incorporated herein  by  reference  to
          Exhibit 10.5 to Carrington's Quarterly Report  on Form
          10-Q for the quarter ended June 30, 1999).

   10.54  Promissory  Note of  Aloe  Commodities  International,
          Inc.,dated June 17, 1998, payable to the order  of the
          Registrant  in   the  principal  amount  of   $200,000
          (incorporated herein by  reference to Exhibit 10.4  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended June 30, 1998).

   10.55  Letter  agreements   dated  September  30,  1998   and
          November    4,   1998    between   Aloe    Commodities
          International, Inc.  and the  Registrant amending  due
          date of Promissory Note dated June 17, 1998  from Aloe
          Commodities  International,  Inc.  to  the  Registrant
          (incorporated herein by  reference to Exhibit 10.2  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended September 30, 1998).

  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.56  Letter Agreement dated  February 4, 1999 between  Aloe
          Commodities  International, Inc.  and  the  Registrant
          amending due  date of Promissory  Note dated June  17,
          1998 from Aloe Commodities International, Inc.  to the
          Registrant  (incorporated   herein  by  reference   to
          Exhibit 10.98  to Carrington's 1998  Annual Report  on
          Form 10-K).

   10.57  Promissory Note  dated July  1, 1998  of Rancho  Aloe,
          (C.R.) S.A. payable to the order of the  Registrant in
          the  principal  amount  of  $186,655.00  (incorporated
          herein by  reference to Exhibit  10.1 to  Carrington's
          Quarterly Report  on Form 10-Q  for the quarter  ended
          September 30, 1998).

   10.58  Wound and  Skin Care Purchase  Agreement dated  August
          27,  1998 between  American  Association for  Homes  &
          Services for  the Aging  and Carrington  Laboratories,
          Inc.  (incorporated  herein by  reference  to  Exhibit
          10.2  to Carrington's  Quarterly Report  on Form  10-Q
          for the quarter ended September 30, 1998).

   10.59  Purchase  Agreement  dated  October  1,  1998  between
          Vencor,   Inc.  and   Carrington  Laboratories,   Inc.
          (incorporated herein by  reference to Exhibit 10.3  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended September 30, 1998).

   10.60  Supply  Agreement  dated  October  12,  1998   between
          Caraloe,  Inc.  and  One  Family,  Inc.  (incorporated
          herein by reference  to Exhibit 10.90 to  Carrington's
          1998 Annual Report on Form 10-K).

   10.61  Trademark  License Agreement  dated October  12,  1998
          between   Caraloe,  Inc.     and   One  Family,   Inc.
          (incorporated herein by reference to Exhibit  10.91 to
          Carrington's 1998 Annual Report on Form 10-K).

   10.62  Promissory Note  of Aloe &  Herbs International,  Inc.
          dated November  23, 1998 payable to  the order of  the
          Registrant  in   the  principal  amount  of   $300,000
          (incorporated herein by reference to Exhibit  10.92 to
          Carrington's 1998 Annual Report on Form 10-K).

  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.63  Supply  Agreement  dated  December  3,  1998   between
          Caraloe,   Inc.  and   Eventus   International,   Inc.
          (incorporated herein by reference to Exhibit  10.93 to
          Carrington's 1998 Annual Report on Form 10-K).

   10.64  Trademark  License Agreement  dated December  3,  1998
          between Caraloe, Inc. and Eventus International,  Inc.
          (incorporated herein by reference to Exhibit  10.94 to
          Carrington's 1998 Annual Report on Form 10-K).

   10.65  Amendment Number One dated December 3, 1998  to Supply
          Agreement   between   Caraloe,   Inc.   and    Eventus
          International, Inc. (incorporated herein by  reference
          to Exhibit  10.95 to Carrington's  1998 Annual  Report
          on Form 10-K).

   10.66  Clinical  Services Agreement  dated January  25,  1999
          between   Carrington  Laboratories,   Inc.   and   PPD
          Pharmaco, Inc.  (incorporated herein  by reference  to
          Exhibit 10.96  to Carrington's 1998  Annual Report  on
          Form 10-K).

   10.67  Common  Stock  Purchase  Warrant  dated  November  23,
          1998, issued by Aloe and Herbs International,  Inc. to
          Carrington  Laboratories, Inc.   (incorporated  herein
          by  reference to  Exhibit 10.99  to Carrington's  1998
          Annual Report on Form 10-K).

   10.68  Supply Agreement dated March 5, 1999  between Caraloe,
          Inc. and  For Your Health,  Inc. (incorporated  herein
          by   reference  to   Exhibit  10.1   to   Carrington's
          Quarterly Report  on Form 10-Q  for the quarter  ended
          March 31, 1999).

   10.69  Trademark  License  Agreement  dated  March  5,   1999
          between  Caraloe,  Inc.  and  For  Your  Health,  Inc.
          (incorporated herein by  reference to Exhibit 10.1  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended March 31, 1999).

   10.70  Letter dated February 25, 1999 from  Aloe Commodities,
          Inc. to   Carrington Laboratories, Inc.  (incorporated
          herein by  reference to Exhibit  10.1 to  Carrington's
          Quarterly Report  on Form 10-Q  for the quarter  ended
          March 31, 1999).

  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.71  Exclusive Sales  Representative Agreement dated  April
          13,   1999,   between  Caraloe,   Inc.   and   Classic
          Distributing   Company    (incorporated   herein    by
          reference to  Exhibit 10.1  to Carrington's  Quarterly
          Report on  Form 10-Q  for the quarter  ended June  30,
          1999).

   10.72  Exclusive Sales  Representative Agreement dated  April
          13, 1999, between Caraloe, Inc. and  Glenn Corporation
          (incorporated herein by  reference to Exhibit 10.1  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended June 30, 1999).

   10.73  Terms  Sheet for  Lease of  Rancho Aloe  Farm Land  to
          Sabila Industrial  dated April 20, 1999  (incorporated
          herein by  reference to Exhibit  10.1 to  Carrington's
          Quarterly Report  on Form 10-Q  for the quarter  ended
          June 30, 1999).

   10.74  Terms  Sheet  for  Maintenance  of  Sabila  Industrial
          Plants   on  Leased   Land   dated  April   20,   1999
          (incorporated herein by  reference to Exhibit 10.1  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended June 30, 1999).

   10.75  Exclusive  Sales and  Trademark Agreement  dated  June
          11,  1999,  between  Caraloe,  Inc.  and   Nutra  Vine
          (incorporated herein by  reference to Exhibit 10.1  to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended September 30, 1999).

   10.76  Lease  Agreement  dated  September  23,  1999  between
          Rancho Aloe and Sabila Industrial, S.A.  (incorporated
          herein by  reference to Exhibit  10.1 to  Carrington's
          Quarterly Report  on Form 10-Q  for the quarter  ended
          September 30, 1999).

   10.77  Letter  Agreement  dated September  29,  1999  between
          Aloe  Commodities International,  Inc. and  Carrington
          Laboratories, Inc.  (incorporated herein by  reference
          to Exhibit  10.1 to Carrington's  Quarterly Report  on
          Form 10-Q for the quarter ended September 30, 1999).

   10.78  Sales Distribution  Agreement dated October 26,  1999.
          between  Carrington   Laboratories,  Inc.  and   E-Wha
          International,  Inc.  (incorporated  by  reference  to
          Exhibit 10.78  to Carrington's 1999  Annual Report  on
          Form 10-K).

  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.79  Amendment Number  Two dated February  14, 2000 to  the
          Sales  Distribution  Agreement dated  April  17,  1998
          between Carrington  Laboratories, Inc. and  Carrington
          Laboratories,  Belgium, NV  and  CSC  Pharmaceuticals,
          Ltd.  Dublin  (incorporated by  reference  to  Exhibit
          10.79 to Carrington's  1999 Annual Report on Form  10-
          K).

   10.80  Supplier  Agreement  dated  August  6,  1999   between
          Novation,  LLC and  Carrington Laboratories,  Inc.  MS
          91022 (incorporated by  reference to Exhibit 10.80  to
          Carrington's 1999 Annual Report on Form 10-K).

   10.81  Supplier  Agreement  dated  August  6,  1999   between
          Novation,  LLC and  Carrington Laboratories,  Inc.  MS
          91032 (incorporated by  reference to Exhibit 10.81  to
          Carrington's 1999 Annual Report on Form 10-K).

   10.82  Distributor and  License Agreement  dated November  3,
          2000   between  Carrington   Laboratories,  Inc.   and
          Medline  Industries, Inc.   (Exhibits  A, B  and C  to
          this  agreement  have  been  excluded  pursuant  to  a
          request for  confidential treatment  submitted by  the
          registrant    to   the    Securities   and    Exchange
          Commission)(incorporated  by   reference  to   Exhibit
          10.82 to Carrington's  1999 Annual Report on Form  10-
          K).

   10.83  Supply  Agreement  dated  November  3,  2000   between
          Carrington Laboratories, Inc. and Medline  Industries,
          Inc.  (Exhibit  A to this agreement has been  excluded
          pursuant  to  a  request  for  confidential  treatment
          submitted  by the  registrant  to the  Securities  and
          Exchange  Commission, (incorporated  by  reference  to

   10.84  Lease  Agreement   dated  January  22,  2001   between
          Plazamerica, Inc and Carrington Laboratories, Inc.

   10.85+ Employee   Stock    Purchase   Plan   of    Carrington
          Laboratories, Inc.,  as amended through  May 17,  2001
          (incorporated  by   reference  to   Exhibit  10.1   to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended June 30, 2001).

   10.86+ 1995  Stock Option  Plan of  Carrington  Laboratories,
          Inc., as  amended and Restated  Effective January  15,
          1998  and  further   amended  through  May  17,   2001
          (incorporated  by   reference  to   Exhibit  10.2   to
          Carrington's  Quarterly Report  on Form  10-Q for  the
          quarter ended June 30, 2001).

  Exhibit                                                        Sequentially
  Number                       Exhibit                           Numbered Page
  ------  ------------------------------------------------------ -------------
   10.87+ Employee   Stock    Purchase   Plan   of    Carrington
          Laboratories, Inc.,  as amended  through November  15,
          2001 (incorporated by reference to Exhibit 10.87, filed
          on Carrington's Form 8-K on March 20, 2002).

   21.1*  Subsidiaries of Carrington.

   23.1*  Consent of Independent Auditors


 *    Filed herewith.
 +    Management contract or compensatory plan.