10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2010

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

For the transition period from _________________ to ________________________.

Commission File Number 0-14983

NUTRITION 21, INC.

(Exact Name of Registrant as Specified in its Charter)

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

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

(914) 701-4500

(Registrant's telephone number, including Area Code)

None

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days                                                                                                                                                    Yes    x       No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months ( or for such shorter period that the registrant was required to submit and post such files).

           Yes ¨     No    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.   See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨   Accelerated filer  ¨   Non-accelerated filer  ¨   Smaller Reporting Company x

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                                                                                                                                                  Yes ¨     No    x

Indicate the number of shares outstanding of Registrant's Common Stock as of the latest practicable date.

Class	Outstanding at November 12, 2010
Common Stock, $0.005 par value per share	141,226,622 shares

NUTRITION 21, INC.

INDEX

			PAGE
PART I	FINANCIAL INFORMATION
ITEM 1	Financial Statements
	(a)	Condensed Consolidated Balance Sheets at September 30, 2010 (unaudited) and June 30, 2010	3
	(b)	Condensed Consolidated Statements of Operations for the three month periods ended September 30, 2010 and 2009 (unaudited)	5
	(c)	Condensed Consolidated Statement of Stockholders’ Deficit for the three-month period ended September 30, 2010 (unaudited)	6
	(d)	Condensed Consolidated Statements of Cash Flows for the three-month periods ended September 30, 2010 and 2009 (unaudited)	7
	(e)	Notes to Condensed Consolidated Financial Statements (unaudited)	8
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk		13
ITEM 4	Controls and Procedures		13
PART II	OTHER INFORMATION
ITEM 1	Legal Proceedings		14
ITEM 6	Exhibits		14

2

NUTRITION 21, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	September 30, 2010		June 30, 2010
	(unaudited)		(Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	1,100	$	835
Restricted cash		100		100
Accounts receivable (less allowances for doubtful accounts and returns of $1,150 and $1,231 at September 30, 2010 and June 30, 2010, respectively)		867		1,495
Other receivables		259		224
Inventories		145		173
Prepaid expenses and other current assets		115		104
Total current assets		2,586		2,931
Property and equipment, net		68		57
Patents, trademarks and other amortizable intangibles (net of accumulated amortization of $27,087 and $27,011 at September 30, 2010 and June 30, 2010, respectively)		521		588
Other assets		309		386
TOTAL ASSETS	$	3,484	$	3,962

See accompanying notes to condensed consolidated financial statements.

3

NUTRITION 21, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	September 30,  2010			June 30,  2010
	(unaudited)			(Note 1)
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
Current liabilities:
Accounts payable	$	536		$	719
Accrued expenses		986			1,321
8% Series J convertible preferred stock subject to mandatory redemption (redemption value $17,750 at September 30, 2010)		15,570			—
Total current liabilities		17,092			2,040
8% Series J convertible preferred stock subject to mandatory redemption (redemption value $17,750 at June 30, 2010)		—			15,068
Total liabilities		17,092			17,108
Commitments and contingencies
STOCKHOLDERS’ DEFICIT:
Preferred stock, $0.01 par value, authorized 5,000,000 shares, 100,000 shares designated as Series H, none issued and outstanding; 17,750 shares designated as Series J convertible preferred stock issued and outstanding at September 30, 2010 and June 30, 2010 (see liabilities above)		—			—
Common stock, $0.005 par value, authorized 500,000,000 shares; 123,617,495 shares and 96,225,520 issued and outstanding at September 30, 2010 and June 30, 2010, respectively		616			479
Additional paid-in capital		119,514			119,215
Accumulated deficit		(133,738	)		(132,840	)
Total stockholders’ deficit		(13,608	)		(13,146	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	3,484		$	3,962

See accompanying notes to condensed consolidated financial statements.

4

NUTRITION 21, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

	Three Months  Ended
	September 30,
	2010			2009
Net sales	$	1,555		$	2,216
Other revenues		66			94
TOTAL REVENUES		1,621			2,310
COSTS AND EXPENSES
Cost of revenues		517			650
General and administrative expenses		667			980
Advertising and promotion expenses		228			166
Research and development expenses		101			79
Depreciation and amortization		84			105
TOTAL COSTS AND EXPENSES		1,597			1,980
OPERATING INCOME		24			330
Interest income		—			2
Interest expense		(943	)		(1,001	)
LOSS FROM CONTINUING OPERATIONS		(919	)		(669	)
Income taxes		—			—
LOSS FROM CONTINUING OPERATIONS		(919	)		(669	)
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX		21			26
NET LOSS	$	(898	)	$	(643	)
Net loss per common share: continuing operations	$	(0.01	)	$	(0.01	)
Net income per common share: discontinued operations	$	—		$	—
Net loss per common share	$	(0.01	)	$	(0.01	)
Weighted average number of common shares – basic and diluted		123,487,706			72,455,162

See accompanying notes to condensed consolidated financial statements.

5

NUTRITION 21, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

(in thousands, except share data)

(unaudited)

	Common Stock				Additional Paid-In Capital		Accumulated Deficit			Total
	Shares		$		$		$			$
Balance at June 30, 2010		96,225,520		479		119,215		(132,840	)		(13,146	)
Issuance of common stock for dividends on Series J preferred stock		27,391,975		137		218		—			355
Stock-based compensation expense		—		—		81		—			81
Net loss for the period		—		—		—		(898	)		(898	)
Balance at September 30, 2010		123,617,495	$	616	$	119,514	$	(133,738	)	$	(13,608	)

See accompanying notes to condensed consolidated financial statements.

6

NUTRITION 21, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended September 30,
	2010			2009
Cash flows from operating activities:
Net loss	$	(898	)	$	(643	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of property and equipment		8			5
Amortization of intangibles		76			100
Accretion of preferred stock and amortization of deferred financing costs		579			517
Accretion on note payable to Iceland Health		—			12
Convertible preferred stock dividends paid in common stock charged as interest expense		355			355
Stock-based compensation expense		81			109
Changes in operating assets and liabilities net of effects of dispositions:
Accounts receivable		628			395
Other receivables		(35	)		426
Inventories		28			296
Prepaid expenses and other current assets		(11	)		203
Accounts payable		(183	)		(424	)
Accrued expenses		(335	)		(600	)
Deferred income		—			(217	)
Net cash provided by operating activities		293			534
Cash flows from investing activities:
Contingent payments for acquisitions, allocated to goodwill, patents and trademarks		—			(83	)
Purchases of property and equipment, patents and trademarks		(28	)		(3	)
Net cash used in investing activities		(28	)		(86	)
Cash flows from financing activities:
Repayments of short-term borrowings and long-term debt		—			(1,229	)
Net cash used in financing activities		—			(1,229	)
Net increase (decrease) in cash and cash equivalents		265			(781	)
Cash and cash equivalents at beginning of period		835			1,373
Cash and cash equivalents at end of period	$	1,100		$	592

See accompanying notes to condensed consolidated financial statements.

7

NUTRITION 21, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share data)

(unaudited)

Note 1 BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America.  Accordingly, the unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2010 included in the Company’s Annual Report on Form 10-K filed on September 22, 2010 (the “Form 10-K”).  The accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of the management, considered necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods.  The June 30, 2010 balance sheet has been derived from the audited consolidated financial statements included in the Form 10-K. Operating results for the three-month period ended September 30, 2010 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2011.

Our condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business and accordingly, no adjustments have been made to recorded amounts to reflect the outcome of this uncertainty.  For several years we have incurred significant losses, and have relied on financing activities to supplement cash from operations.  At September 30, 2010, we had cash and cash equivalents of $1.2 million, an increase of $0.3 million from June 30, 2010, and we had a working capital deficiency of approximately $14.5 million. We have incurred annual operating losses and, at September 30, 2010, we had an accumulated deficit of approximately $133.7 million.

In September 2011 the holders of our Series J Convertible Preferred Stock have the right to redeem the Series J Preferred Stock for approximately $17.8 million. Our continuation as a going concern is subject to our ability to generate or obtain sufficient cash to meet our obligations on a timely basis and to attain profitable operations.

Note 2 STOCK-BASED COMPENSATION

Stock-based employee compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The Company has no awards with market or performance conditions.

Stock-based compensation expense recognized in the condensed consolidated statements of operations for the three-month periods ended September 30, 2010 and 2009 are based on awards ultimately expected to vest, and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.  Pre-vesting forfeitures are estimated to be approximately 10%, based on historical experience.

The Company did not grant stock options during the three-month periods ended September 30, 2010 and 2009. 

The Company recorded $81 thousand and $0.1 million in stock-based compensation expense for stock options and restricted stock awards during the three-month periods ended September 30, 2010 and 2009, respectively.  Stock-based compensation expense is recorded in general and administrative expenses.

8

NUTRITION 21, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share data)

(unaudited)

Note 2 STOCK-BASED COMPENSATION (continued)

The following is a summary of option activity for the three-month period ended September 30, 2010:

Options	Shares (000)			Weighted-Average Exercise Price		Weighted Average Remaining Contractual Term (Yrs.)		Aggregate Intrinsic Value ($000)
Outstanding at July 1, 2010		5,995		$	0.42
Granted		—			—
Exercised		—			—
Forfeited or expired		(85	)	$	1.41
Outstanding at September 30, 2010		5,910		$	0.40		6.5	$	-
Exercisable at September 30, 2010		4,238		$	0.50		5.7	$	-

The following is a summary of restricted stock activity for the three-month period ended September 30, 2010:

Restricted Stock	Shares (000)		Weighted-Average Exercise Price		Weighted Average Remaining Contractual Term (Yrs.)		Aggregate Intrinsic Value ($000’s)
Outstanding at July 1, 2010		130	$	1.57
Granted		—		—
Exercised		—		—
Forfeited / expired or cancelled		—		—
Outstanding at September 30, 2010		130	$	1.57		—	$	—
Exercisable at September 30, 2010		130	$	157		—		—

At September 30, 2010, there was $0.2 million of unrecognized compensation costs related to nonvested options and restricted stock awards. The costs are expected to be recognized over a weighted average period of 1.2 years.

Note 3 FINANCIAL INSTRUMENTS

The fair value of cash, restricted cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates carrying amounts due to the short maturities of these instruments.

Note 4 INVENTORIES

Inventories, which consist primarily of finished goods, are carried at the lower of cost (on a first-in, first-out method) or estimated net realizable value.

9

NUTRITION 21, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share data)

(unaudited)

Note 5 LOSS PER COMMON SHARE

Diluted loss per common share for the three-month periods ended September 30, 2010 and 2009 does not reflect the total of any incremental shares related to the assumed conversion or exercise of preferred stock, stock options, and warrants (26,450,134 shares for the three-month periods ended September 30, 2010 and 2009, respectively) as the effect of such inclusion would be anti-dilutive.

Note 6 SUPPLEMENTAL CASH FLOW INFORMATION

	Three months ended
	September 30,
	2010		2009
Supplemental disclosure of cash flow information:
Cash paid for interest	$	8	$	85
Supplemental schedule of non-cash financing activities:
Issuance of common stock for dividends on Series J preferred stock	$	355	$	355

Note 7 8% SERIES J CONVERTIBLE PREFERRED STOCK

As further explained in Note 10 in the 2010 Annual Report on Form 10-K, the Company must redeem its 8% Series J convertible preferred stock at the original issue price plus accrued dividends on September 11, 2011 and, accordingly, the carrying value of the preferred stock is included in current liabilities in the condensed consolidated balance sheets.  The agreement also provides for early redemption of the preferred stock on the occurrence of certain default events.

Cumulative dividends of 8% of the stated value per share per annum may be paid in cash or common stock at the sole election of the Company.  Common stock dividends are valued at 90% of the average 20 VWAPs (daily volume average price of the Company’s common stock) immediately prior to the dividend payment date.   For the three-month period ended September 30, 2010, the Company issued 27,391,975 shares of common stock with a fair value of $0.4 million in lieu of a cash dividend.  At September 30, 2010, the outstanding Series J preferred stock was convertible into 14,599,441 shares of common stock.

Note 8 SEGMENT REPORTING

The Company operates in one segment, Ingredients.

Substantially all of the Company’s revenues are generated in the United States.

10

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

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

Forward-Looking Statements and Risk Factors

This quarterly report and the documents incorporated by reference contain forward-looking statements which are intended to fall within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Act of 1934.  Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, and “estimates” and similar expressions identify forward-looking statements.  Statements that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties.  Actual performance and results could differ materially.

We undertake no obligation to update or review any guidance or other forward-looking information, whether as a result of new information, future developments or otherwise.

Critical Accounting Policies and Estimates

The preparation of the consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses.  On an on-going basis, the Company evaluates its estimates, including those related to uncollectible accounts receivable, inventories, intangibles and other long-lived assets.  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 maintains allowances for uncollectible accounts receivable 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 carries inventories at the lower of cost or estimated net realizable value.  If actual market conditions are less favorable than those projected by management write-downs may be required.

· Property, equipment, patents, trademarks and other intangible assets owned by the Company are depreciated or amortized, over their estimated useful lives.  Useful lives are based on management’s estimates over the period that such assets will generate revenue.  Intangible assets with definite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.  Future adverse changes in market conditions or poor operating results of underlying capital investments or intangible assets could result in losses or an inability to recover the carrying value of such assets, thereby possibly requiring an impairment charge in the future.

· The Company accounts for its stock-based compensation arrangements in accordance with the provisions of ASC 718- Compensation-Stock Compensation. Stock-based employee compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The Company has no awards with market or performance conditions. The valuation provisions apply to new awards and to awards that were outstanding on the effective date and subsequently modified or cancelled.

General

On December 29, 2009, the Company sold the assets of its Branded Products Group, and the Company classified the Branded Products Group as discontinued operations.

Revenues from Ingredients are primarily derived from the sale of proprietary ingredients together with the grant of patent licenses to use the ingredients, to manufacturers of vitamin and mineral supplements. The fees for the licenses are bundled on an undifferentiated basis with the price that the Company charges for its ingredients, since licenses are not sold separately.

11

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

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

Results of Operations

Revenues

Net sales were $1.6 million for the three-month period ended September 30, 2010, compared to $2.2 million in the comparable period a year ago.  Revenues from new customers in the first quarter of fiscal year 2011 were $0.4 million lower than the comparable period last fiscal year. In addition, licensing income of $0.2 million in fiscal year 2010 did not recur this period.

Cost of revenues

Cost of revenues were $0.5 million and $0.7 million, for the three-month periods ended September 30, 2010 and 2009, respectively.  Lower expenditures for products related to shipments to new customers was the primary reason for the improvement.

Advertising and Promotion Expenses (“Advertising”)

Advertising in the three-month periods ended September 30, 2010 and 2009, respectively, were $0.2 million.

General and Administrative Expenses (“G&A”)

G&A were $0.7 million for the three month period ended September 30, 2010 compared to $1.0 million for the comparable period a year ago.  The decrease is primarily due to a reduction in legal fees ($0.1 million), insurance costs ($0.1 million) and reduction in office expenditures ($0.1 million).

Interest expense, net

Interest expense, net was $0.9 million for the three-month period ended September 30, 2010 compared to $1.0 million in the comparable period a year ago. The decrease in interest expense is due to lower interest incurred as a result of the repayment of loans outstanding to Gerber Finance, Inc. in fiscal year 2010.

Income from Discontinued Operations

For the three month period ended September 30, 2010, there were no revenues from discontinued operations and income from discontinued operations of $21 thousand compared with revenues of $2.3 million and income from discontinued operations of $26 thousand in the comparable period a year ago.

Net Loss

Net loss for the three month period ended September 30, 2010 was $0.9 million compared to a net loss of $0.6 million in the comparable period a year ago.  Lower product sales, as noted above, was the primary reason.

Liquidity and Capital Resources

Cash and cash equivalents at September 30, 2010 were $1.2 million compared to $0.9 million at June 30, 2010.

During the three-month period ended September 30, 2010, net cash of $0.3 million was provided by operating activities, compared to net cash provided by operating activities of $0.5 million in the comparable period a year ago.

During the three-month period ended September 30, 2010, net cash used in investing activities was $28 thousand compared to net cash used in investing activities of $86 thousand in the comparable period a year ago.

During the three-month period ended September 30, 2010, there was no net cash used in financing activities compared to $1.2 million in the comparable period a year ago. There was a repayment of the Company’s short-term borrowings and notes payable in the prior fiscal period which did not recur in the current period.

12

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations (concluded)

Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. For several years we have incurred significant losses, and have relied on financing activities to supplement cash from operations.  At September 30, 2010, we had cash and cash equivalents of $1.2 million, an increase of $0.3 million from June 30, 2010, and we had a working capital deficiency of approximately $14.6 million. We have incurred annual operating losses and, at September 30, 2010, we had an accumulated deficit of approximately $133.7 million.

The current economic conditions are expected to continue to negatively impact our ability to generate net income. In addition, in September 2011 the holders of our Series J Convertible Preferred Stock have the right to redeem the Series J Preferred Stock for approximately $17.8 million. Our continuation as a going concern is subject to our ability to generate or obtain sufficient cash to meet our obligations on a timely basis and to attain profitable operations.

Item 3 – Quantitative and Qualitative Disclosures about Market Risk

Not Applicable

Item 4 – Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal controls over financial reporting during the period ended September 30, 2010 which have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

13

PART II - OTHER INFORMATION

Items 1A, 2, 3, 4 and 5 and are not applicable and have been omitted.

Item 1 - Legal Proceedings

There were no material changes from the legal proceedings disclosed in Part I, Item 3 “Legal Proceedings” in our Annual Report on Form 10-K for the year ended June 30, 2010.

Item 6 - Exhibits

(a) Exhibits

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

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

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

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

14

NUTRITION 21, INC.

SIGNATURES

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

NUTRITION 21, INC.

Registrant

Date:  November 12, 2010

By:	/s/ Michael A. Zeher
	Michael A. Zeher
	President and
	Chief Executive Officer
	(Principal Executive Officer)

15

EX-31.1

EXHIBIT-31.1

CERTIFICATION OF PRESIDENT & CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I,  Michael A. Zeher, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Nutrition 21, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 12, 2010

/s/ Michael A. Zeher

Michael A. Zeher

President & Chief Executive Officer

EX-31.2

EXHIBIT-31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, Alan J. Kirschbaum, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Nutrition 21, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 12, 2010

/s/ Alan J. Kirschbaum

Alan J. Kirschbaum

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Nutrition 21, Inc., a New York corporation (the “Company”), on Form 10-Q for the quarter ended September 30, 2010, as filed with the Securities and Exchange Commission (the “Report”), Michael A. Zeher, Chief Executive Officer of the Company, does hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/     Michael A. Zeher

Michael A. Zeher

President and Chief Executive Officer

November 12, 2010

A signed original of this written statement required by Section 906 has been provided to Nutrition 21, Inc. and will be retained by Nutrition 21, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATIONS OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Nutrition 21, Inc., a New York corporation (the “Company”), on Form 10-Q for the quarter ended September 30, 2010, as filed with the Securities and Exchange Commission (the “Report”), Alan J Kirschbaum, Chief Financial Officer of the Company, does hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/     Alan J Kirschbaum

Alan J Kirschbaum

Chief Financial Officer

November 12, 2010

A signed original of this written statement required by Section 906 has been provided to Nutrition 21, Inc. and will be retained by Nutrition 21, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.