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

                               FORM 10-QSB

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

      For the quarterly period ended        JUNE 30, 2000        .
                                     -----------------------------


    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

           For the transition period from ________ to ________

          Commission file number          33-23693           .
                                 -----------------------------


                              ENTROPIN. INC
                              -------------
    (Exact name of small business issuer as specified in its charter)

           COLORADO            .                   84-1090424           .
-------------------------------         ---------------------------------
(State or other jurisdiction of         (IRS employer Identification No.)
incorporation or organization)


                   45926 Oasis Street. Indio. CA 92201
                   -----------------------------------
                (Address of principal executive offices)

                             (760) 775-8333
                             --------------
                       (Issuer's telephone number)

                                   N/A
                                   ---
  (Former name, former address and former fiscal year, if changed since
last report)


Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

                              Yes  x   No
                                  ---     ---

As of August 7, 2000, 9,598,326 shares of the issuer's Common Stock, $.001
par value per share were outstanding.

Transitional Small Business Disclosure Format Yes    No x
                                                 ---   ---

<PAGE>
                                 ENTROPIN, INC.





                                      INDEX


                                                                     Page No.

PART I.           FINANCIAL INFORMATION

Item 1.     Financial statements:

Balance Sheet - December 31, 1999 and June 30, 2000 (unaudited)          2

Statement of Operations - For the Three Months Ended June 30, 1999
and 2000 (unaudited)                                                     4

Statement of Operations - For the Six Months Ended June 30, 1999
and 2000 and Cumulative Amounts from Inception (August 27, 1984)
Through June 30, 2000 (unaudited)                                        5

Statement of Stockholders' Equity (Deficit) - for the Six Months
Ended June 30, 2000 (unaudited)                                          6

Statement of Cash Flows - For the Six Months Ended June 30, 1999
and 2000 and Cumulative Amounts from Inception (August 27, 1984)
Through June 30, 2000 (unaudited)                                        7

Notes to Unaudited Financial Statements                                  9

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations                                               15



PART II.                OTHER INFORMATION

   Item 1   Legal proceedings                                           18

   Item 2   Changes in securities and use of proceeds                   18

   Item 4   Submission of matters to a vote of security holders         19

   Item 6   Exhibits and reports on Form 8-K                            20

            Signatures                                                  20



<PAGE>


                                 ENTROPIN, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEET
                      December 31, 1999 and June 30, 2000
                                  (Unaudited)

                                     ASSETS

                                                        1999         2000
                                                        ----         ----
Current assets:
   Cash and cash equivalents                          $2,260,526  $ 5,510,460
   Certificates of deposit                                     -    8,542,570
   Accounts receivable - related party                         -          256
   Accrued interest receivable                                 -      143,266
   Prepaid expenses                                            -       19,343
                                                      ----------  -----------

                                                       2,260,526   14,215,895

Property and equipment, at cost:
   Leasehold improvements                                 61,437       61,437
   Office furniture and equipment                         23,855       33,740
                                                      ----------  -----------

                                                          85,292       95,177

   Less accumulated depreciation                         (23,429)     (38,941)
                                                      ----------  -----------

    Net property and equipment                            61,863       56,236

Other assets:
   Deposits                                               12,261       13,313
   Deferred stock offering costs (Note 4)                169,425            -
   Patent costs, less accumulated amortization of
    $82,019 (1999) and $94,074 (2000)                    321,150      315,800
                                                      ----------  -----------

      Total other assets                                 502,836      329,113
                                                      ----------  -----------

                                                      $2,825,225  $14,601,244
                                                      ==========  ===========

                            See accompanying notes.
                                       2

<PAGE>


                                 ENTROPIN, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEET
                      December 31, 1999 and June 30, 2000
                                  (Unaudited)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                          1999         2000
                                                          ----         ----
Current liabilities:
   Accounts payable                                   $  199,042  $   367,937
   Accounts payable - related parties                    123,763       28,750
                                                      ----------  -----------
    Total current liabilities                            322,805      396,687

Deferred royalty agreement (Note 6)                      184,071      191,215

Commitments and contingencies (Note 6)

Series A redeemable preferred stock, $.001 par
 value; 3,210,487 shares authorized, issued and
 outstanding, $1 per share redemption value            3,210,487    3,210,487

Series B redeemable convertible preferred stock,
 $.001 par value; 400,000 shares authorized, 230,500
 share (1999)and 225,500 (2000) issued and outstanding,
 $5.00 per share redemption value (Note 3)             1,093,175    1,069,462

Stockholders' equity (deficit)(Note 4):
 Preferred stock, $.001 par value; 10,000,000 shares
  authorized, Series A and B reported above                    -            -
 Common stock, $.001 par value; 50,000,000 shares
  authorized, 7,382,280 (1999) and 9,568,180 (2000)
  shares issued and outstanding                            7,382        9,568
 Additional paid-in capital                           13,866,412   27,352,513
 Deficit accumulated during the development stage    (12,640,814) (15,617,235)
 Unearned stock compensation                          (3,218,293)  (2,011,453)
                                                     -----------  -----------
    Total stockholders' equity (deficit)              (1,985,313)   9,733,393
                                                     -----------  -----------

                                                     $ 2,825,225  $14,601,244
                                                     ===========  ===========


                            See accompanying notes.
                                      3

<PAGE>


                                 ENTROPIN, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS
                For the Three Months Ended June 30, 1999 and 2000
                                  (Unaudited)


                                                          1999        2000
                                                          ----        ----
Costs and expenses:
   Research and development (Note 4)                $   376,219  $   992,252
   General and administrative (Note 4)                  955,536      915,873
   Rent-related party                                     1,200        2,400
   Depreciation and amortization                         10,090       12,397
                                                    -----------  -----------

    Operating loss                                   (1,343,045)  (1,922,922)

Other income (expense):
   Interest income                                       10,526      224,699
   Interest expense                                      (1,662)           -
                                                    -----------  -----------

    Total other income (expense)                          8,864      224,699
                                                    -----------  -----------

Net loss (Note 2)                                    (1,334,181)  (1,698,223)

Accrued dividends applicable to Series B
   preferred stock (Note 3)                             (30,688)     (27,562)
                                                    -----------  -----------

Net loss applicable to common shareholders           (1,364,869) $(1,725,785)
                                                    ===========  ===========

Basic net loss per common share (Note 5)            $      (.20) $      (.18)
                                                    ===========  ===========

Weighted average common shares
   outstanding (Note 5)                               6,713,000    9,566,000
                                                    ===========  ===========


                            See accompanying notes.
                                      4

<PAGE>


                                 ENTROPIN, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS
                For the Six Months Ended June 30, 1999 and 2000
   and for the Period from August 27, 1984 (inception) through June 30, 2000
                                  (Unaudited)

                                                                   Cumulative
                                                                 amounts from
                                            1999        2000       inception
                                            ----        ----     ------------
Costs and expenses:
   Research and development (Note 4)   $   694,331  $ 1,490,275   $ 8,087,685
   General and administrative (Note 4)   1,713,651    1,722,889     7,349,528
   Rent-related party                        1,200        4,800        23,114
   Depreciation and amortization            19,793       27,567       150,083
                                       -----------  -----------   -----------

    Operating loss                      (2,428,975)  (3,245,531)  (15,610,410)

Other income (expense):
   Interest income                          13,331      269,110       358,736
   Interest expense                         (1,662)           -      (242,811)
                                       -----------  -----------   -----------

    Total other income (expense)            11,669      269,110       115,925
                                       -----------  -----------   -----------

Net loss (Note 2)                       (2,417,306)  (2,976,421)  (15,494,485)

Accrued dividends applicable to Series
   B preferred stock (Note 3)              (61,376)     (56,375)     (231,935)
                                       -----------  -----------   -----------

Net loss applicable to common
  shareholder                          $(2,478,682) $(3,032,796) $(15,726,420)
                                       ===========  ===========  ============

Basic net loss per common share
 (Note 5)                              $      (.39) $      (.35) $      (2.88)
                                       ===========  ===========  ============

Weighted average common shares
   outstanding (Note 5)                  6,359,000    8,595,000     5,470,000
                                       ===========  ===========  ============

                            See accompanying notes.
                                      5

<PAGE>
<TABLE>


                                 ENTROPIN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   STATEMENT OF  STOCKHOLDERS'  EQUITY  (DEFICIT)
            For the Period from January 1, 2000 through June 30, 2000
                                  (Unaudited)
<CAPTION>

                                                                                           Deficit
                                                                                          accumulated
                                                               Additional    Unearned     during the
                                             Common stock       paid-in       stock       development
                                           Shares    Amount     capital    compensation      stage
                                         ---------   ------   -----------  ------------  -------------
<S>                                      <C>         <C>      <C>          <C>           <C>

Balance, December 31, 1999               7,382,280   $7,382   $13,866,412  $(3,218,293)  $(12,640,814)

   Amortization of unearned stock
    compensation (Note 4)                        -        -             -    1,326,840              -

   Repurchase of 101,681 stock warrants
    for cash (Note 4)                            -        -      (330,000)           -              -

   Issuance of common stock pursuant to
    public offering (Note 4)             2,000,000    2,000    12,484,138            -              -

   Shares of stock issued for services         900        1         3,599            -              -

   Overallotment of common stock pursuant
    to public offering (Note 4)            180,000      180     1,184,656            -              -

   Common stock issued in conversion
    of Preferred B shares                    5,000        5        23,708            -              -

   Issuance of stock options to directors        -        -       120,000     (120,000)             -

   Net loss for the six months ended
    June 30, 2000                                -        -             -            -     (2,976,421)
                                         ---------   ------   -----------  -----------   ------------

Balance, June 30, 2000                   9,568,180   $9,568   $27,352,513  $(2,011,453)  $(15,617,235)
                                         =========   ======   ===========  ===========   ============
</TABLE>


                            See accompanying notes.
                                      6

<PAGE>


                                 ENTROPIN, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT  OF CASH FLOWS
                 For the Six Months Ended June 30, 1999 and 2000
   and for the Period from August 27, 1984 (inception) through June 30, 2000
                                  (Unaudited)


                                                                    Cumulative
                                                                     amounts
                                                                       from
                                                1999       2000     inception
                                                ----       ----     ---------
Cash flows from operating activities:
  Net loss                               $(2,417,306) $(2,976,421) $(15,494,485)
  Adjustments to reconcile net loss to
   net cash used in operating activities:
    Depreciation and amortization             19,793       27,567       150,083
    IBC partner royalty agreement              7,144        7,144       191,215
    Services contributed in exchange for
     stock and stock options               1,571,627    1,330,440     6,791,414
    Services contributed in exchange for
     compensation agreements                       -            -     2,231,678
    Increase (decrease) in accounts
     payable - related party                 (71,106)     (95,013)       28,750
    Advances to related party                      -         (256)         (256)
    Increase (decrease) in accounts
     payable                                 402,129      168,895       367,937
    Increase in accrued interest                   -     (143,266)       25,873
    Other                                      1,662      (19,343)      (17,550)
                                          ----------  -----------   -----------

     Total adjustments                     1,931,249    1,276,168     9,769,144
                                          ----------  -----------   -----------

     Net cash used in operations            (486,057)  (1,700,253)   (5,725,341)

Cash flows from investing activities:
  Purchase of property and equipment (net)    (5,632)      (9,885)     (112,384)
  Patent costs                               (25,117)      (6,705)     (409,874)
  Deposits                                         -       (1,052)      (13,313)
  Certificates of deposit                          -   (8,542,570)   (8,542,570)
                                          ----------  -----------   -----------

     Net cash used in investing activities   (30,749)  (8,560,212)   (9,078,141)

Cash flows from financing activities:
  Proceeds from recapitalization                   -            -       220,100
  Deferred stock offering costs              (30,436)           -             -
  Proceeds from sale of common stock (net) 1,997,817   13,840,399    18,271,414
  Proceeds from exercise of stock options     32,000            -             -
  Proceeds from sale of preferred stock
   (net)                                           -            -     1,142,750
  Repurchase of warrants                           -     (330,000)     (330,000)
  Proceeds from stockholder loans                  -            -       809,678
  Proceeds from stockholder advances               -            -        98,873
  Repayments of stockholder advances               -            -       (98,873)
  Proceeds from convertible notes payable    200,000            -       200,000
                                          ----------  -----------   -----------

     Net cash provided by financing
      activities                           2,199,381   13,510,399    20,313,942
                                          ----------  -----------   -----------

Net increase in cash                       1,682,575    3,249,934     5,510,460

Cash and cash equivalents at beginning
 of period                                   445,333    2,260,526             -
                                          ----------  -----------   -----------
Cash and cash equivalents at end of
 period                                   $2,127,908  $ 5,510,460   $ 5,510,460
                                          ==========  ===========   ===========

                          (Continued on following page)
                            See accompanying notes.
                                      7

<PAGE>


                                 ENTROPIN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASH FLOWS
                 For the Six Months Ended June 30, 1999 and 2000
      and for the Period from August 27, 1984 (inception) to June 30, 2000
                                   (Unaudited)


                         (Continued from preceding page)

Supplemental disclosure of non-cash investing and financing activities:

   During the six months ended June 30, 2000,  the Company  issued 900 shares of
   common stock for services totaling $3,600.

   During the six months  ended June 30,  2000,  the Company  also issued  5,000
   shares of common  stock in a  conversion  from  preferred  B shares  totaling
   $23,713.



                              See accompanying notes.
                                        8


<PAGE>


                                 ENTROPIN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                     NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                  June 30, 2000



The  accompanying  financial  statements  of the Company  have been  prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions  to Form 10-QSB.  Certain notes and other
information have been condensed or omitted from the interim financial statements
presented  in  this  report.  Accordingly,  they  do  not  include  all  of  the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements.  In the opinion of management,  the financial
statements reflect all adjustments considered necessary for a fair presentation.
The results of  operations  for the six months  ended June 30, 1999 and 2000 are
not necessarily  indicative of the results to be expected for the full year. For
further  information,  refer to the financial  statements and footnotes  thereto
included  in the  Company's  annual  report on Form  10-KSB  for the year  ended
December 31, 1999 as filed with the Securities and Exchange Commission.

1. Organization and selected accounting policies

   Organization:

   Entropin,  Inc.,  a  Colorado  corporation,  was  organized  as a  California
   corporation  in  August  1984,  to  be  a  pharmaceutical   research  company
   developing   Esterom(R)  solution,  a  topically  applied  compound  for  the
   treatment of impaired range of motion associated with acute lower back sprain
   and acute  painful  shoulder.  The Company is  considered to be a development
   stage  enterprise  as more fully  defined in Statement No. 7 of the Financial
   Accounting  Standards Board.  Activities from inception  include research and
   development, seeking the U.S. Food and Drug Administration (FDA) approval for
   Esterom(R) solution, as well as fund raising.

   Concentrations of credit risk:

   Financial instruments which potentially subject the Company to concentrations
   of credit risk consist principally of cash, cash equivalents and certificates
   of  deposit.  The  Company  places  its  cash  with  high  quality  financial
   institutions.  At  times  during  the  periods,  the  balances  at  financial
   institutions may exceed FDIC limits.

   Stock-based compensation:

   The  Company  has adopted  Statement of Financial  Accounting  Standards  No.
   123, Accounting  for Stock-Based  Compensation.  Compensation costs for stock
   options is  measured as  the excess, if any, of the fair value of the options
   at date of grant over the exercise price.

                                       9
<PAGE>


                                   ENTROPIN, INC.
                           (A DEVELOPMENT STAGE COMPANY)
                      NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                   June 30, 2000



2. Income taxes

   At June 30,  2000,  the  Company  has net  operating  loss  carryforwards  of
   approximately $4,716,000 and future tax deductions of $8,273,000 which may be
   used to offset future taxable income.  The future tax deductions  result from
   utilizing the cash basis for income tax reporting purposes and unearned stock
   compensation.  The difference  between the tax loss  carryforwards and future
   tax  deductions  and the  cumulative  losses from  inception  result from the
   losses  previously  incurred  by the  Company  as an S  corporation.  The net
   operating loss  carryforwards  expire in 2018,  2019 and 2020.  Approximately
   $250,000 of the net operating loss  carryforward  is limited as to the amount
   which may be used in any one year.  At December  31, 1999 and June 30,  2000,
   total deferred tax assets and valuation allowance are as follows:

                                                   1999         2000
                                                   ----         ----

        Net operating loss carryforwards      $  596,000  $ 1,820,107
        Accrual to cash adjustments              874,000      875,000
        Unearned stock compensation              787,000    2,020,566
                                              ----------  -----------

             Total                             2,257,000    4,715,673

                                              (2,257,000)  (4,715,673)
                                             -----------  -----------

                                             $         -  $         -
                                             ===========  ===========



   A 100%  valuation  allowance  has been  established  against the deferred tax
   assets,  as utilization of the loss  carryforwards  and  realization of other
   deferred tax assets cannot be reasonably assured.

3. Redeemable preferred stock

   At the  Company's  election,  the annual  dividends on the Series B preferred
   stock were paid in shares of the  Company's  common stock valued at $5.00 per
   share at July 15, 1999.  Dividends are added to net loss in  determining  net
   loss per common share.


                                        10


<PAGE>


                                   ENTROPIN, INC.
                           (A DEVELOPMENT STAGE COMPANY)
                      NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                   June 30, 2000



4. Stockholders' equity

   Completion of public offering:

   On March 20, 2000, the Company  completed a secondary  public  offering.  The
   Company received net proceeds of  approximately  $12,500,000 (net of offering
   expenses of  approximately  $2,000,000)  from the sale of 2,000,000 shares of
   common stock and 2,000,000  redeemable  common stock purchase  warrants.  The
   warrants  are  exercisable  at $10.50 per share at any time  until  March 14,
   2005.  After March 14,  2001,  under  certain  conditions,  the  warrants are
   redeemable  at $.25 per warrant  (see Note 7). The Company also issued to the
   underwriter warrants to purchase up to 200,000 shares at an exercise price of
   $8.75 per share and to  purchase up to 200,000  warrants to purchase  200,000
   shares at $.30 per warrant. On May 1, 2000, the Company received net proceeds
   of $1,184,836 from the  overallotment  sale of 180,000 shares of common stock
   and 300,000 warrants.  The warrants carry the same terms as those sold in the
   public offering.

   Other common stock transactions:

   On March 9, 2000, the Company  entered into an agreement with an organization
   to cancel a 101,681 share stock warrant agreement issued in September 1999 in
   connection with private placements of common stock. The Company paid $330,000
   cash as consideration for cancellation of the warrant agreement.

   Stock options and warrants:

   The following is a summary of stock option activity:

                                                           Options exercisable
                              Option    Wtd.avg.            Wtd. avg.
                            price per  exercise   Number    exercise  Number of
                              share     price    of shares    price     shares

   Balance December 31,
     1999                $1.50 to $5.00 $3.42    2,616,001   $3.44    1,739,337
   Granted                  $6.00       $6.00       40,000   $6.00       10,000
   Exercised                $0.00       $0.00            -       -            -
                            -----       -----    ---------   -----    ---------

   Balance June 30,
    2000                 $1.50 to $5.00 $3.46    2,656,001   $3.46    1,749,337
                                                 =========            =========



                                        11


<PAGE>


                                   ENTROPIN, INC.
                           (A DEVELOPMENT STAGE COMPANY)
                      NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                   June 30, 2000



4. Stockholders' equity (continued)

   The  following  is  additional  information  with  respect  to those  options
   outstanding at June 30, 2000:

                                 Wtd.avg.remaining         Number      Options
    Option price per share   contractural life in years  of shares   exercisable
    ----------------------   --------------------------  ---------   -----------
              $1.50                     2.85              450,000      75,000
              $2.80                     2.55              180,001     180,001
              $3.00                     5.75              625,000     550,003
              $4.00                     3.75              901,000     901,000
              $5.00                     4.35              460,000      33,333
              $6.00                     4.75               40,000      10,000
                                                       ----------   ---------

                                                        2,656,001   1,749,337
                                                        =========   =========

   The following is a summary of stock warrant activity:

                                           Warrant price       Number
                                             per share       of shares
                                           -------------     ---------
        Balance December 31, 1999         $3.00 to $5.00      1,005,181
        Granted                           $8.75 to $10.50     2,500,000
        Repurchased                           $4.00            (101,681)
        Exercised                             $0.00                   -
                                              -----           ---------

           Balance June 30, 2000          $3.00 to $10.50     3,403,500
                                                              =========


   Unearned stock compensation:

   At June 30,  2000,  the Company had  outstanding  an  aggregate  of 6,059,501
   options and warrants of which  1,070,000  were at purchase  prices lower than
   fair value of the stock at date of grant, including the 450,000 stock options
   granted to Western Center for Clinical Studies, Inc. (see Note 6). The excess
   of the fair value of the options and warrants, using the Black-Scholes option
   pricing  model,  over the  exercise  price has been  recorded  as  additional
   paid-in  capital and unearned stock  compensation.  Unearned  compensation is
   being amortized to research and  development  and general and  administrative
   expense over the term of the related agreements, as follows:

                                          Six Months Ended          Cumulative
                                               June 30,           amounts from
                                          1999         2000         inception

        Research and development        $  353,193   $  354,612     $1,565,836
          General and administrative     1,204,391      972,228      4,207,211
                                        ----------   ----------     ----------

                                        $1,557,584   $1,326,840     $5,773,047
                                        ==========   ==========     ==========



                                        12


<PAGE>


                                   ENTROPIN, INC.
                           (A DEVELOPMENT STAGE COMPANY)
                      NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                   June 30, 2000



5. Basic and diluted net loss per share

   Basic net loss per share is based on the  weighted  average  number of shares
   outstanding during the periods.  Shares issued for nominal  consideration are
   considered  outstanding  since  inception.  Diluted  loss per share  excludes
   dilution from common stock equivalents,  as exercise of the outstanding stock
   options and warrants would have an anti-dilutive  effect.  The 10% cumulative
   dividends on Series B preferred stock have been accrued and added to net loss
   for the purpose of determining net loss and net loss per share  applicable to
   common shareholders.

6. Commitments and contingencies

   Compensation agreements:

   In 1993,  the Company  entered  into a 30 year  compensation  agreement  with
   I.B.C.  limited  partners  owning 64.28% of the I.B.C.  Limited  Partnership.
   Compensation  under the  agreement  includes a bonus payment of $96,420 to be
   paid at the time the Company is  reimbursed  by a drug  company for  expenses
   incurred for  development of the medicine,  as well as 64.28% of a decreasing
   payment rate (3% to 1% of the Company's  annual  sales) on cumulative  annual
   royalties  received by the Company.  As of June 30, 2000, no liabilities have
   been accrued with respect to this agreement.

   In a separate  agreement with certain  former I.B.C.  limited  partners,  the
   Company has agreed to pay the partners 35.72% of a decreasing  earned payment
   (3% to 1% of the Company's annual sales) until October 10, 2004. From October
   10, 2004 until  October 10, 2014,  the Company has agreed to pay the partners
   17.86% of the earned payment.  In accordance with the agreement,  the Company
   has agreed to pay these former limited partners a one-time payment of $40,000
   and a minimum  earned  payment of $3,572 per  calendar  quarter  beginning on
   December 1, 1989. These amounts become payable when the Company is reimbursed
   for expenses incurred for the development of the medicine,  or from the first
   income received by the Company from net sales of the medicine.  The quarterly
   payments are to be applied  against the earned  payment to be received by the
   limited  partners.  As of June 30,  2000,  the total  liability  accrued with
   respect to this  agreement  was  $191,215.  The Company will receive a credit
   against the earned payments of 50% of monies which are expended in connection
   with preparing,  filing, obtaining, and maintaining patents involved with the
   sold rights.

   Management agreements:

   During April 1998, the Company  entered into an agreement with Western Center
   for Clinical Studies, Inc. (WCCS), to provide assistance in taking Esterom(R)
   solution through the clinical trials and New Drug  Application(NDA)  approval
   process. The agreement was subsequently amended on July 21, 1999. The Company
   is required to pay management  fees of $880,400  through  January 5, 2001 and
   $76,400  per  quarter  commencing  January  2001  and  continuing  until  NDA
   submission.  The Company also has granted  stock  options to WCCS to purchase
   450,000 shares of Entropin common stock at $1.50 per share. WCCS subsequently
   assigned  options to purchase  16,667 shares of common stock to its employees
   and consultants. The options will expire five years from the date they become
   exercisable. The shares underlying the options are also provided with certain
   registration rights.

                                       13
<PAGE>

                                   ENTROPIN, INC.
                           (A DEVELOPMENT STAGE COMPANY)
                      NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                   June 30, 2000


6. Commitments and contingencies

   In August  1999,  the Company  entered  into an  agreement  with  Therapeutic
   Management,  Inc. to provide clinical trial  management  services and monitor
   all aspects of Esterom(R)'s Phase III clinical studies. In November 1999, the
   Company  entered  into  an  agreement  with  WCCS  to  assume  the  Company's
   obligations under the Therapeutic Management agreement.  The Company will pay
   WCCS approximately $350,000 based upon completion of certain project goals.

7. Subsequent events

   On July 14, 2000, the Company elected to pay annual  dividends of $112,750 on
   the Series B preferred  stock by issuing 22,500 shares of its $.001 par value
   common stock, valued at $5.00 per share.

   In July 2000, upon completion of enrollment in the Phase IIIA clinical trial,
   the  Company   terminated  its  agreements  with  WCCS.  The  terms  of  this
   termination  agreement include a final payment of $71,600 and the issuance of
   an option to purchase  75,000 shares of Entropin,  Inc. common stock at $1.50
   per share and an option to purchase 90,000 shares of Entropin common stock at
   $2.50 per share.  A previously  issued option to purchase  433,333  shares of
   Entropin  common  stock at $1.50  per  share  was  cancelled  as part of this
   termination  agreement.  The Company has also agreed to leave WCCS  leasehold
   improvements,  office  furniture  and equipment and a deposit with a net book
   value of $59,614 at June 30, 2000.

   In July 2000, the Company executed a letter of intent with Glenmere  Clinical
   Research  (GCR) to provide the  continuing  depth of assistance and expertise
   required  to manage  the  remaining  clinical  and  regulatory  processes  of
   preparing,   submitting,  filing  and  finalizing  approval  of  a  New  Drug
   Application  for  Esterom(R).  GCR will  replace  WCCS  during  our Phase III
   clinical trials.


                                        14






<PAGE>
                   MANAGEMENTS DISCUSSION AND ANALYSIS
            OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


OVERVIEW

We were incorporated in California in 1984 as Entropin, Inc. ("old
Entropin"), and in 1998, completed an agreement and plan of merger with
Vanden Capital Group, Inc. to exchange all of the issued and outstanding
common shares of old Entropin for 5,220,000 shares of Vanden's common
stock. We were merged into Vanden, and Vanden changed its name to
Entropin, Inc. For accounting purposes, the acquisition was treated as a
recapitalization of old Entropin based upon historical cost, with old
Entropin as the acquirer. In conjunction with the merger, Entropin, Inc.
became a Colorado corporation.

From our inception in August 1984, we have devoted resources primarily to
funding our research and development efforts. We have been unprofitable
since inception and have had no revenue from the sale of products or
other resources, and do not expect revenue for the next two years, or
until Esterom(R) solution has received FDA approval. We expect to
continue to incur losses for the foreseeable future through the
completion of our Phase III clinical trials and the New Drug Application
process.  As of June 30, 2000, our accumulated deficit was approximately
$15.6 million.

PLAN OF OPERATION

In March 2000, we raised $12.5 million through a successful secondary
offering.  In May 2000, we raised an additional $1.2 million through the
sale of the underwriter's over-allotment.  We intend to use a substantial
portion of these funds to finance part two of our Phase III clinical
trials, our New Drug Application process related to the treatment of
acute painful shoulder, and to provide funds for research and development
and working capital.  In the future, we plan to seek FDA approval to
market Esterom(R) solution for the treatment of impaired range of motion
associated with lower back pain and identify and develop other medical
applications for Esterom(R) solution, such as applications for arthritis
and other joint disorders. We intend to minimize our fixed costs by
outsourcing clinical studies, regulatory activities, manufacturing and
sales and marketing.

RESULTS OF OPERATIONS

During the six months ended June 30, 2000, Entropin incurred a net loss
of $2,976,421 compared to $2,417,306 for the six months ended June 30,
1999.  Research and development ("R&D") expenses were $1,490,275 for the
six months ended June 30, 2000, compared to $694, 331 for the six months
ended June 30, 1999.  The $795,944 increase in research and development
expenses resulted primarily from expenditures associated with our Phase
IIIA clinical trial.  This expense was partially offset by an increase in
interest income from $13,331 for the six months ended June 30,1999 to
$269,110 for the six months ended June 30, 2000.  The increase in
interest income resulted from larger cash and cash equivalent balances
during 2000 reflecting the proceeds from our successful secondary
offering in late March.  R&D and G&A for the six months ended June 30,
2000, included expenses of $354,612 and $972,228, respectively, related
to the amortization of non-cash compensation associated with stock
options issued for services rendered.

                                   15
<PAGE>
During the three months ended June 30, 2000, Entropin incurred a net loss
of $1,698,223 compared to $1,334,181 for the three months ended June 30,
1999.  The increase resulted primarily from an increase of $616,033 in
research and development expenses related to the funding of our Phase
IIIA clinical trial.  This expense was partially offset by a $214,173
increase in interest income.

LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations since inception primarily through the net
proceeds generated from the sale of our common and preferred stock, and
through loans and advances from stockholders that were subsequently
converted into equity securities. From inception through June 30, 2000,
we have received net cash proceeds from these financing activities
aggregating approximately $ 20.3 million. As of June 30, 2000, our
working capital was $13,819,208. On March 20, 2000, we completed a
secondary public offering generating net proceeds of approximately $12.5
million from the sale of 2,000,000 shares of common stock and warrants.
On May 1, 2000, we received approximately $1.2 million from the
overallotment sale of 180,000 shares of common stock and 300,000 warrants.

Our liquidity and capital needs relate primarily to working capital,
research and development of Esterom(R) solution, and other general
corporate requirements. We have not received any cash from operations
since inception. Based on our current plans, we believe the proceeds from
our secondary offering and overallotment will provide sufficient capital
resources to fund our operations through the NDA approval process.
Expectations about our long-term liquidity may prove inaccurate if
approval for Esterom(R) solution is delayed or not obtained. We will not
generate revenue from sales of Esterom  solution unless Esterom  solution
is approved by the FDA for marketing.

Net cash used in operating activities was $1,700,253 during the first six
months of 2000 compared with $486,057 during the first six months of
1999. The cash used in operations was primarily related to funding our
Phase IIIA clinical trial, expansion of research and development
activities, and establishing an administrative infrastructure.

As of June 30, 2000, our principal source of liquidity was approximately
$14.1 million in cash, cash equivalents and certificates of deposits.

In May 2000, we entered into an agreement with Quintiles, Inc., a
Contract Research Organization (CRO) to conduct statistical analysis of
the data collected during the course of our Phase IIIA clinical trial and
to prepare a written report summarizing the results of the trial.  The
cost to perform this statistical analysis and medical writing will
approximate $215,000.

In July 2000, upon completion of enrollment in our Phase IIIA clinical
trial, Entropin terminated its agreements with Western Center for
Clinical Studies (WCCS).  The termination agreement included a final
payment of $71,600 and the issuance of an option to purchase 75,000
shares of Entropin, Inc. common stock at $1.50 per share and an option to
purchase 90,000 shares of Entropin common stock at $2.50 per share.  A
previously issued option to purchase 433,333 shares of Entropin common
stock at $1.50 per share was cancelled as part of the termination
agreement.  The Company has also agreed to leave WCCS with assets which
had a net book value of $59,614 at June 30, 2000.  These assets comprise
leasehold improvements, office furniture and equipment, and a security deposit.

                                   16
<PAGE>
In July 2000, we executed a letter of intent with a CRO, Glenmere
Clinical Research, who will provide the depth of knowledge and expertise
required to manage the remaining clinical and regulatory processes of
preparing, submitting, filing and finalizing approval of a New Drug
Application for Esterom(R).

On July 15, 2000, Entropin issued 22,550 shares of common stock as
payment of the annual dividends accrued on our Series B preferred stock
in accordance with the terms of our July 1998 private placement of
245,500 shares of Series B preferred stock at $5.00 per share.  The
Series B preferred stock is designated as redeemable 10% cumulative
non-voting convertible preferred stock with $.001 par value.  Dividends
accrue at the rate of $.50 per share per annum and are to be paid
annually in arrears commencing July 15, 1998.  At Entropin's election,
annual dividends may be paid in cash and/or in shares of Entropin's
common stock valued at $5.00 per share.

Our operating expenses will increase as we proceed with part two of our
Phase III clinical trials through the New Drug Application and the
related FDA approval process.  The estimated period for which we expect
available sources of cash to be sufficient to meet our funding needs is a
forward-looking statement that involves risks and uncertainties. In the
event that our capital requirements are greater than estimated, we may
need to raise additional capital to fund our research and development
activities. Our future liquidity and capital funding requirements will
depend on numerous factors, including the timing of regulatory actions
for Esterom(R) solution, the cost and timing of sales, marketing and
manufacturing activities, the extent to which Esterom(R) solution gains
market acceptance, and the impact of competitors' products. There can be
no assurance that such additional capital will be available on terms
acceptable to us, if at all. If adequate funds are not available, we may
be forced to significantly curtail operations or to obtain funds through
entering into collaborative agreements or other arrangements that may be
on unfavorable terms. Our failure to raise capital on favorable terms
could have a material adverse effect on business, financial condition or
results of operations.









                                   17
<PAGE>
                                 PART II

                            OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

     The Company is not a party to any legal proceedings which management
believes to be material, and there are no such proceedings which are
known to be contemplated.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.

     RECENT SALES OF UNREGISTERED SECURITIES

     During the reporting period, the Registrant did not issue any
securities that were not registered under the 1933 Act.  For securities
issued prior this reporting period, such information about the sales of
unregistered securities is incorporated by reference to Item 26 of the
Registrant's Post-Effective Amendment No.1 to Form SB-2 Registration
Statement  filed on March 22, 2000 under registration No. 333-11308.


     USE OF PROCEEDS

     Pursuant to a Registration Statement, Registration No. 333-11308,
which became effective on March 14, 2000, the Registrant sold for an
aggregate market price of $14,500,000 on March 20, 2000,  2,000,000
shares of common stock at $7.00 per share, and 2,000,000 warrants to
purchase 2,000,000 shares of common stock at $0.25 per warrant.  All
offering expenses, including underwriting discounts and commissions,
finders' fees, and other underwriting expenses, are estimated to be
$2,000,000 which was paid to the underwriters.  After deduction of
offering expenses, Registrant obtained net proceeds of approximately
$12.5 million.  On May 1, 2000, the Managing Underwriter exercised its
over-allotment option, for an aggregate price of $1,335,000,  to purchase
an additional 180,000 shares of common stock at $7.00 per share, and an
additional 300,000 warrants to purchase 300,000 shares of common stock at
$0.25 per warrant.  After deduction of over-allotment expenses of
approximately $135,000, the Registrant obtained net proceeds of
approximately $1.2 million.

     Since the Secondary Ofering the net proceeds have been used as
follows:  $405,334 for General and Administrative  and Working Capital,
$919,425 for Phase III clinical trials and the research and development
required thereby, $2,318,641 is currently maintained in a money market
account for additional working capital and Phase III clinical trials, and
$10,027,575 is currently held in temporary investments pursuant to
Prospectus dated March 14, 2000.  None of the proceeds have been applied
to the New Drug Application and are not scheduled for such use until
completion of the Phase III clinical trials.   As part of the General and
Administrative Expenses, the Registrant's directors have been compensated
directly in an aggregate amount of $15,000; the Registrant's officers
have directly received $57,712; and Thomas Anderson, who owns more than
10% of the Registrant's securities, indirectly received $2,400 in the
form of rent for the Registrant's office

                                   18
<PAGE>
space which was paid to the Law Offices of Thomas Anderson.  All other
payments made to other persons or entities were direct payments.


ITEM 4.        RESULTS OF SHAREHOLDERS VOTE.

     An Annual Meeting of the shareholders of Entropin, Inc. was held in
Denver, Colorado on June 14, 2000.  The shareholders approved each of the
following actions presented below together with the results of voting;

     The shareholders approved an amendment to Registrant's Articles of
Incorporation to provide for three classes of directors, each class
consisting as nearly as possible of one-third of the Board.  One of the
three classes is to be elected in each year as follows: two "Class I
Directors" will be elected for a term expiring at the 2001 Annual
Meeting; three "Class II Directors" will be elected for a term expiring
at the 2002 Annual Meeting; and two "Class III Directors" will be elected
for a term expiring at the 2003 Annual Meeting. Initially, members of all
three classes were  elected at the June 14, 2000 Annual Meeting.   At
each annual meeting thereafter only directors of the class whose term is
expiring would be voted upon, and upon election each such director would
serve a three-year term.  5,689,162 shareholders voted for the proposal,
66,789 voted against, and 10,603 abstained.

     Seven directors were elected at the June 14, 2000 Annual Meeting and
the Board of Directors were divided into three classes with staggered
terms of office. The initial classification of the Board is as follows:
the Class I directors, Daniel L. Azarnoff, M.D. and Donald Hunter, will
serve until date of the 2001 Annual Meeting of Shareholders; the Class II
directors, Wilson Benjamin, Joseph Ianelli and James E. Wynn, Ph.D., will
serve until the date of the 2002 Annual Meeting of Shareholders; and the
Class III directors, Higgins D. Bailey, Ed.D. and Thomas G. Tachovsky,
Ph.D., will serve until the date of the 2003 Annual Meeting of
Shareholders.  8,055,244 shareholders voted for the proposal, 31,684
against, and 13,080 abstained.

     Under the third proposal, both the Compensatory Stock Plan and the
amendment to increase the  number of shares available under that plan to
500,000 shares of Common Stock were ratified by Shareholders.
Shareholder ratification of the Plan was required to allow options
granted under the Plan to be "Qualified Options."   7,119,240
shareholders voted for the proposal, 958,013 against, and 22,755
abstained.

     Finally, the shareholders ratified the selection of Causey, Demgen &
Moore, Inc. as the independent auditors of the Registrant for the year
ending December 31, 2000.  8,067,737 shareholders voted for the proposal,
17,100 against, and 15,171 abstained.



                                   19
<PAGE>
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits
          --------

          Exhibit 10.12       Termination Agreement dated as of July 10,
                              2000 by and between Entropin, Inc. and
                              Western Center for Clinical Studies, Inc.,
                              terminating that certain Agreement dated
                              April 6, 1998 by and between Entropin,
                              Inc.and the Western Center for Clinical
                              Studies, Inc. filed under like numbered
                              exhibit with Entropin, Inc.'s Current
                              Report on Form 8-K, dated April 23, 1998.

          Exhibit 27     Financial Data Schedule




     (b)  Reports on Form 8-K
          -------------------

          During the last quarter covered by this Report,  the Registrant
filed a Current Report on Form 8-K dated July 25, 2000 regarding the
resignation of Daniel Azarnoff as a member of the Board of Directors and
the appointment of Paul Maier to fill his position.  Also, a Current
Report on Form 8-K dated July 26, 2000 was filed regarding the
termination of the Agreement with Western Center for Clinical Studies,
Inc. and the letter of intent to engage Glenmere Clinical Research, Inc.
to provide assistance and expertise for the remaining clinical and
regulatory processes of preparing, submitting, filing and finalizing
approval of a New Drug Application for Esterom (R).


                               SIGNATURES

     In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                   ENTROPIN, INC.


Date:     August 14, 2000          By:/s/ HIGGINS D. BAILEY
                                      ----------------------------
                                        Higgins D. Bailey
                                        Chairman of the Board

Date:     August 14, 2000          By:/s/ PARTICIA G. KRISS
                                      ----------------------------
                                        Patricia G. Kriss
                                        Chief Financial Officer

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