FORM 10-K


                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D. C. 20549


 (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934
                   for the fiscal year ended March 31, 1998
                                       
   (  ) 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: 0-12716


                         Novitron International, Inc.
            (Exact name of registrant as specified in its charter)


 Delaware                                                   04-2573920
(State of incorporation)                            (IRS Employer ID Number)

 One Gateway Center, Suite 411, Newton, Massachusetts         02458
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code:     (617) 527-9933


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

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01
par value


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


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


The aggregate market value of the voting Common Stock held by non-affiliates of
the  registrant was approximately $3,999,655 based on the average price of  the
Common Stock as reported by NASDAQ on June 23, 1998.

As  of  June  23, 1998, there were 1,454,420 shares of the Registrant's  Common
Stock issued and outstanding.

Documents  Incorporated by Reference: Portions of the Company's Proxy Statement
for its 1998 Annual Meeting into Part III of Form 10-K.

<PAGE>


                         Novitron International, Inc.

                          ANNUAL REPORT ON FORM 10-K
                       For the Year Ended March 31, 1998

                               Table of Contents
                                                                 Page

                                    PART I

Item 1    Business                                                 1

Item 2    Properties                                               8

Item 3    Legal Proceedings                                        9

Item 4    Submission of Matters to a Vote of Security Holders      9
                                       
                                       
                                    PART II

Item 5    Market Price for Registrant's Common Equity and
          Related Stockholder Matters                             10

Item 6    Selected Financial Data                                 11

Item 7    Management's Discussion and Analysis of Financial
          Condition and Results of Operations                     12

Item 8    Financial Statements and Supplementary Data             15

Item 9    Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure                  15

                                       
                                   PART III

Item 10   Directors and Executive Officers of the Registrant      15

Item 11   Executive Compensation                                  15

Item 12   Security Ownership of Certain Beneficial Owners
          and Management                                          15

Item 13   Certain Relationships and Related Transactions          15


                                    PART IV

Item 14   Exhibits, Financial Statement Schedules and
          Reports on Form 8-K                                     16



Signatures                                                        17

<PAGE>


PART I

Item 1.  Business

Novitron  International,  Inc. (the "Company") is a  multinational  corporation
focusing  on the development of scientific instrumentation used in medical  and
analytical  laboratories and in process monitoring in industry.  The  Company's
Dutch  subsidiary,  Vital  Scientific  NV  ("Vital  Scientific"),  designs  and
manufactures  scientific  and  clinical  laboratory  instrumentation   marketed
worldwide  through distributors and strategic partnerships which include,  Dade
Behring,  Hycor Biomedical, AVL List, and the Wiener Lab Group.  The  Company's
Australian  subsidiary,  Clinical Data (Australia) Pty.  Ltd.  ("Clinical  Data
Australia"),  distributes  diagnostic  instruments  and  assays  in  the  South
Pacific. The Company's Dutch subsidiary, NovaChem BV ("NovaChem"), develops and
markets   process   monitoring   spectrophotometers   with   applications    in
petrochemical and pharmaceutical production and in environmental monitoring.

Company History

Novitron International, Inc. was established in 1972 as Clinical Data, Inc.  to
offer  ambulatory  electrocardiographic monitoring for  clinical  and  research
applications.  In  the 1980's, through a series of strategic acquisitions,  the
Company  grew  to  over  $14 million in revenue. As the Company  believed  that
future  growth was limited, these businesses were sold or discontinued  in  the
early 1990's.

In  1984, the Company acquired a thirty-three percent (33%) equity interest  in
Vital  Scientific. From 1985 to 1991, the Company increased its equity position
in  this Dutch company to ninety-four percent (94%), and in October 1997, Vital
Scientific became a wholly owned subsidiary.

In  June  1992,  the  Company invested in NovaChem, a Dutch company  formed  to
develop  and market spectrophotometric process monitoring technology. In  March
1995, NovaChem became a wholly owned subsidiary of the Company.
In  April  1994,  to  better  reflect  the Company's  international  scope  and
diversification,  the Company's name was changed from Clinical  Data,  Inc.  to
Novitron International, Inc.

VITAL SCIENTIFIC NV

Established  in  1956 and headquartered in Spankeren/Dieren,  The  Netherlands,
Vital  Scientific is the nucleus of the Company's operations. Vital  Scientific
designs, develops, manufactures, and distributes scientific instrumentation for
medical and industrial applications.

The  subsidiary's  principal products, marketed under the "Vitalab"  tradename,
are  automated  and  semi-automated  analytical  instruments  used  in  medical
laboratories.  These include the Vitalab Selectra II and Vitalab Flexor  "walk-
away"  clinical  chemistry analyzers, and the Vitalab Viva a  dedicated  system
designed for therapeutic drug monitoring ("TDM") and for the detection of drugs
of  abuse  ("DOA").  The subsidiary recently began shipping the  Hytec-288,  an
enzyme immunoassay analyzer used in the allergy testing and in the detection of
autoimmune diseases.

<PAGE>

To develop new products, Vital Scientific maintains a research team of fourteen
professionals  augmented by contract personnel, and further  supported  by  the
staff  of  the  TNO  Product Centre, the Netherlands organization  for  applied
scientific  research. The Company has in-house expertise in the disciplines  of
mechanical   design,  electronic  engineering  and  systems  programming.   Its
mechanical prototyping and assembly operations are highly automated.

In  January  1997, Vital Scientific signed an agreement with Hycor  Biomedical,
Inc.  of  Irvine,  California for the development of  an  automated  instrument
tailored  for  use with Hycor's allergy and autoimmune diagnostic  assays.  The
collaboration  with  Hycor  Biomedical  has  resulted  in  the  HYTEC-288,   an
instrument  that  offers  the company the opportunity  to  diversify  into  new
diagnostic fields. The first production units were delivered to Hycor in March,
1998.

In  July  1997, Vital Scientific signed an agreement with Behring  Diagnostics,
now  Dade  Behring,  for  the  distribution of  a  fully-automated  instrument.
Tradenamed  the Vitalab Viva, this analyzer is dedicated specifically  for  use
with  the  Dade Behring Emitr line of diagnostic assays for TDM  and  DOA.  The
agreement,  which  covers  a  two  (2) year period,  calls  for  the  exclusive
distribution of this dedicated laboratory analyzer. Deliveries commenced in the
third quarter of fiscal 1998.

In  March 1998,Vital Scientific received FDA approval, under Section 510(k)  of
the  Food,  Drug, and Cosmetic Act, to market in the United States the  Vitalab
Viva   and   Vitalab  Selectra,  its  fully-automated,  random-access  clinical
laboratory analyzers for routine clinical chemistries, DOA testing and  TDM.  A
distribution partner is being sought.

During fiscal 1997, Vital Scientific was awarded ISO 9002 certification, and in
fiscal 1998 underwent an audit for ISO 9001 approval. Certification is expected
in the summer of  1998.

Marketing and Distribution

The  restructuring  of  E. Merck's diagnostic division,  announced  last  year,
presented a major challenge to the Company, considering Merck's position  as  a
significant  customer.  In  November 1997, the  Company  amicably  settled  all
outstanding issues with E. Merck related to the performance by each party under
a  series  of  contractual agreements. The settlement, which  included  a  cash
payment  from  E.  Merck  and  the  release of certain  indebtedness  of  Vital
Scientific,  offered the Company complete freedom to pursue new  marketing  and
distribution arrangements and the diversification of its marketing base.

During  the  past  fiscal  year, E. Merck continued to  represent  the  primary
distribution  channel  for  instruments  designed  and  manufactured  by  Vital
Scientific.  Sales  to  E. Merck, represented approximately  fifty-six  percent
(56%)  of  sales  revenue in fiscal 1998, as compared to  seventy-five  percent
(75%) of the Company's revenues during fiscal 1997.

After  the settlement with E. Merck Vital Scientific has been actively pursuing
a new distribution network for its technology base. Vital Scientific maintains,
and has during this past fiscal year, expanded its dealer network for marketing
certain  of  the company's products in Europe, the Far East, Latin America  and
China.  In  December 1997, Vital Scientific signed an agreement with  AVL  List
GmbH  of  Graz,  Austria  for  the exclusive distribution  of  certain  of  the
Company's  products in the medical markets of Eastern Europe, Scandinavia,  and
the countries of

<PAGE>

the  former Soviet Union. Privately held AVL is a leading supplier of Blood Gas
and Ion Selective Electrode technology.

In   June  1998,  Vital  Scientific  signed  an  agreement  with  the   Wiener
Laboratorios  SAIC  of Rosario, Argentina for the exclusive  distribution  for
Latin  America of a series of clinical chemistry analyzers including the  high
successful Vitalab Selectra II. Established in 1960, Wiener Lab is the leading
independent manufacturer of reagents in South America and a major marketer  of
clinical chemistry instrumentation and reagents in the region. Wiener Lab will
be   responsible   for  both  the  sales  and  service  of  Vital   Scientific
instrumentation in the territory.

Other distribution avenues are actively being sought.

Product Development

During fiscal 1998, 1997, and 1996, the Company spent approximately $1,482,000,
$1,698,000, and $1,110,000, respectively, on research and development at  Vital
Scientific.

Seven  new models of clinical laboratory analyzers have been developed  in  the
past  nine (9) years. These include the MicroLab 200, the Vitalab Eclipse,  the
Vitalab  Eclipse  Plus, the Vitalab Eclair, the Vitalab Selectra,  the  Vitalab
Selectra  II and the HYTEC-288. The top-of-the-line Vitalab Selectra  II  is  a
patient  selective, high throughput clinical chemistry analyzer, capable  of  a
wide  range  of  routine,  immunologic and esoteric  testing.  The  instrument,
designed  for use with reagent diagnostics from different sources, targets  the
hospital  and  alternative  care markets. Vital Scientific  believes  that  the
unique  robotic  features, the user-friendly interface and the  wide  range  of
applicable reagents for the Vitalab Selectra II provide its target market  with
state-of-the-art affordable "walk-away" testing capability.

The new HYTEC-288 is the latest addition to the product range. The HYTEC-288 is
a   fully  automated  Enzyme  Immuno-Assay  system  designed  for  allergy  and
autoimmune  disease testing. This "walk-away" instrument permits the processing
of  fifty  (50)  patient  samples and two hundred and eighty-eight  (288)  test
results in a single run.

Research  and  development  efforts at Vital  Scientific  are  expected  to  be
maintained  at  a  constant level during fiscal 1999. The  Company  intends  to
develop  new  products where the Company perceives a demand  and  believes  the
product   may  be  effectively  marketed.  There  is  no  assurance  that   any
developments  or  enhancements  will  be successfully  completed  or  that,  if
developed, any of the products will be successfully marketed.

Competition

In  developing  instruments for dual-label and private  label  sales  by  third
parties,  and in marketing directly to distributors, the Company competes  with
numerous  other companies to establish relationships in Europe and  the  United
States.  These  include  the Kollsman division of the Sequa  Corporation,  Wilj
International  and  many  other smaller European and  American  companies.  The
Company  believes  that it competes on its capabilities,  the  quality  of  its
products, and its ability to produce in a timely fashion.

In  the  sale of clinical chemistry analyzers, the Company experiences  intense
competition  in  the  marketplace. Worldwide there are over fifteen  companies,
many of which have substantially

<PAGE>

greater  resources than Vital Scientific. The Company competes on the basis  of
specialized  features of its technology, added value, simplicity of  operation,
high  performance-to-cost ratio, compatibility of instruments with reagents  of
various manufacturers, and strategic marketing alliances.

CLINICAL DATA (AUSTRALIA) PTY. LTD.

Clinical  Data  Australia  was  formed in July 1992  to  distribute  diagnostic
products  in  Australia, New Zealand, and the South Pacific. Most  importantly,
Clinical  Data  Australia  provides the Company with strategic  access  to  the
diagnostics  market for market research purposes. Australian medicine  provides
an ideal blend of the characteristics found in Europe and the United States and
is, therefore, an excellent site to develop and test product concepts.

To  support  these strategic marketing activities, the Company  recognized  the
opportunity  to establish a diagnostics distribution business that was  ideally
positioned to represent smaller European and U.S. companies.

In  July  1997,  Clinical  Data  Australia  signed  an  exclusive  distribution
agreement  with  the  ABX  Hematologie s.a., of Montpellier,  France,  for  the
distribution  of  a complete line of cell counters and related  reagents.  This
three  (3)  year agreement covers the sale and service of ABX's fully automated
cell counters which have an established presence in the Australian market.
In  August  1997,  Clinical Data Australia finalized an exclusive  distribution
agreement   with  AI  Analysinstrument  AB,  of  Stockholm,  Sweden   for   the
distribution  of a complete line of closed tube Erythrocyte Sedimentation  Rate
("ESR") instruments and consumables.

Clinical  Data  Australia  currently  represents  the  following  companies  in
Australia:

             Hycor Biomedical - Urinalysis systems and consumables
             E. Merck - Clinical chemistry reagents
             Nycomed Pharma - QC sera and cell biology products
             R&R Mechatronics - ESR analyzers
             Vital Scientific - Clinical chemistry analyzers
             Medical Specialties International - Hematology controls
             Sigma Diagnosticsr - Wide range of diagnostics
             AI Analysinstrument AB - Closed tube ESR products
             ABX Hematologie - Cell counters and related reagents

The  Hycor  Biomedical  line  was launched  in  1995  and  has  proven  highly
successful.  The product is the leading urinalysis system in Australia  with  a
market share of approximately 65%.

<PAGE>

NOVACHEM BV

Established in 1992, NovaChem has developed and markets the IPM-Mark II Process
Analyzer.  This  instrument employs solid-state, fiber-optic, diode-array,  and
spectroscopic  technology  and was specifically designed  for  process  control
applications.

Using  the  IPM-Mark II, NovaChem has developed a series of applications  which
include the monitoring of Claus Plant sulfur recovery; chlorine production; and
the  measurement  of sulfur dioxide, oxides of nitrogen, and ammonia  in  stack
emissions.  The  technology  has  also been  proven  effective  in  controlling
ethylene   glycol   manufacture,   and  in   monitoring   the   production   of
pharmaceuticals. NovaChem's products are production engineered and manufactured
by Vital Scientific.

Marketing and Distribution

The market for process monitoring instrumentation has evolved from a demand for
on-line,  real-time  analytical techniques similar to  those  employed  in  the
industrial laboratory. The market, international in scope, is driven by solving
specific processing application problems. The market is characterized  by  many
small  niches with specialized vendors. Success factors in this market  include
an  in-depth  knowledge  of  end-user processing, active  product  development,
international  market targeting, a reputation for stability  and  service,  and
strategic planning.

NovaChem's   technology   is   marketed   through   established   dealers   and
manufacturer's representatives representing the process monitoring industry. In
January  1997, NovaChem signed a series of agreements with Houston Atlas,  Inc.
for   the   exclusive  distribution  of  certain  petrochemical  and   refining
applications  of  the  NovaChem  proprietary  diode-array  process   monitoring
technology. Houston Atlas, is a subsidiary of Thermo Instrument Systems, Inc. a
leader in the field of process monitoring in the hydrocarbon industry.

Product Development

During  fiscal  1998  and  1997,  NovaChem  spent  approximately  $107,000  and
$124,000,  respectively,  on  research and  development.  Resources  were  also
employed  for  the  development of related sampling systems necessary  for  the
coupling of the diode-array monitor to the process line.

Competition

In  developing  and  marketing  instruments for  process  monitoring,  NovaChem
competes  with  many companies in Europe and the United States.  These  include
Ametek, Western Research, Zeiss and numerous others. The Company believes  that
it  competes on the basis of specialized features of its technology, simplicity
of operation, high performance-to-cost ratio, and quality of its products. Many
of  its  competitors,  however, have greater financial and marketing  resources
than NovaChem.

<PAGE>

OTHER BUSINESS MATTERS

Government Regulation

Where  necessary, the Company has obtained government approval  to  market  its
products  and may have to obtain prior approval of certain European  regulatory
bodies or the Food and Drug Administration ("FDA") to market products which  it
may develop. Domestically, certain of the Company's products are classified  as
medical devices under the Federal Food, Drug and Cosmetics Act. As such, if and
when  these products are offered for sale in the United States, these  products
are  subject to regulation by the FDA. The cost of obtaining such approvals may
be  high and the process lengthy, with no assurance that such approvals will be
obtained.

To  date,  neither  the  FDA nor the European medical  regulatory  bodies  have
developed  industry-wide performance standards with respect to the  safety  and
effectiveness of the products presently marketed by the Company.  Although  the
Company  intends  to  use  reasonable  efforts  to  comply  with  international
standards,  when  and  if  developed, there can be no assurance  that  all  the
Company's  products will so comply. Any failure to receive  approvals  for  the
Company's  future products, or noncompliance with any international performance
standards  promulgated in the future, could have a material adverse  effect  on
the  Company.  Furthermore,  any material change  in  the  existing  rules  and
regulations  or  any  new  regulations developed  might  adversely  affect  the
Company.

The  Company's  subsidiaries  comply with European  CE  regulations  and  Vital
Scientific is ISO 9002 approved.

The  instruments developed by NovaChem for the environmental market may now  or
in the future require certification by governmental authorities. Any failure to
receive  approvals  for such products could have a material adverse  effect  on
this investment.

Patents

The  Company  or  its subsidiaries either own or have applied for  patents  and
trademarks on certain of their products. However, the Company does not  believe
that  its  business  as  a whole is or will be materially  dependent  upon  the
protection  afforded by such patents or trademarks, and a substantial  majority
of   the  Company's  revenues  are  attributable  to  products  without  patent
protection.

Warranty and Product Liability

Warranty  expenses  during fiscal 1998 were approximately  one-quarter  percent
(0.25%) of product revenue versus one percent (1.0%) for fiscal 1997.
Vital  Scientific maintains product liability insurance in the amount of  NLG10
million   ($5   million)  for  the  international  sales  of   its   laboratory
instrumentation. The Company believes that this level of coverage is  adequate,
given  its  past sales levels and its anticipated sales levels for  the  fiscal
year  ending March 31, 1999. The Company will reevaluate the adequacy  of  this
coverage  when  and  if  its sales level substantially  increases.  No  product
liability claims have been brought against the Company to date. However,  there
can  be  no  assurance  that product liability insurance will  continue  to  be
available to the Company on acceptable terms, or that


<PAGE>

product liability claims in excess of the Company's insurance coverage, if any,
will not be successfully asserted against the Company.

Year 2000

The  Company  is  currently  in  the  process  of  evaluating  its  information
technology  infrastructure to assess its exposure to the "Year  2000"  computer
problem.  Based  upon its work to date, the Company believes that  no  critical
software systems will be impacted by this situation. Systems currently used  by
the  Company  are  either already "Year 2000" compliant or  are  scheduled  for
replacement  during  fiscal  year 1999. The Company  does  not  currently  have
information  regarding the "Year 2000" compliance status of  its  customers  or
suppliers,  and  there  can be no assurance that the  Company's  customers  and
suppliers  will  not  be  adversely  affected  by  the  "Year  2000"   problem.
Nonetheless, the Company believes that the "Year 2000" problem will not have  a
material impact on the Company's business operations or financial condition.

Production and Availability of Raw Materials

The   Company's  manufacturing  operations  require  a  variety  of   purchased
components. The Company purchases these components in sufficient quantities  to
take advantage of price discounts and currently has an adequate inventory. Most
of  the  components  are  available  from  multiple  sources  and  the  Company
anticipates that they will continue to be readily available. Certain components
and  supplies are available from single sources only. If such suppliers  should
fail   in  deliveries,  delays  in  production  could  result.  However,  these
components  and  supplies  are  generally not  manufactured  to  the  Company's
specifications,  but  are  produced for other  applications,  and  the  Company
believes that they will continue to be available in the foreseeable future.  In
addition, the Company, where appropriate, has placed scheduled blanket purchase
orders, has placed a sufficient number of such components in inventory, or  has
provided vendors with greater lead time for filling orders for such components.

Backlog

At the close of the fiscal year ended March 31, 1998, the Company had a backlog
of  approximately  $3,792,000,  as  compared  to  $1,478,000  in  1997.  It  is
anticipated that all of the existing backlog will be filled by shipments during
fiscal 1999. Deliveries are generally made within 30 days after the receipt  of
an order.

Seasonality

The  Company  does  not believe that its business has any significant  seasonal
factors.

Employees

The Company had ninety-four (94) full, part-time, and contract employees as  of
March  31,  1998.  Eighty-seven (87) of these employees are employed  by  Vital
Scientific, one (1) by NovaChem, five (5) by Clinical Data Australia,  and  one
(1) by Novitron International, Inc.


<PAGE>

Environmental matters

The  Company  does  not believe that compliance with Federal,  State  or  Local
regulations  relating to the protection of the environment  have  any  material
effect on the Company's financial or competitive position.

Significant Customers

The  loss  of  any  of the Company's major customers would have  a  significant
material adverse impact on the Company.

Industry Segments

The  information  required  by this section is specified  in  Note  14  in  the
accompanying notes to consolidated financial statements.

Executive Officers of the Registrant

Subject to the discretion of the Board of Directors, officers serve for  a  one
(1) year term expiring with the meeting of the Board of Directors following the
next  Annual Meeting of Stockholders and until their respective successors  are
elected and qualified.

     Israel M. Stein, M.D., 55, has served as Chairman of the Board since  1972
and  as President from 1972 until February 1988, and again since February 1989.
Dr. Stein is a graduate of the Albert Einstein College of Medicine, a member of
Alpha  Omega Alpha, and is a Salk Scholar of the City University of  New  York.
Before joining the Company, Dr. Stein served as Senior Assistant Surgeon at the
National Institutes of Health and as a resident at Harvard Medical School.

     Adrian  Tennyenhuis, 47, Senior Vice President of the Company is currently
also  the  Managing  Director  of  Clinical  Data  (Australia)  Pty.  Ltd.  Mr.
Tennyenhuis was formerly the Managing Director of Vital Scientific NV from 1989
to  1991.  Before  joining the Company, he held increasingly senior  sales  and
marketing positions with Behring Diagnostics.

     Emile  Hugen,  53, has been the Managing Director of Vital  Scientific  NV
since  October 1991. With over 25 years of increasing management responsibility
in   manufacturing  and  operations  at  Vital  Scientific,  Mr.  Hugen  is  an
experienced operating officer of the Company.

Item 2. Properties

The  Company leases approximately 1,000 square feet of office space in  Newton,
Massachusetts under a lease expiring in December 1999.

Vital  Scientific  leases  approximately 35,000  square  feet  in  Dieren,  The
Netherlands.  The  facility was designed specifically for the Company's  needs,
but  was financed entirely by an unrelated third party. The facility is  leased
until the year 2008 with renewal and expansion options.

NovaChem  occupies approximately 500 square feet of office space in Newton  and
in Dieren, The Netherlands under a series of short-term leases.

<PAGE>

Clinical Data Australia occupies approximately 3,000 square feet of office  and
warehousing  space  in Castle Hill, New South Wales under a lease  expiring  in
January 2000.

The  Company believes its current facilities are adequate for its planned needs
in the near future.

Item 3. Legal Proceedings
None.

Item 4. Submission of Matters to a Vote of Security Holders
None.

<PAGE>

PART II

Item  5.  Market  for  Registrant's Common Equity and Related  Security  Holder
Matters

a)  Market  information: The Company's Common Stock trades on the NASDAQ  Stock
Market under the symbol NOVI. The following table sets forth the range of  high
and  low sale prices per share of Common Stock for each quarter in fiscal  1998
and 1997 as reported by the NASDAQ Stock Market.

<TABLE>
<CAPTION> 

                                              Prices

<C>                                   <C>           <C>
Fiscal Year Ended March 31, 1998        High           Low
         First Quarter                $ 3.52        $ 1.82
         Second Quarter               $ 3.75        $ 2.16
         Third Quarter                $ 2.84        $ 1.36
         Fourth Quarter               $ 3.88        $ 1.48

Fiscal Year Ended March 31, 19971       High           Low
  
         First Quarter                $ 9.75        $ 4.69
         Second Quarter               $ 6.00        $ 2.63
         Third Quarter                $ 4.13        $ 1.69
         Fourth Quarter               $ 4.75        $ 2.63
  
<FN>
1  The prices are restated for the effects of a 1 for 3 reverse stock split  on
December 4, 1996.

</FN>
</TABLE>

b)  The  approximate number of holders of record and beneficial owners  of  the
Company's Common Stock at March 31, 1998 and March 31, 1997 were 252 and 1,175,
and 299 and 1,300, respectively.

c)  The Company presently intends to reinvest earnings, if any, for use in  its
business  and  therefore  does not expect to pay  any  cash  dividends  in  the
foreseeable future.


<PAGE>

Item 6. Selected Financial Data

The following table summarizes certain selected consolidated data and should be
read  in  conjunction  with the consolidated financial statements  and  related
notes  appearing  elsewhere  in this Form 10-K. No  cash  dividends  have  been
declared during the periods presented below.

<TABLE>
<CAPTION>
                                      Fiscal Year Ended March 31
                              (In thousands, except per share amounts)

                             1998      1997     1996a     1995a     1994a
<S>                       <C>       <C>       <C>       <C>       <C>
Income Statement Data                                         

Revenues                  $ 11,802  $ 13,845  $ 17,908  $ 16,818  $ 11,920
                                                                
Gross profit              $  3,277  $  3,713  $  5,002  $  5,220  $  3,602
                                                                
Net income (loss)         $    104  $   (583) $ (1,506) $   (228) $ (1,121)
                                                                
Basic and diluted                                               
   net income (loss) per
   share                  $    .08  $   (.44)  $ (1.14)  $  (.17)  $  (.85)
                                                                
Weighted average common                                         
  shares outstanding         1,323     1,322     1,322     1,327     1,322

<FN>
a  Per share amounts have been retroactively adjusted to reflect
the 1:3 reverse stock split on December 4, 1996.
</FN>

Balance Sheet Data                                           

Working Capital             $ 3,099   $ 4,206   $  5,277   $  7,334   $ 3,214
                               
Total Assets                $ 9,405   $ 8,568   $ 12,294   $ 15,075  $ 12,354

Long-Term Debt Obligations  $    30   $    41   $     54   $    98    $   104

Stockholders' Investment    $ 4,641   $ 4,973   $  6,192   $ 7,981    $ 7,040

</TABLE>

<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Liquidity and Capital ResourcesThe Company generated approximately $226,000  of
cash  from operations during the fiscal year ended March 31, 1998. The increase
in  funds  generated  comes from the increase in accounts payable  and  accrued
expenses  offset by an increase in the level of inventories and a  decrease  in
deferred  taxes. During fiscal year 1998, approximately $626,000  of  cash  was
used  by  the Company in its investing activities, principally the purchase  of
equipment  and the buyout of the minority shareholder at Vital Scientific.  The
sale  of  certain  assets also provided funds for these  investing  activities.
Financing activities were immaterial during the year ended March 31, 1998.

In  April 1998, the Company entered a new relationship with a major Dutch bank,
which provides for a 4,000,000 Dutch Guilder (approximately $1,920,000) line of
credit.  Interest  on  this facility is set at 1.25% above  the  base  rate  as
reported  by  the Netherlands Central Bank, presently 3.75%.  Trade receivables
and  inventory of Vital Scientific are provided as security for this  facility.
The line continues as long as certain capital covenants are met.

The  Company's  sources  of cash include cash balances and  the  aforementioned
4,000,000 Dutch Guilder line of credit from a Dutch bank. The Company  believes
that  available  funds will provide it with sufficient working capital  through
fiscal year 1999.

Results of Operations

Fiscal Year Ended March 31, 1998 Compared to Fiscal Year Ended March 31, 1997

Consolidated revenues for fiscal year 1998 were $11,802,000 versus  $13,845,000
for  fiscal  year  1997,  a decrease of approximately  14.8%.  The  decline  is
principally  due  to  the 14.8% strengthening of the U.S.  dollar  against  the
Company's primary functional currency, the Dutch Guilder.

The  gross margin improved from 26.8% to 27.8% from fiscal year 1997 to  fiscal
year 1998.  The increase reflects improved material costs, cost containment and
a change in the product mix.

Sales  and  marketing expenses decreased $424,000 or 36.8 %  from  fiscal  year
1997.  A reduction in expenses was responsible for 27.4% of the decline and the
weakening of the Dutch Guilder against the U.S. dollar accounted for the  rest.
The  decrease  in  expenses  resulted  from  cost  containment,  reduced  sales
commissions and reduced technical service expenses.

Research  and development expenses, as shown on the 1998 consolidated statement
of  operations, increased $58,000 or 4.6% from fiscal year 1997.  During fiscal
years  1998  and 1997, the Company spent an additional $242,000  and  $502,000,
respectively,  in  research  and development which were  capitalized  onto  the
consolidated  balance sheet pursuant to the precepts of Statement of  Financial
Accounting  Standards  No.  86  (see Note l(n) in  the  Notes  to  Consolidated
Financial  Statements).   When  expressed in the Company's  primary  functional
currency,  the  Dutch  Guilder, the spending on research  and  development  was
essentially  constant  for  fiscal years 1997 and 1998.  The  decrease  in  the
spending,  when  expressed  in  U.S. dollars, is  wholly  attributable  to  the
strengthening of the U.S. dollar against the Dutch Guilder.

<PAGE>

General  and  administrative expense in fiscal year 1998 decreased $169,000  or
8.7%  from fiscal year 1997.  The expense increased 4.7% when expressed in  the
Company's  functional currency; the weakening of the Dutch Guilder against  the
U.S.  dollar caused the decrease as reported. The increased costs are primarily
attributable to employee recruitment expenses, temporary contract personnel and
one-time consulting expenses.

Interest  expense  increased  primarily from expenses  related  to  the  credit
financing grant received by Vital Scientific from the Dutch government for  new
product  development.   The grant is repaid from product  sales  with  interest
accruing on the unpaid balance. Shipments of the new product commenced  in  the
fourth quarter of fiscal year 1998.

Interest  income  increased from invested funds. Other income and  expense,  as
illustrated  in  Note 11 in the Notes to Consolidated Financial Statements,  is
largely comprised of the gain from the settlement with E. Merck and the gain on
the  sale  of certain assets at Vital Scientific. The remainder of the  balance
shows  the  effect  of foreign currency transaction gains  and  losses  on  the
results of operations.

As  noted  above, on October 21, 1997, Vital Scientific became a  wholly  owned
subsidiary of the Company.  The minority interest on the consolidated statement
of  operations  reflects  the 6% of Vital Scientific's  operations  held  by  a
minority shareholder until October 21, 1997.

The  effect  of  foreign  currency  transaction  exchange  on  the  results  of
operations  is  included in other income (expense) and is not material  to  the
financial   statements.  (See  Note  11  in  Notes  to  Consolidated  Financial
Statements.) Any impact on the Company's liquidity is largely dependent on  the
exchange  rates  in  effect  at  the  time the  Company's  predominant  foreign
functional  currency,  the  Dutch Guilder, is  translated  into  U.S.  dollars.
Approximately $191,000 of the March 31, 1998 balance of $1,230,000 of cash  and
cash equivalents is denominated in U.S. dollars. The effect of translation into
U.S.  dollars is reflected as a separate component of stockholders'  investment
on  the  balance sheet. The cumulative translation adjustment in  stockholders'
investment  is approximately three percent (3 %) of total assets on  the  March
31, 1998 consolidated balance sheet.  The effects of currency exchange rates on
future  quarterly or fiscal periods on the results of operations are  difficult
to estimate.

There  are  no formal hedging procedures employed by the Company.  The  primary
risk is to monetary assets and liabilities denominated in currencies other than
the  U.S.  dollar.   Approximately $7.57 million of $7.74  million  of  current
assets reside in the Company's foreign subsidiaries.

Fiscal Year Ended March 31, 1997 Compared to Fiscal Year Ended March 31, 1996

Consolidated revenues for fiscal year 1997 were $13,845,000 versus  $17,908,000
for  fiscal year 1996, a decrease of approximately twenty-three percent  (23%).
The decline is principally due to the default of a major customer, E. Merck, on
a  series of agreements coupled with an eight percent (8%) strengthening of the
Company's  primary  functional currency, the Dutch Guilder,  against  the  U.S.
dollar.

The gross margin decreased from 28% for fiscal year 1996 to 27% for fiscal year
1997  primarily because of a reduced absorption rate of manufacturing  overhead
expenses.  In addition, there was continued pricing pressure from a competitive
market at Vital Scientific.

<PAGE>

Sales  and  marketing expenses decreased by $220,000, or sixteen percent  (16%)
from  fiscal year 1996. A reduction in expenditures was responsible  for  eight
percent  (8%)  of  the  decline while the strengthening of  the  Dutch  Guilder
contributed  to  the  remainder of the decreased expenses  between  years.  The
reduction in expense resulted principally from decreased commissions on  export
sales  at  Clinical  Data (Australia) and a decrease in the sales  expenses  at
NovaChem BV.

Research  and development charges, as shown on the income statement,  increased
$25,000 or two percent (2%) from fiscal year 1996. During fiscal year 1997, the
Company  also  spent  an  additional $502,000, which  was  capitalized  on  the
consolidated  balance sheet pursuant to the precepts of Statement of  Financial
Accounting  Standards  No.  86  (see Note 1(n) in  the  Notes  to  Consolidated
Financial Statements).

General and administrative expenses decreased $336,700 or approximately fifteen
percent  (15%)  from the similar period in fiscal year 1996. The reduction  was
the  result of ongoing cost containment procedures implemented by the  Company,
including  decreased  use  of outside legal expense,  coupled  with  the  eight
percent (8%) strengthening of the Dutch Guilder against the U.S. dollar.

Interest expense decreased for the annual period comparatives because  of  less
reliance  on  the  line  of  credit than in the  prior  year.  Correspondingly,
interest  income declined as well because there were fewer funds available  for
investment.  Other  income  and expense was basically  the  effect  of  foreign
currency transaction gains and losses on the results of operations.

For  fiscal 1997 and 1996, minority interest is attributable to the six percent
(6%) of Vital Scientific not held by the Company.

The  effect  of  foreign  currency  transaction  exchange  on  the  results  of
operations  is  included in other income (expense) and is not material  to  the
financial  statements.  (See  Note 11 in the Notes  to  Consolidated  Financial
Statements.) Any impact on the Company's liquidity is largely dependent on  the
exchange  rates  in  effect  at  the time the  predominant  foreign  functional
currency,  the  Dutch  Guilder, is translated into U.S. dollars.  Approximately
$354,000  of the March 31, 1997 balance of $1,734,000 of cash, cash equivalents
and  marketable  securities  is denominated in  U.S.  dollars.  The  effect  of
translation  into  U.S.  dollars  is  reflected  as  a  separate  component  of
stockholders'  investment  on  the balance sheet.  The  cumulative  translation
exchange  adjustment in stockholders' investment is approximately  two  percent
(2%)  of  total  assets on the March 31, 1997 consolidated balance  sheet.  The
effects of currency exchange rates on future quarterly or fiscal periods on the
results of operations are difficult to estimate.

There  are  no formal hedging procedures employed by the Company.  The  primary
risk is to monetary assets and liabilities denominated in currencies other than
the  U.S. dollar. Approximately $7.0 million of $7.2 million of current  assets
reside in the Company's foreign subsidiaries.

<PAGE>

Item 8. Financial Statements and Supplementary Data

See  Index to the Company's Financial Statements filed as part of this Form 10-
K.

Item  9.  Changes  in  and  Disagreements with Accountants  on  Accounting  and
Financial Disclosure

None.



PART III

Item 10. Directors and Executive Officers of the Registrant

The  information required by this item is contained in part under  the  caption
"Executive  Officers of the Registrant" in Part I hereof and the  remainder  is
incorporated  herein  by  reference to the table appearing  under  the  caption
"Election  of  Directors" in the Company's definitive 1998 Proxy Statement  for
its Annual Meeting of Stockholders to be held on September 15, 1998.

Item 11. Executive Compensation

The  information required by this item is incorporated herein by  reference  to
the  section  entitled "Compensation of Executive Officers"  in  the  Company's
definitive  1998 Proxy Statement for its Annual Meeting of Stockholders  to  be
held on September 15, 1998.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The  information required by this item is incorporated herein by  reference  to
the tables appearing under the captions "Principal and Management Stockholders"
in  the  Company's  definitive 1998 Proxy Statement for its Annual  Meeting  of
Stockholders to be held on September 15, 1998.

Item 13. Certain Relationships and Related Transactions

The  information required by this item is incorporated herein by  reference  to
the  section entitled "Certain Transactions and Relationships" in the Company's
definitive  1998 Proxy Statement for its Annual Meeting of Stockholders  to  be
held on September 15, 1998.


<PAGE>

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
      (a)  Documents filed as part of this Form 10-K
          1. Financial Statements. The Financial Statements listed in the Index
          to  Consolidated Financial Statements are filed as part of this  Form
          10-K.

          2.  Financial Statement Schedules.  The Financial Statement Schedules
          listed in the Index to Consolidated Financial Statements are filed as
          part of this Form 10-K.

          3.  Exhibits.  The exhibits which are filed with this Report or which
          are  incorporated herein by reference are listed in the Exhibit Index
          filed as part of this Form 10-K.

       (b)  Reports on Form 8-K
          Report  on Form 8-K filed during the fourth quarter ended March  31,
1995.



<PAGE>

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.

          NOVITRON INTERNATIONAL, INC.




                                        Israel M. Stein, M.D.
                                        Israel M. Stein, M.D.
Dated:  June 26, 1998                   Chairman of the Board



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




Date:  June 26, 1998                    Israel M. Stein, M.D.
                                        Israel M. Stein, M.D.
                                        Chairman of the Board
                                        Principal Executive Officer




Date:  June 26, 1998                    Arthur B. Malman
                                        Arthur B. Malman
                                        Director




Date:  June 26, 1998                    Gordon Baty, Ph.D.
                                        Gordon Baty, Ph.D.
                                        Director


<PAGE>

                 Novitron International, Inc. AND SUBSIDIARIES


                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Consolidated Financial Statements                           Page

Report of Independent Public Accountants                     19

Consolidated Balance Sheets at March 31, 1998 and 1997       20

Consolidated Statements of Operations for the Years Ended
March 31, 1998, 1997 and 1996                                22

Consolidated Statements of Stockholders' Investment for the
Years Ended March 31, 1998, 1997 and 1996                    23

Consolidated Statements of Cash Flows for the Years Ended
March 31, 1998, 1997 and 1996                                24

Notes to Consolidated Financial Statements                   26


Consolidated Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts              40

                                       
                                       
                                       
<PAGE>
                                       
                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                                       
To Novitron International, Inc.:

We  have  audited  the  accompanying consolidated balance  sheets  of  NOVITRON
INTERNATIONAL, INC. (a Delaware corporation) and subsidiaries as of  March  31,
1998   and  1997,  and  the  related  consolidated  statements  of  operations,
stockholders'  investment and cash flows for each of the  three  years  in  the
period  ended March 31, 1998. These financial statements are the responsibility
of  the  Company's management. Our responsibility is to express an  opinion  on
these financial statements based on our audits.

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

In  our opinion, the financial statements referred to above present fairly,  in
all  material respects, the financial position of Novitron International,  Inc.
and  subsidiaries  as  of March 31, 1998 and 1997, and  the  results  of  their
operations and their cash flows for each of the three years in the period ended
March 31, 1998, in conformity with generally accepted accounting principles.

Our  audits  were  made  for the purpose of forming an  opinion  on  the  basic
consolidated financial statements taken as a whole. The schedule listed in  the
index  to  the consolidated financial statements is presented for  purposes  of
complying with the Securities and Exchange Commission's rules and is  not  part
of  the  basic  financial statements. The schedule has been  subjected  to  the
auditing  procedures  applied in the audits of the basic  financial  statements
and,  in  our  opinion, fairly states, in all material respects, the  financial
data  required  to  be  set forth therein in relation to  the  basic  financial
statements taken as a whole.

                                                            ARTHUR ANDERSEN LLP

Boston, Massachusetts
June 10, 1998






<PAGE>

<TABLE>
                          CONSOLIDATED BALANCE SHEETS
                                       
                            MARCH 31, 1998 AND 1997
                                       
ASSETS                                                   
<CAPTION>                                                         
                                                1 9 9 8                1 9 9 7
<S>                                            <C>                 <C>
CURRENT ASSETS:                                             
  Cash and cash equivalents                    $ 1,229,918         $ 1,634,270
  Marketable securities                                  -              99,472
  Accounts receivable, less                                                   
    reserves of $49,000 and $102,000                                          
    in 1998 and 1997, respectively               2,412,725           2,546,221
  Inventories                                    3,719,698           2,526,389
  Prepaid expenses                                 347,118             280,915
  Other current assets                              28,971              83,257
       Total current assets                      7,738,430           7,170,524
                                                                              
EQUIPMENT, at cost:                                                           
  Manufacturing and computer equipment           2,010,683           1,896,433
  Furniture and fixtures                           386,090             403,882
  Leasehold improvements                           247,868             232,237
  Vehicles                                          65,787             101,818
                                                 2,710,428           2,634,370
  Less: Accumulated depreciation                                              
    and amortization                             1,944,063           2,053,108
                                                   766,365             581,262
OTHER ASSETS, net                                  899,929             816,047
                                               $ 9,404,724         $ 8,567,833



<FN>                                       
The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                       
</FN>
</TABLE>

<PAGE>
<TABLE>
                          CONSOLIDATED BALANCE SHEETS
                                       
                            MARCH 31, 1998 AND 1997
                                       
                                  (Continued)
                                       
                                       

LIABILITIES AND STOCKHOLDERS' INVESTMENT
<CAPTION>                                               
                                                     1 9 9 8             1 9 9 7
<S>                                             <C>                 <C>     
CURRENT LIABILITIES:                                                          
    Short-term notes payable and current                                        
      portion of long-term debt                 $     52,113        $     54,375
    Accounts payable                               2,598,755           1,464,128
    Accrued expenses                               1,884,036           1,219,551
    Customer advances                                      -             193,572
    Accrued income taxes                             105,010              33,287
          Total current liabilities                4,639,914           2,964,913
  LONG - TERM DEBT, net of current                    30,028              41,029
  portion
  DEFERRED TAXES                                      93,844             347,993
  MINORITY INTEREST                                        -             240,830
                                                                                
  COMMITMENTS AND CONTINGENCIES:                                                
    (Note 6)                                                                    
                                                                                
  STOCKHOLDERS' INVESTMENT:                                                     
    Preferred stock, $.01 par value,                                            
     Authorized: 1,000,000 shares                                               
     Issued and outstanding: none                          -                   -
    Common stock, $.01 par value,                                               
     Authorized: 6,000,000 shares                                               
     Issued and outstanding: 1,454,211                                          
      and 1,322,005 in 1998 and 1997,                                      
      respectively (Note 2)                           14,542              13,220
    Capital in excess of par value                 4,881,068           4,882,390
    Cumulative translation adjustment              (287,384)             148,696
    Retained earnings (deficit)                       32,712            (71,238)
         Total stockholders' investment            4,640,938           4,973,068
                                                 $ 9,404,724         $ 8,567,833

                                       
<FN>                                       
The accompanying notes are an integral part of these consolidated
                      financial statements.
</FN>                                       
</TABLE>
                                  
                                       
<PAGE>

<TABLE>

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                       
               FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996
                                       
<CAPTION>                                       
                                        1 9 9 8       1 9 9 7      1 9 9 6
<S>                                 <C>           <C>          <C>
   REVENUES                         $11,802,250   $13,845,483  $17,908,364
   COST OF REVENUES                   8,525,040    10,132,189   12,906,518
       Gross profit                   3,277,210     3,713,294    5,001,846
                                      
   OPERATING EXPENSES:                                
    Sales and marketing                 728,996     1,153,302    1,373,767
    Research and development          1,336,306     1,277,960    1,252,396
    General and administrative        1,781,378     1,950,567    2,286,951
    Write-down of certain                                          
       assets relating to              
       NovaChem BV (Note 4)                   -             -    1,279,871
                                      3,846,680     4,381,829    6,192,985
   Loss from operations                (569,470)     (668,535)  (1,191,139)
   Interest expense                     (75,409)      (38,154)    (106,622)
   Interest income                       57,317        52,579       63,979
   Other income (expense), net          711,009       (18,545)     (61,723)
                                        123,447      (672,655)  (1,295,505)
   Provision for (benefit                             
   from) income taxes                    26,000       (78,000)     196,000
                                         
                                         97,447      (594,655)  (1,491,505)
                                       
   Minority interest                      6,503        12,105      (14,128)
   Net income (loss)                $   103,950   $  (582,550) $(1,505,633)
                                                                         
   Basic and diluted                                                       
    net income (loss) per share     $      0.08   $     (0.44) $     (1.14)

   Weighted average common
    shares outstanding                1,323,092     1,322,005    1,322,005

<FN>                                       
      The accompanying notes are an integral part of these
               consolidated financial statements.
</FN>
</TABLE>

<PAGE>

<TABLE>

                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT

                           FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996

<CAPTION>
                                   Common Stock            Capital in      Cumulative      Retained
                            Number                         Excess of       Translation     Earnings
                            of Shares      Par Value       Par Value       Adjustment      (Deficit)
<S>                         <C>            <C>             <C>             <C>             <C>
BALANCE at March 31,1995    1,322,005      $ 13,220        $4,882,390      $1,068,490      $2,016,945

  Translation adjustment        -               -               -           (283,267)           -

  Net loss                      -               -               -               -          (1,505,633)

BALANCE at March 31,1996    1,322,005        13,220         4,882,390        785,223          511,312

  Translation adjustment        -               -               -           (636,527)           -

  Net loss                      -               -               -               -            (582,550)

BALANCE at March 31,1997    1,322,005        13,220         4,882,390        148,696          (71,238)

  Translation adjustment        -               -               -           (436,080)           -

  Issuance of common
  stock in
  connection with a 10%
  stock dividend              132,206         1,322           (1,322)            -               -

  Net income                    -               -               -                -            103,950

BALANCE at March 31,1998    1,454,211       $14,542       $4,881,068       $(287,384)     $    32,712

<FN>                                        
   The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
                                       
<PAGE>
<TABLE>
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       
               FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996
                                       
<CAPTION>                                       
                                      1 9 9 8        1 9 9 7        1 9 9 6
<S>                                <C>            <C>            <C>
CASH FLOWS FROM                                                  
  OPERATING ACTIVITIES:                                          
 Net income (loss)                 $  103,950     $  (582,550)   $(1,505,633)
 Adjustments to reconcile                                        
  net income (loss) to net                                       
  cash provided by (used in)                                     
  operating activities-                                          
    Depreciation and amortization     329,726         403,630        529,625
    Capitalization  of  research 
     costs                           (241,730)       (544,765)          -
    Gain on sale of equipment        (111,243)           -              -
    Release of certain
     indebtedness                    (113,522)           -              -
    Write-off of goodwill                                
     associated with
     acquisition of NovaChem BV          -               -         1,051,682
    Deferred income taxes            (230,995)        215,673        (24,922)
    Minority interest                  (6,503)        (12,105)        14,128
 Changes in Current Assets and                                   
   Liabilities
    Accounts receivable              (109,265)      1,756,560     (1,007,016)
    Inventories                    (1,490,514)      1,639,802        320,514
    Prepaid expenses                  (95,983)       (126,757)       281,267
    Other current assets               48,493          44,540       (140,761)
    Accounts payable                1,324,810      (1,184,244)      (516,637)
    Accrued expenses                  804,576        (174,659)       216,140
    Customer advances                 (69,390)          1,045           (112)
    Accrued income taxes               84,007        (126,673)      (302,292)
          Net cash provided by                                
          (used in)
          operating activities        226,417       1,309,497     (1,084,017)
                                                                 
CASH FLOWS FROM                                                  
  INVESTING ACTIVITIES:                                          
    Marketable securities              99,472         249,571       (349,043)
    (Increase) decrease in other
     assets                           (37,664)        (35,119)         1,039
    Purchase of equipment            (576,460)       (226,682)      (207,328)
    Proceeds from sale of
     equipment                        151,360          60,528         15,729
    Purchase of minority interest    (200,140)           -              -
    Other, including  foreign                                
     exchange effects on cash         (62,820)       (208,106)        79,978
          Net cash used in                                        
          investing activities       (626,252)       (159,808)      (459,625)
                                       
<FN>                          
                             Continues on page 25
</FN>                                       
</TABLE>
                                       
                                       
<PAGE>

<TABLE>
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       
               FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996
                                       
                                  (Continued)
                                       
<CAPTION>                                       
                                      1 9 9 8        1 9 9 7         1 9 9 6
<S>                                <C>           <C>              <C> 
CASH FLOWS FROM                                                  
  FINANCING ACTIVITIES:                                          
    Proceeds from                                                
      Short-term notes payable     $      2,948  $       5,886    $     65,540
    Payments on                                                  
      Long-term debt                     (7,465)        (6,334)        (39,060)
          Net cash (used in)                                
          provided by
          financing activities           (4,517)          (448)         26,480

NET (DECREASE) INCREASE IN                                       
  CASH AND CASH EQUIVALENTS            (404,352)     1,149,241      (1,517,162)
                                                                 
CASH AND CASH EQUIVALENTS,                                       
  BEGINNING OF YEAR                   1,634,270        485,029       2,002,191

CASH AND CASH EQUIVALENTS,                                       
  END OF YEAR                      $  1,229,918   $  1,634,270    $    485,029

</TABLE>

<TABLE>
<CAPTION>                                                             
                                      1 9 9 8        1 9 9 7        1 9 9 6
<S>                                <C>             <C>           <C>                    
Supplemental disclosure of cash                                               
flow information:
   Cash paid during the year for:                                             
     Interest                      $   124,722     $   33,417    $   130,512
     Income taxes                  $    38,171     $  459,033    $     2,180
                                                                 
Supplemental disclosure of                                       
noncash investing and financing
activities:
                                                                 
   Write-off of fully depreciated
    equipment                      $      -        $1,264,496    $      -

<FN>                                       
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
</FN>                                       
</TABLE>
                                       
                                       
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                       
(1) Operations and Accounting Policies

Novitron International, Inc. ("the Company") is a multinational company  which,
through  its  subsidiaries, designs, manufactures and  markets  instrumentation
used  in  clinical  and  analytical laboratories and in process  monitoring  in
industry.  The  Company's Dutch subsidiary, Vital Scientific  NV,  designs  and
manufactures  scientific instrumentation, including blood chemistry  analyzers.
NovaChem  BV, another Dutch subsidiary, develops and markets process  analyzers
used   in  the  production  of  petrochemicals  and  pharmaceuticals   and   in
environmental monitoring.

The  accompanying consolidated financial statements reflect the application  of
certain  accounting  policies  described  in  this  and  other  notes  to   the
consolidated financial statements.
     
     (a) Principles of Consolidation
The  consolidated financial statements include the accounts of the Company  and
its  subsidiaries:  Clinical  Data BV, Clinical Data  (Australia),  Pty.  Ltd.,
NovaChem  BV,  Spectronetics NV, and Vital Scientific  NV  (see  Note  3).  All
significant  intercompany accounts and transactions  have  been  eliminated  in
consolidation.
     
     (b) Cash and Cash Equivalents
Cash  and cash equivalents are stated at cost, which approximates market,  and
consist  of cash and marketable financial instruments with original maturities
of 90 days or less.
     
     (c) Marketable Securities
The Company accounts for marketable securities in accordance with Statement  of
Financial  Accounting  Standards  ("SFAS") No.  115,  "Accounting  for  Certain
Investments  in  Debt  and Equity Securities." Under SFAS No.  115,  marketable
securities  that  the Company has the ability and positive intent  to  hold  to
maturity  are  recorded at amortized cost and classified as  "held-to-maturity"
securities.  For  the  period  ended  March  31,  1997,  marketable  securities
consisted  of United States Treasury securities and were stated at cost,  which
approximated  market value; there were no marketable securities  at  March  31,
1998.

     (d) Inventories
Inventories are stated at the lower of cost (first-in, first-out)  or  market,
include  material,  labor  and  manufacturing overhead,  and  consist  of  the
following at March 31, 1998 and 1997:
<TABLE>
<CAPTION>
                                                     1 9 9 8         1 9 9 7
             <S>                                  <C>            <C>         
             Raw materials                        $   788,420    $    496,248
             Work-in-process                        1,768,431       1,252,249
             Finished goods                         1,162,847         777,892
                                                   $3,719,698     $ 2,526,389
</TABLE>
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
(1) Operations and Accounting Policies (continued)

     (e) Revenue Recognition
The  Company  generally  recognizes revenue from  the  sale  of  products  and
supplies at the time of shipment.
     
     (f) Depreciation and Amortization of Equipment and Intangibles
The  Company provides for depreciation and amortization using the straight-line
method  by charges to operations in amounts that allocate the cost of equipment
and intangibles over their estimated useful lives.  The estimated useful lives,
by asset classification, are as follows:

<TABLE>
             <S>                               <C>                             
             Asset Classification              Useful Lives
             Manufacturing and computer        3-7 years
             equipment
             Furniture and fixtures            3-7 years
             Leasehold improvements            Life of lease
             Vehicles                          3-5 years
             Goodwill                          20 years
</TABLE>
                                       
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived  Assets to Be Disposed Of," requires the Company to continually evaluate
whether  events  and  circumstances  have occurred  which  indicate  that  the
estimated  remaining useful life of long-lived assets and such intangibles  as
goodwill  may warrant revision or that the carrying value of these assets  may
be impaired. To compute whether assets have been impaired, the estimated gross
cash  flows for the estimated remaining useful life of the asset are  compared
to  the carrying value. To the extent that the gross cash flows are less  than
the carrying value, the assets are written down to the estimated fair value of
the  asset.  At  March  31,  1998 and 1997, the Company's  remaining  goodwill
relates  to  its  investment in Vital Scientific NV. Based on an  analysis  of
other  assets  at March 31, 1998, the Company does not believe  an  impairment
exists.

     (g) Net Income (Loss) Per Share
In  March  1997, the Financial Accounting Standards Board ("FASB") issued  SFAS
No.  128,  "Earnings  per  Share."  This statement  establishes  standards  for
computing  and  presenting  earnings per share and  applies  to  entities  with
publicly  traded  common stock or potential common stock.   This  statement  is
effective  for fiscal years ending after December 15, 1997.  Basic  net  income
(loss)  per share is determined by dividing net income by the weighted  average
shares  of common stock outstanding during the year.  Diluted net income (loss)
per  share  has been calculated on the same basis as basic earnings  per  share
because  the  Company's  potentially dilutive securities,  stock  options,  are
antidilutive.

The  net income (loss) per share in fiscal 1998, 1997 and 1996 is based on  the
weighted  average  number of common shares outstanding  during  the  respective
fiscal  years. The fiscal 1996 shares outstanding have been restated to reflect
the 1-for-3 reverse stock split on December 4, 1996 (see Note 2).

<PAGE>
 
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
                                       
(1) Operations and Accounting Policies  (continued)
     
     (g) Net Income (Loss) Per Share (continued)
In  fiscal  years  1998, 1997 and 1996, 104,818, 73,835,  and  24,652  weighted
average  common  equivalent shares, respectively,  were  not  included  in  the
diluted weighted average shares outstanding, as they were antidilutive.
     
     (h) Foreign Currency Translation
The  Company  accounts for foreign currency transaction and translation  gains
and losses in accordance with SFAS No. 52, "Foreign Currency Translation." The
functional currency of Clinical Data BV, Vital Scientific NV and Spectronetics
NV  is  the  Dutch  Guilder. During fiscal 1997, the  functional  currency  of
Clinical  Data  Australia became the Australian dollar in recognition  of  the
shift  of  its  operations  to a more domestic focus.  Also  in  fiscal  1997,
NovaChem  BV  changed  its  functional currency to the  United  States  dollar
because  the  majority of its operations are now based in the  United  States.
Gains  and losses from translating assets and liabilities that are denominated
in  currencies other than the respective functional currency are  included  in
other  expense  in the consolidated statements of operations. The  translation
adjustment required to report those subsidiaries whose functional currency  is
other  than the United States dollar into U.S. dollars is credited or  charged
to  cumulative  translation adjustment, included as a  separate  component  of
stockholders' investment in the accompanying consolidated balance sheets.
Foreign currency transaction gains and losses are included in other expense in
the consolidated statements of operations.

     (i) Postretirement Benefits
The Company has no obligations for postretirement benefits.
     
     (j) Management's Use of Estimates
The  preparation of financial statements in conformity with generally accepted
accounting  principles requires management to make estimates  and  assumptions
that  affect the reported amounts of assets and liabilities and disclosure  of
contingent assets and liabilities at the date of the financial statements  and
the  reported  amounts of revenues and expenses during the  reporting  period.
Actual results could differ from those estimates.
     
     (k) Warranty Policy
The  Company  provides a one year warranty on its manufactured products  which
covers parts and materials. The Company reserves for this warranty at the time
of sale.

     (l) Financial Instruments
The estimated fair value of the Company's financial instruments, which include
cash equivalents, marketable securities, accounts receivable, accounts payable
and long-term debt, approximates their carrying value.


<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
                                       
(1) Operations and Accounting Policies  (continued)
     
     (m) Concentration of Credit Risk
SFAS No. 105, "Disclosure of Information about Financial Instruments with Off-
Balance-Sheet  Risk  and Financial Instruments with Concentrations  of  Credit
Risk,"  requires  disclosure of any significant off-balance-sheet  and  credit
risk  concentrations. The Company has no significant off-balance-sheet  credit
risk  such  as  foreign exchange contracts, option contracts or other  foreign
hedging  arrangements. The Company maintains the majority of its cash balances
with  large  financial  institutions. See Notes  10  and  14  for  significant
customers and financial information by geographic area, respectively.

     (n) Software Development Costs
In  connection  with  the  development of software included  as  a  significant
component of a new analysis product, the Company has applied the provisions  of
SFAS  No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased
or  Otherwise Marketed."  SFAS No. 86 requires the Company to capitalize  those
costs  incurred  for the development of computer software that  will  be  sold,
leased   or  otherwise  marketed  once  technological  feasibility   has   been
established  up to the time at which the product is available for sale  to  the
customer. These capitalized costs are subject to an ongoing assessment  of  the
recoverability based on anticipated future revenues and changes in hardware and
software technologies.

Amortization  of  the capitalized software development costs  begins  when  the
product is available for general release. Amortization is provided on a product-
by-product basis on either the straight-line method over periods not  exceeding
five  years  or  the  sales  ratio  method.  Unamortized  capitalized  software
development  costs determined to be in excess of net realizable  value  of  the
product  are  expensed  immediately. The Company  has  begun  to  amortize  the
capitalized  software costs over the sales ratio method beginning in  the  year
ended  March  31,  1998.  Amortization recorded during  fiscal  year  1998  was
approximately $11,000.

During  the  years  ended  March 31, 1998 and 1997,  the  Company  capitalized
$242,000 and $502,000, respectively, under SFAS No. 86, which is included as a
component of other assets in the accompanying consolidated balance sheet.

     (o) New Accounting Standards
In  June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
SFAS No. 130 requires disclosure of all components of comprehensive income  on
an  annual basis and an interim basis. Comprehensive income is defined as  the
change  in  equity of a business enterprise during a period from  transactions
and  other  events and circumstances from nonowner sources. SFAS  No.  130  is
effective for fiscal years beginning after December 15, 1997.

                                       
<PAGE>
                                       
                                       
                                       
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
                                       
(1) Operations and Accounting Policies  (continued)
     
     (o) New Accounting Standards (continued)
In  July 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an
Enterprise  and Related Information." SFAS No. 131 requires certain  financial
and  supplementary  information to be disclosed on an annual  and  an  interim
basis  for each reportable segment of an enterprise. SFAS No. 131 is effective
for  fiscal  years  beginning after December 31, 1997.  Unless  impracticable,
companies would be required to restate prior period information upon adoption.
The Company does not expect this accounting pronouncement to materially effect
its financial statements.

(2) Reverse Stock Split and Stock Dividend
On  November 12, 1996, the Company declared a 1 for 3 reverse stock  split  of
the common stock payable on December 4, 1996 to the stockholders of record  on
November 25, 1996. No fractional shares were distributed and the common  stock
issued  to  each  stockholder was rounded up to the nearest  whole  number  of
shares. All share and per share amounts for fiscal 1996 have been adjusted  to
reflect this reverse stock split.

On  March 7, 1998, the Company declared a 10% common stock dividend payable on
March  27, 1998 to the shareholders of record on March 13, 1998. No fractional
shares  or  cash  were  distributed  and  the  common  stock  issued  to  each
stockholder was rounded up to the nearest whole number of shares.  All  option
shares and prices for fiscal 1998, 1997 and 1996 have been adjusted to reflect
this stock dividend.

(3) Vital Scientific NV
On  October 21, 1997, the Company purchased the remaining six (6%) percent  of
Vital  Scientific NV from the minority shareholder for approximately $200,000.
The  transaction  has been recorded as a purchase and the  resultant  gain  of
approximately  $37,000  on  the purchase of the  minority  interest  has  been
reflected  as  a  reduction of goodwill relating to past  purchases  of  prior
investments  in  Vital Scientific. The remaining goodwill is  being  amortized
over 7 years on a straight-line basis.



<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
(4) Write-down of Certain Assets Relating to NovaChem BV
In accordance with SFAS No. 121, the Company determined that the carrying value
of  the goodwill recorded in connection with its investment in NovaChem BV  was
impaired  at  March  31, 1996. Accordingly, the Company recorded  a  charge  of
$1,052,000  relating  to the write-off of goodwill. In  addition,  the  Company
wrote off $228,000 of related obsolete inventory at March 31, 1996.

(5) Short-Term Notes Payable and Long-Term Debt
The  Company's foreign debt obligations are as follows at March 31, 1998 and
1997:
<TABLE>
<CAPTION>
                                                   1 9 9 8        1 9 9 7
          <S>                                   <C>           <C>  
          Short-term notes payable              $   47,246    $     6,521
                                                                         
          Long-term debt -                                               
            Note payable, interest free for                              
            a period of five years:
            principal repayment began
            in fiscal 1997 (approximately
            $14,000 per year)                         -            23,431
                                                                         
            Other notes payable, interest                                
             ranging from 11.35% - 11.55%           34,895         65,452
                                                    82,141         95,404
          Less:  short-term  notes  payable                              
          and current  portion of long-term
          debt                                      52,113         54,375
                                                $   30,028      $  41,029
                                       

</TABLE>

As  of March 31, 1998, Clinical Data BV, Vital Scientific NV, Spectronetics  NV
and  NovaChem  BV  have  an  agreement with a bank that  provides  consolidated
overdraft  protection. In April 1998, the Company entered  a  new  relationship
with  a  major  Dutch  bank,  which provides  for  a  4,000,000  Dutch  Guilder
(approximately $1,920,000) line of credit. Interest on this facility is set  at
1.25% above the base rate as reported by the Netherlands Central Bank (3.75% at
March  31,  1998).  Trade  receivables and inventory of  Vital  Scientific  are
provided  as security for this facility. The line continues as long as  certain
capital covenants are met.

<PAGE>                                       
                                                                             
                                       
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
                                       
(6) Lease Commitments
The Company leases facilities, vehicles and computer equipment under operating
leases. Future minimum lease payments under these leases as of March 31, 1998
are approximately as follows:

<TABLE>
             <C>                              <C>
             Year Ending March 31,                  Amount
                       1999                     $  374,000
                       2000                        372,000
                       2001                        343,000
                       2002                        301,000
                       2003                        278,000
                    Thereafter                   1,340,000
                                                $3,008,000

</TABLE>

Rent  expense  of approximately $329,000, $340,000 and $418,000 was  incurred
during fiscal 1998, 1997 and 1996, respectively.

(7) Stock Option Plans
The  Company has established a 1991 Stock Option Plan ("the Plan") and a 1991
Directors' Stock Option Plan ("the Directors' Plan") under which an aggregate
of   120,000  shares  and  60,000  shares  of  common  stock  are   reserved,
respectively,  for  the purpose of granting incentive and nonstatutory  stock
options.

Under  the terms of the Plan and the Directors' Plan, all options are granted
at  not  less than the fair value of the stock on the date of grant.  Options
are  exercisable over various periods not exceeding four years;  the  options
under  the  Plan  expire no later than seven years after the  date  of  grant
whereas  the options granted under the Directors' Plan expire no  later  than
ten years after the date of grant.

During  fiscal year 1997, options to purchase 33,000 shares of  common  stock
were  granted to an officer at 110% of the fair market value of the stock  on
the date of grant.

In  October 1995, the FASB released SFAS No. 123, "Accounting for Stock-Based
Compensation,"  which is effective for fiscal years beginning after  December
31,  1995.  SFAS  No. 123 encourages companies to adopt a  fair  value  based
method  of  accounting for employee stock options, but  allows  companies  to
continue  to  account  for  those plans using the  accounting  prescribed  by
Accounting Principles Board Opinion No. 25, "Accounting for Stock  Issued  to
Employees"  ("APB  No.  25").  The Company has  adopted  the  disclosure-only
requirements  of SFAS No. 123 and plans to continue to account  for  employee
stock  options using APB No. 25, making pro forma disclosures of  net  income
and earnings per share as if the fair value based method had been applied.
                                       


<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
(7) Stock Option Plans (continued)
The following table summarizes stock option activity during fiscal 1998, 1997
and 1996.
<TABLE>
<CAPTION>
                              Number of       Option Price           Weighted-
                              Shares      Per Share      Total       Average Price

<S>                           <C>         <C>            <C>          <C>
 Outstanding at March 31, 
  1995                        23,147      $ 3.41-14.25   $ 291,271    $12.58
   Options granted             6,307       12.95-13.30      82,960     13.15
   Options canceled or
    expired                   (2,612)       3.41-10.91     (20,250)    (7.75)
 Outstanding at March 31,
  1996                        26,842      $10.91-14.25   $ 353,981    $13.19
   Options granted            88,550        2.73- 7.50     279,375      3.15
   Options canceled or
    expired                   (4,987)      12.95-13.64     (67,111)   (13.46)
 Outstanding at March 31,
  1997                       110,405      $ 2.73-14.25   $ 566,245    $ 5.13
   Options canceled or
    expired                  (13,788)      10.91-14.25    (181,110)   (13.14)
 Outstanding at March 31,
  1998                        96,617      $ 2.73-13.30     385,135    $ 3.99
                                                                  
 Exercisable at March 31,
  1998                        36,485      $ 2.73-13.30   $ 184,260    $ 5.05
</TABLE>
                                       
The  Company has computed the pro forma disclosures required under SFAS No. 123
for  all stock options granted to employees of the Company and its subsidiaries
in  the  fiscal  years  ended March 31, 1998 and 1997 using  the  Black-Scholes
option pricing model prescribed by SFAS No. 123.

The  assumptions  used to calculate the SFAS No. 123 pro forma  disclosure  and
weighted  average information for the fiscal years ended March 31,  1998,  1997
and 1996 are as follows:
<TABLE>
<CAPTION>
                                   1 9 9 8         1 9 9 7         1 9 9 6
<S>                             <C>              <C>             <C>  
Risk-free interest rate         6.30%-6.73%      6.30%-6.73%        6.00%
Expected dividend yield              0                0               0
Expected lives                  4.39 years       6.43 years      4.00 years
Expected volatility             50.93%-51.33%   50.93%-51.33%      51.56%
Weighted average grant date                                            
 fair value of options
 granted during the period            -             $1.91           $6.76
Weighted average exercise                                              
 price of options granted
 during the period                    -             $3.47          $14.47
Weighted average remaining                                             
 contractual life of 
 options outstanding             4.43 years      5.87 years      3.49 years

</TABLE>

<PAGE>
                                       
                                       
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
(7) Stock Option Plans (continued)
The  pro  forma  effect on the Company of applying SFAS No.  123  to  recognize
certain compensation expense for the years ended March 31, 1998, 1997 and  1996
would be as follows:

<TABLE>
<CAPTION>
                                  1 9 9 8       1 9 9 7       1 9 9 6
<S>                                <C>        <C>         <C> 
Pro forma net income (loss)        $45,812    $(594,708)  $(1,507,914)
Pro forma net income (loss)
 per share                         $ 0.03     $  (0.45)   $   (1.14)

</TABLE>

The range of exercise prices for options outstanding and options exercisable at
March 31, 1998 is as follows:

<TABLE>
<CAPTION>                                   
                        Outstanding                          Exercisable
                              Weighted                              Weighted
                    Number    Remaining     Average      Number      Average 
                      of      Contractual   Exercise     of          Exercise
Price Range         Shares    Life          Price        Shares      Price
<C>                 <C>       <C>           <C>          <C>         <C> 
$2.73-$3.00         82,500    4.67 years    $  2.84      27,501      $  2.84
$7.50                6,050    2.11 years    $  7.50       2,017      $  7.50
$12.95-$13.30        8,067    3.70 years    $ 13.11       6,967      $ 13.08
        
                    96,617    4.43 years    $  3.99      36,485      $  5.05
</TABLE>
                                                        

(8) Income Taxes
The  Company  accounts  for  income taxes in  accordance  with  SFAS  No.  109,
"Accounting  for  Income  Taxes."  Deferred  tax  assets  and  liabilities  are
recognized for the future tax consequences attributable to differences  between
the financial statement carrying amounts of existing assets and liabilities and
their  respective tax bases. Deferred tax assets and liabilities  are  measured
using  enacted tax rates expected to apply to taxable income in  the  years  in
which those temporary differences are expected to be recovered or settled.  The
effect  on  deferred tax assets and liabilities of a change  in  tax  rates  is
recognized in income in the period that includes the enactment date.

<PAGE>
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
(8) Income Taxes (continued)
The  provision  for  (benefit  from) income taxes  shown  in  the  accompanying
consolidated statements of operations consists of the following:
<TABLE>
<CAPTION>
                                  For the Years Ended March 31,
                                      1 9 9 8        1 9 9 7        1 9 9 6
   <S>                             <C>             <C>           <C>  
   Current:                                                                 
    Domestic                       $    2,000      $    -        $     -
    Foreign                           278,000       (265,000)       221,000
  Total Current                       280,000       (265,000)       221,000
  Deferred:                                                               
    Domestic                             -              -              -
    Foreign                          (254,000)       187,000        (25,000)
  Total Deferred                     (254,000)       187,000        (25,000)
                                   $  196,000      $  26,000     $  (78,000)

</TABLE>

The  provision for (benefit from) income taxes differs from the amount computed
by applying the statutory federal income tax rate to income before taxes due to
the following:

<TABLE>
<CAPTION>
                                        For the Years Ended March 31,
                                     1 9 9 8        1 9 9 7        1 9 9 6
  <S>                             <C>            <C>            <C>
  Provision  for (benefit  from)                                
  taxes at statutory rate         $  43,000      $  (235,000)   $  (454,000)
  Utilization of domestic net                                   
   operating loss carryforward     (166,000)         (26,000)       (39,000)
  Utilization of foreign net                                    
   operating loss carryforward         -              (9,000)          -
  Foreign operating loss not
   benefited                        144,000          211,000        672,000
  Taxes resulting from higher                                   
   incremental foreign rate           4,000             -            38,000
  Tax benefit resulting from                                    
   lower statutory foreign rate     (15,000)         (13,000)        (3,000)
  Other                              16,000           (6,000)       (18,000)

                                  $  26,000      $   (78,000)  $    196,000

</TABLE>

<PAGE>


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
(8) Income Taxes (continued)
The approximate income tax effect of each type of temporary difference
comprising the net deferred tax asset at March 31, 1998 and 1997 is as follows:

<TABLE>
<CAPTION>
                                             1 9 9 8        1 9 9 7
       <S>                                <C>            <C>       
       Net operating loss carryforwards    2,422,492      2,422,321
       General business tax credit
        carryforwards                        122,672        136,048
       Other, net                             12,540         28,308

                                           2,557,704      2,586,677
                                                                   
       Less: valuation allowance           2,557,704      2,558,077
      
                                          $     -        $   28,600

</TABLE>

SFAS No. 109 requires the Company to assess whether it is more likely than  not
that  the  Company  will  realize its deferred  tax  assets.  The  Company  has
determined  that,  except  for the net operating  loss  carryforward  at  Vital
Scientific  NV during fiscal year 1997, it does not meet the "more likely  than
not"  standard.  Accordingly, the Company has provided  a  valuation  allowance
against the deferred tax assets for all items except for the aforementioned net
operating loss carryforward in 1997.

The tax effect on the components of the deferred tax liability at March 31,
1998 and 1997 is as follows:
<TABLE>
<CAPTION>

                                             1 9 9 8        1 9 9 7
       <S>                                  <C>           <C> 
       Prior pension service costs          $ 39,144      $ 107,088
       Depreciation                           54,700           -
       Research and development
        liabilities                             -           240,905
 
                                            $ 93,844      $ 347,993
</TABLE>
                                                
The Company has net operating loss carryforwards for U.S. federal and state tax
purposes   of  approximately  $3,449,000  and  $751,000,  respectively;   these
carryforwards  will  expire  from 1999 to 2013. In addition,  the  Company  has
available  U.S.  federal  tax credit carryforwards of  approximately  $123,000.
These  carryforwards may be used to offset future taxable income, if  any.  The
federal  tax credit carryforwards will expire from 1999 to 2012 and are subject
to  review  and possible adjustment by the Internal Revenue Service.  There  is
approximately  $894,000  in U.S. alternative minimum  tax  net  operating  loss
carryforwards which expire between 2008 and 2010.

The  Company  has  foreign  net operating loss carryforwards  of  approximately
$3,269,000 that are not subject to expiration.

                                       
<PAGE>


                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       
(9) Pension Plan
The  Company's subsidiary, Vital Scientific NV, participates in a multiemployer
defined  benefit  pension  plan. Contributions and  expenses  incurred  by  the
Company  amounted to approximately $97,000, $103,000 and $98,000 during  fiscal
1998, 1997 and 1996, respectively.

(10) Significant Customers
During  fiscal  1998, 1997 and 1996, the Company had sales of  scientific  and
process  monitoring instrumentation to one customer amounting to approximately
56%, 75% and 83% of consolidated revenues, respectively. At March 31, 1998 and
1997,  57%  and  75%,  respectively,  of accounts  receivable  was  from  this
customer.

The  Company  expects that sales to this customer will decrease  significantly
during  the  upcoming  fiscal  year. The Company  is  currently  pursuing  new
customer  relationships,  which management believes will  at  least  partially
offset the expected decline in sales to this customer.

(11) Other Income (Expense), net
Other income (expense), net, consists of the following:
<TABLE>
<CAPTION>
                                            For the Years Ended March 31,
                                     1 9 9 8        1 9 9 7        1 9 9 6
       <S>                         <C>             <C>           <C> 
       Foreign exchange loss       $ (48,039)      $ (22,842)    $ (61,947)
       Settlement of a dispute       625,741            -             -
       Gain on sale of certain
        assets                       111,243            -             -
       Other income, net             22,064           4,297            224

                                    $711,009       $(18,545)     $ (61,723)
</TABLE>

In  December 1997, the Company amicably settled a dispute with E. Merck of all
outstanding issues related to the performance of each party under a series  of
distribution  agreements. The settlement, net of legal  expenses,  included  a
cash  payment to the Company and the release of certain indebtedness  owed  by
the Company in the net amount of $625,741.



<PAGE>

                                       
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                MARCH 31, 1998
                                       
                                  (Continued)
                                       

(12) Accrued Expenses
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
                                          1 9 9 8         1 9 9 7
       <S>                             <C>            <C> 
       Payroll and payroll-related
        expenses                       $    542,285   $   478,372
       Warranty and retrofit
        reserves                            129,995       281,991
       Development credits                1,035,312        96,208
       Other                                176,444       362,980
     
                                       $  1,884,036   $ 1,219,551
</TABLE>
     
The  Company has entered into a credit financing arrangement with a Netherlands
governmental  agency in connection with the development of a new  product.  The
grant  is  to be repaid as long as the product is a commercial success.  As  of
March  31,  1998,  the Company has begun to ship this product,  evidencing  its
commercial success. The Company has accrued all funding received as development
credits in the table above.

(13) Other Assets
Other assets consist of the following:
<TABLE>
<CAPTION>

                                                 1 9 9 8      1 9 9 7
          <S>                                  <C>          <C>
          Goodwill, net of accumulated        
           amortization of  $454,000 and             
           $381,000  at  March 31, 1998             
           and 1997, respectively              $  85,524    $  219,324
          Capitalized software development             
           costs, net of accumulated    
           amortization                          687,197       502,331
          Other                                  127,208        94,392
                                   
                                               $ 899,929     $ 816,047
                                       
</TABLE>
                                       
                                       
<PAGE>
                                       
                                       
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                        
                                 MARCH 31, 1998
                                        
                                   (Continued)
                                        
(14) Segment Information
The  Company's  domestic business activities consist of corporate administration
and  process  monitoring. Vital Scientific NV manufactures and sells  scientific
instrumentation.   NovaChem   BV   designs  and   markets   process   monitoring
instrumentation.  During fiscal year 1996, the Company's  Australian  subsidiary
sold  scientific instrumentation primarily to customers in the People's Republic
of  China. During fiscal years 1997 and 1998, domestic sales of instruments  and
consumables  provided the majority of the Australian revenues. Revenues,  income
(loss)  from  operations and identifiable assets classified by  segment  are  as
follows (in thousands):

<TABLE>
<CAPTION>

                              United States                Europe
                          Adminis-    Process       Scientific     Process      Australia    Consolidated
                          tration     Monitoring    Instruments    Monitoring
<S>                       <C>         <C>           <C>            <C>          <C>          <C>            
 March 31, 1998                                                                                            
  Sales to unaffiliated                                                                                               
   customers              $   -       $     65      $   10,627     $       3    $   1,107    $   11,802
  Sales or transfers                                                                                         
   between geographic
   areas                      -             -                3             -          -             -
                          $   -       $     65      $   10,630     $       3    $   1,107    $   11,802
  Income(loss) from
   operations             $ (380)     $   (142)     $      (44)    $     (16)   $      13    $     (569)
  Identifiable assets     $  145      $     50      $    8,507     $     116    $     587    $    9,405

 March 31, 1997                                                                
  Sales to unaffiliated
   customers              $   -       $    127      $   11,852     $      29    $   1,837    $   13,845
 Sales or transfers
   between geographic                                         
   areas                      -             -              630            (9)          -           -
                          $   -       $    127      $   12,842     $      20    $   1,837    $   13,485           
 Income (loss) from 
   opeartions             $ (408)     $   (190)     $       (7)    $    (117)   $      53    $     (669)
 Identifiable assets      $  172      $    150      $    7,837     $    (132)   $     541    $    8,568
                                                                                                       
 March 31, 1996                                                                                         
  Sales to unaffiliated
  customers               $   -       $     -       $   15,826     $     186    $   1,896    $   17,908
  Sales o transfers
   between geographic
   areas                      -             -            1,280            12           -            - 
                          $   -       $     -       $   17,106     $     198    $   1,896    $   17,908
  Income (loss) from
   operations             $ (386)     $   (497)     $      716     $    (995)   $     (29)   $   (1,191)
  Identifiable assets     $  755      $     65      $   10,190     $      34    $      716   $   11,760

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                            SCHEDULE II
                                   
                                       
                       VALUATION AND QUALIFYING ACCOUNTS
                                       
                                MARCH 31, 1998
                                       
                                       
                        Balance at                                     
Item                   Beginning of   Additions     Deductions     Balance at
                          Period                                    End of
                                                                    Period
<S>                    <C>           <C>           <C>          <C>                                                                 
Allowance for                                                    
 Doubtful Accounts
                                                                 
        1998           $  101,634    $     -       $   52,177    $   49,457
                                                                
        1997           $  118,707    $     -       $   17,073    $  101,634
                                                                 
        1996           $  112,055    $    69,322   $   62,670    $  118,707
                                                                 
</TABLE>
                                                                 
<PAGE>

                                 EXHIBIT INDEX

Exhibit
Number                          Description
2.1**       Purchase agreement dated February 7, 1990 between Clinical Data,
            Inc. and CardioData Systems, a division of UM Holding Company.
2.2***      Stock Purchase Agreement dated October 31, 1990 between Merrimack
            Valley Medical Services Company, Enviromed, Inc., and
            Clinical Data, Inc.
3.1*        Certificate of Incorporation
3.2*        Bylaws
3.3*****    Form 10-C dated June 16, 1994 - Change in Name of Issuer effective
            April 12, 1994.
4.1*        Article Fourth of the Certificate of Incorporation, as amended
            (included in Exhibit 3.1)
10.25****   1991 Stock Option Plan and 1991 Directors' Option Plan
            and forms of option agreement.
22.1        Subsidiaries of the Registrant
24.1        Consent of Arthur Andersen LLP



*     Incorporated by reference to exhibits to the Registrant's Registration
      Statement on Form S-1 (File No. 2-82494).
**    Incorporated by reference to exhibits to the Registrant's Notice of
      Special Meeting of Stockholders held on February 7, 1990 and mailed to
      stockholders on January 18, 1990.
***   Incorporated by reference to exhibits to the Registrant's Form 10-Q for
      the period ended December 31, 1990.
****  Incorporated by reference to exhibits to the Registration Statement on
      Form S-8 filed with the Commission on March 5, 1992.
***** Incorporated by reference to Form 10-C filed with the SEC on June 16,
      1994.

<PAGE>

                                 EXHIBIT 22.1

                        SUBSIDIARIES OF THE REGISTRANT
                                       
                                       
                                       
                                       
    The Registrant has the following subsidiaries, the financial statements of
which are included in the consolidated financial statements of the Registrant:

<TABLE>
<CAPTION>                                              
                                  Country                Percentage
   Name                           of Incorporation       Owned
   <C>                            <C>                    <C> 
   Clinical Data                 
    (Australia) Pty. Ltd.         Australia              100%     
   Clinical Data BV               Netherlands            100%
   NovaChem BV                    Netherlands            100%
   Spectronetics NV               Curacao                100%
   Vital Scientific NV            Netherlands            100%

</TABLE>


<PAGE>


                                 EXHIBIT 24.1
                                       
                                       
                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 10-K into the Company's previously filed
Registration Statements on Form S-8 (File Nos. 33-25938, 33-25939, 33-46233 and
33-46234).


                                                            ARTHUR ANDERSEN LLP

Boston, Massachusetts
June 25, 1998