<PAGE>
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                      --------------------------------
                                   FORM 10-Q


MARK ONE
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                      OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM      TO

                          COMMISSION FILE NO. 1-14416
                           ------------------------

                                 BIGMAR, INC.
            (Exact name of registrant as specified in its charter)


                DELAWARE                              31-1445779
   (State or other jurisdiction of       (I.R.S. Employer Identification No.)
   incorporation or organization)                        
                                                           

        9711 SPORTSMAN CLUB ROAD                        43031
             JOHNSTOWN, OHIO                          (Zip Code)
(Address of principal executive offices)                   

      Registrant's telephone number, including area code:  (740) 966-5800


Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.  YES /X/   NO / /

As of August 14, 1998, 4,185,000 shares of common stock of the registrant were
outstanding.

<PAGE>

                         BIGMAR, INC. AND SUBSIDIARIES

                                     INDEX


Part I FINANCIAL INFORMATION:

<TABLE>

<S>     <C>                                                                        <C>
Item 1  Financial Statements

        Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997
        (Unaudited)                                                                3

        Consolidated Condensed Statements of Operations for the quarters 
        and six month periods ended June 30, 1998 and 1997 (Unaudited)             4

        Consolidated Condensed Statements of Cash Flows for the six months 
        ended June 30, 1998 and 1997 (Unaudited)                                   5

        Consolidated Statements of Comprehensive Income (Loss) for the quarters  
        and six month periods ended June 30, 1998 and 1997 (Unaudited)             6

        Notes to the Consolidated Condensed Financial Statements (Unaudited)       7

Item 2  Management's Discussion and Analysis of Financial Condition 
        and Results of Operations                                                 10

Part II OTHER INFORMATION:

Item 4  Submission of Matters to a Vote of Security Holders                       14

Item 6  Exhibits and Reports on Form 8-K                                          15

        Signatures                                                                16

</TABLE>

                                       2

<PAGE>

                         BIGMAR, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                        June 30
                                                          1998         1997
                                                      -----------   -----------
                                                      (Unaudited)
<S>                                                   <C>            <C>
                                ASSETS
Current assets:
 Cash and cash equivalents                            $   136,412   $   643,232
 Accounts receivable, net of allowance of $0 at
  June 30, 1998 and December 31, 1997                     617,333       847,899
 Inventories (Note 2)                                   1,326,122       890,249
 Prepaid expenses and other current assets                363,119       432,234
                                                      -----------   -----------
  Total current assets                                  2,442,986     2,813,614
Property, plant and equipment, net                     17,002,200    17,164,158
Intangible and other assets, net                         477,075       539,318
                                                      -----------   -----------
    Total                                             $19,922,261   $20,517,090
                                                      -----------   -----------
                                                      -----------   -----------

                         LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                       1,534,574     1,766,992
 Notes payable                                          5,413,180     2,318,644
 Current portion of long-term debt                        565,529       581,674
 Due to related parties                                   154,903          -
 Accrued expenses and other current liabilities           835,510       630,713
                                                      -----------   -----------
  Total current liabilities                             8,503,696     5,298,023
Long-term debt                                         10,026,014    10,090,467
                                                      -----------   -----------
   Total liabilities                                   18,529,710    15,388,490
                                                      -----------   -----------
Stockholders' equity:
 Preferred stock ($.001 par value; 5,000,000 shares 
  authorized; none issued)

 Common stock ($.001 par value; 20,000,000 shares 
  authorized and 4,185,000 shares issued and 
  outstanding at June 30, 1998 and 15,000,000 
  shares authorized and 4,185,000 shares 
  issued and outstanding at December 31, 1997)              4,185         4,185

 Additional paid-in capital                            16,021,166    15,063,166

 Retained earnings (deficit)                         (13,609,991)    (9,012,630)

 Accumulated other comprehensive income:

  Foreign currency translation adjustments            (1,022,809)      (926,121)
                                                      -----------   -----------
   Total stockholders' equity                           1,392,551     5,128,600
                                                      -----------   -----------
    Total                                             $19,922,261   $20,517,090
                                                      -----------   -----------
                                                      -----------   -----------
</TABLE>

              See accompanying notes to consolidated financial statements.


                                       3

<PAGE>

                                       
                         BIGMAR, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                         SECOND QUARTER ENDING JUNE 30
                                  (Unaudited)



<TABLE>
<CAPTION>

                                                             Second Quarter                Six Months
                                                      --------------------------    -------------------------
                                                          1998           1997           1998          1997
                                                      -----------    -----------    -----------   -----------
<S>                                                   <C>            <C>            <C>           <C>
Net sales                                             $ 1,450,661    $ 1,486,673    $ 2,886,828   $ 3,216,772
Cost of goods sold                                      1,025,837      1,235,534      2,104,279     2,608,826
                                                      -----------    -----------    -----------   -----------
Gross margin                                              424,824        251,139        782,549       607,946
                                                      -----------    -----------    -----------   -----------
Operating expenses:
 Research and development                                 747,995        201,790      1,491,521       419,964
 Selling, general and administrative                    1,002,894        829,275      2,202,352     1,761,547
                                                      -----------    -----------    -----------   -----------
  Total operating expenses                              1,750,889      1,031,065      3,693,873     2,181,511
                                                      -----------    -----------    -----------   -----------
Operating income (loss)                                (1,326,065)      (779,926)    (2,911,324)   (1,573,565)

Other income (expense)                                     80,698         72,831         68,082       213,002
Interest income (expense)                                (263,994)       (82,548)      (500,391)     (173,900)
Issuance of preferred stock warrants for
  loan guarantee (Note 3)                                (958,000)                     (958,000)
Gain (loss) on foreign currency transactions              (14,696)          -          (295,728)        -
                                                      -----------    -----------    -----------   -----------
Income (loss) before income taxes                      (2,482,057)      (789,643)    (4,597,361)   (1,534,463)
Income taxes (benefit):                                     -              2,332           -            2,332
                                                      -----------    -----------    -----------   -----------
Net income (loss)                                     $(2,482,057)    $ (791,975)   $(4,597,361)  $(1,536,795)
                                                      -----------    -----------    -----------   -----------
                                                      -----------    -----------    -----------   -----------
Basic earnings (loss) per share                       $     (0.59)    $    (0.20)   $     (1.10)  $     (0.39)
                                                      -----------    -----------    -----------   -----------
                                                      -----------    -----------    -----------   -----------
Weighted average shares outstanding                     4,185,000      3,985,000      4,185,000     3,985,000
                                                      -----------    -----------    -----------   -----------
                                                      -----------    -----------    -----------   -----------
</TABLE>

           See accompanying notes to consolidated financial statements.


                                       4
<PAGE>
                                       
                         BIGMAR, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                        Six Months Ended June 30
                                                       --------------------------
                                                           1998           1997
                                                       -----------    -----------
<S>                                                    <C>             <C>
Cash flows from operating activities:
 Net loss                                              $(4,597,361)   $(1,536,795)
 Adjustments to reconcile net loss to net cash       
  provided by (used in) operating activities:        
   Issue preferred stock warrants                          958,000           -
   Depreciation and amortization                           793,767        207,764
   Unrealized foreign exchange losses                      295,154           -
   Changes in operating assets and liabilities:      
     (Increase) decrease in accounts receivable            200,691        (41,302)
     (Increase) decrease in inventories                   (477,238)      (309,422)
     (Increase) decrease in prepaid expenses and     
      other current assets                                  51,800        112,352
    Increase (decrease) in accounts payable               (171,630)      (734,124)
    Increase in due to related parties                     157,952           -
    Increase (decrease) in accrued expenses and      
     other current liabilities                             223,546         36,972
                                                       -----------    -----------
    Net cash provide by (used in) operating             
     activities                                         (2,565,319)    (2,264,555)
                                                       -----------    -----------
Cash flows from investing activities:                
 Purchase of property, plant and equipment              (1,220,117)    (1,867,857)
                                                       -----------    -----------
    Net cash (used in) investing activities             (1,220,117)    (1,867,857)
                                                       -----------    -----------
Cash flows from financing activities:                
 Short-term borrowings                                   3,154,646          5,574
 Long-term borrowings                                      175,875           -
                                                       -----------    -----------
    Net cash provided by financing activities            3,330,521          5,574
                                                       -----------    -----------
Effect of exchange rates on cash                           (51,905)       451,643
                                                       -----------    -----------
Net increase (decrease) in cash and cash equivalents      (506,820)    (3,675,195)
Cash and cash equivalents, beginning of period             643,232      4,362,938
                                                       -----------    -----------
Cash and cash equivalents, end of period               $   136,412    $   687,743
                                                       -----------    -----------
                                                       -----------    -----------
                                                     
Supplemental disclosure of cash flow information:    
 Cash paid during the period for:                    
  Interest                                             $   445,000    $   458,754
  Income taxes                                         $      -       $       150

</TABLE>

         See accompanying notes to consolidated financial statements.


                                       5

<PAGE>
                                       
                         BIGMAR, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                         SECOND QUARTER ENDING JUNE 30
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                          Second Quarter                 Six Months
                                                     ------------------------    --------------------------
                                                        1998           1997           1998           1997
                                                     -----------    ---------    -----------    -----------
<S>                                                  <C>            <C>          <C>            <C>

Net income (loss)                                    $(2,482,057)   $(791,975)   $(4,597,361)   $(1,536,795)

Other comprehensive income, net of tax:
 Foreign currency translation
  adjustments, net of income
  taxes of $0 in 1998 and 1997                            10,043      (81,506)       (96,688)      (381,042)
                                                     -----------    ---------    -----------    -----------
Comprehensive income (loss)                          $(2,472,014)   $(873,481)   $(4,694,049)   $(1,917,837)
                                                     -----------    ---------    -----------    -----------
                                                     -----------    ---------    -----------    -----------
</TABLE>



                See accompanying notes to consolidated financial statements.


                                             6

<PAGE>

                         BIGMAR, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(1)  BASIS OF PRESENTATION

Bigmar, Inc. is a Delaware Corporation that owns 100% of the capital stock of
two Swiss Corporations, Bioren, SA and Bigmar Pharmaceuticals, SA, and 100% of
the capital stock of a Delaware corporation, Bigmar Therapeutics, Inc.

In the opinion of management, the accompanying unaudited financial statements
include all adjustments necessary to present fairly the Company's financial
position at June 30, 1998 and 1997, and the results of operations and the cash
flows and the comprehensive income for all periods presented.  Certain amounts
in the accompanying financial statements have been restated to conform to the
June 30, 1998 presentation.  The results of the interim periods are not
necessarily indicative of the results to be obtained for the entire year.

For a summary of significant accounting policies (which have not changed from
December 31, 1997) and additional financial information, see Bigmar Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1997.  The 10-K
should be read in conjunction with these financial statements.

The accompanying financial statements have been prepared assuming that the 
Company will continue as a going concern.  The Company recently constructed a 
pharmaceutical manufacturing plant in Barbengo, Switzerland.  The Company has 
obtained a general approval to manufacture pharmaceutical products from the 
Intercantonal Office for the Control of Medications ("IKS") in Switzerland 
and is still in the process of validating the plant's equipment and processes 
for approval by the United States Food and Drug Administration ("FDA"). These 
activities have consumed a substantial amount of the Company's resources, 
including proceeds from its initial public offering, proceeds from an 
offshore placement of equity securities and issuance of convertible notes in 
August 1997, and proceeds from its line of credit. In addition, sales of the 
Company's oncology product are dependent upon the successful outcome of these 
compliance activities, which are expected to continue into at least the 
fourth quarter of 1998. Based upon the foregoing management anticipates that 
current operations plus the line of credit will generate sufficient cash to 
fund the Company's operations through December 1998.  As a result, the 
Company anticipates that it will require additional financing in order to 
complete the validation process and to continue to fund its operations. 
Management is discussing additional financing with a number of third parties, 
however, there is no assurance that such financing will be available on terms 
acceptable to the Company, if at all.  In addition, there are no assurances 
that the Company will be able to manufacture its proposed products or that 
the Company's targeted customers will accept such products.  These factors 
raise substantial doubt about the Company's ability to continue as a going 

                                      7
<PAGE>

concern.  No adjustments have been made to reflect the recoverability or 
classification of recorded asset amounts or the classification of liabilities 
should the Company be unable to continue as a going concern.

(2)  INVENTORIES

The components of inventory at June 30, 1998 and December 31, 1997 are as
follows:

<TABLE>
<CAPTION>

                                             June 30, 1998  December 31, 1997
                                             -------------  -----------------
      <S>                                    <C>            <C>
      Raw Materials                             $  576,220       $572,276
      Finished Goods                               749,902        317,973
                                             -------------  -----------------
          Total                                 $1,326,122       $890,249
                                             -------------  -----------------

</TABLE>

(3)  PREFERRED STOCK WARRANTS

On May 28, 1998, the Company, in consideration of a guarantee for a $6.0 
million line of credit from a commercial institution, delivered warrants to 
Jericho II L.L.C. ("Jericho") to purchase 1,000,000 shares of convertible 
preferred stock ("the Preferred Stock") at a price equal to $2.5625 and 
having a term of 10 years ("the Warrants").  The Preferred Stock is 
convertible to Common Stock on a one-to-one basis, with such conversion rate 
to adjust to reflect dilutive issuances of equity securities by the Company 
and also to adjust for stock splits, dividends, combinations and similar 
events.  The Preferred Stock shall be entitled to five votes per share and 
shall vote together with the Common Stock in addition to having certain 
special approval rights.  The Preferred Stock has a liquidation preference 
equal to the purchase price per share.  The Warrants include a net exercise 
clause and the shares issuable on exercise shall be entitled to piggyback 
registration rights, subject to standard underwriter's cutback.  John G. 
Tramontana, Chairman of the Board, President and Chief Executive Officer of 
the Company, has a 50% ownership interest in Jericho.  


The line of credit is in the form of a demand note payable. Accordingly, the 
fair value of the Warrants of $958,000, determined using the Black-Scholes 
model, has been recognized in the accompanying consolidated condensed 
statement of operations for second quarter and the six months ended June 30, 
1998.

(4)  RECENTLY ISSUED ACCOUNTING PROUNCEMENTS

The Company has adopted Financial Accounting Standards Board Statement No. 130,
"Reporting Comprehensive Income".  FASB Concepts Statement No. 6 defines
comprehensive income as "the change in equity of a business enterprise during a
period from transactions and other events and circumstances from non-owner
sources.  It includes all changes in equity during a period except those
resulting from investments by owners and distributions to owners."
Comprehensive income is comprised of net income plus other comprehensive
income.  Other comprehensive income includes items 


                                       8
<PAGE>

previously recorded directly in equity under FASB Statement No. 52, "Foreign 
Currency Translation", FASB Statement No. 80, "Accounting for Future 
Contracts", FASB Statement No. 87, "Employers' Accounting for Pensions", and 
FASB Statement No. 115, "Accounting for Certain Investments in Debt and 
Equity Securities".

The Consolidated Balance Sheet has been restated to conform to the requirements
of this Statement by replacing "Cumulative translation adjustment" with
"Accumulated other comprehensive income" in the equity section.  In addition,
"Consolidated Statements of Comprehensive Income (Loss)" have been added to
this quarterly report for the quarters and six months ended June 30, 1998 and
1997.

The Company has adopted Financial Accounting Standards Board Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information", issued
in June 1997.  Since this is the initial year of application, the Company has
elected not to provide the interim period disclosures, as permitted by the
Statement.

In February 1998, the Financial Accounting Standards Board issued Statement No.
132, "Employers' Disclosures About Pensions and Other Postretirement Benefits".
This Statement, which is effective for fiscal years beginning after December
15, 1997, amends the disclosure requirements of Statements 87, 88, and 106.
Adoption of this standard is not expected to have a material impact on the
Company's financial statements or results of operations.

On June 16, 1998, the FASB issued Statement No. 133, "Accounting for 
Derivative Instruments and Hedging Activities", which is effective for fiscal 
years beginning after June 15, 1999. The Statement establishes accounting and 
reporting standards for derivative instruments and hedging activities. It 
requires that an entity recognize all derivatives as either assets or 
liabilities in the statement of financial position and measure those 
instruments at fair value. Adoption of this Statement is not expected to have 
a material impact on the Company's financial statements or results of 
operations.

                                       9
<PAGE>

                         BIGMAR, INC. AND SUBSIDIARIES

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

Bigmar, Inc. and subsidiaries, (the "Company") is engaged in manufacturing 
and marketing various pharmaceutical products in Europe.  Its strategy is to 
supply world markets with a full line of high quality, affordably priced, 
generic pharmaceutical products, focusing on oncology products.  The Company 
intends to manufacture, in its state of the art facilities in Switzerland, 
off-patent generic oncology drugs and additional oncology drugs as their 
patents expire. It will then market these products through pharmaceutical 
company partners in Europe and the United States.  Bigmar currently has 
distribution rights to more than 20 generic oncology products.

Bigmar was incorporated in Delaware in September 1995 and has three wholly 
owned subsidiaries: Bigmar Pharmaceuticals, SA, Bioren, SA and Bigmar 
Therapeutics, Inc.  Bigmar Pharmaceuticals and Bioren are both Swiss 
corporations and Bigmar Therapeutics is a Delaware corporation.

Certain statements under this caption constitute "forward-looking statements" 
within the meaning of the Private Securities Litigation Reform Act of 1995 
including, without limitation, statements regarding future cash requirements. 
Such forward-looking statements involve known and unknown risks, 
uncertainties, and other factors which may cause the actual results, 
performance or achievements of the Company, or industry results, to be 
materially different from any future results, performance or achievements 
expressed or implied in such forward-looking statements.  Such factors and 
risks include, but are not limited to, delays in product development, 
problems with clinical testing, failure to receive regulatory approvals, lack 
of proprietary rights, or changes in business strategy, as well as other 
risks described from time to time in the Company's filings with the 
Securities and Exchange Commission.

RESULTS OF OPERATIONS

Second quarter 1998 net sales amounted to $1.5 million, a 2% decrease from 
second quarter 1997.  Sales of IV Solutions increased approximately $60,000 
over the prior year, while sales of Oncology Products decreased by 
approximately $43,000.  Net sales were also negatively impacted by 
unfavorable foreign currency impacts of approximately $53,000.

Net sales for the six months ended June 30, 1998 amounted to $2.9 million, a 
10% decrease from the same period in 1997.  Sales of IV Solutions increased 
approximately $217,000 versus the previous year and sales of Raw Materials 
and Oncology Products decreased by approximately $400,000 and $43,000, 
respectively.  Unfavorable foreign currency impacts negatively impacted net 
sales by approximately $104,000.


                                       10
<PAGE>

Gross margin amounted to $.4 million or 29% for the second quarter of 1998 
versus $.3 million or 17% for the same period in 1997. Gross margin for the 
six months ended June 30, 1998 was $.8 million or 27% of net sales, compared 
to $.6 million or 19% for the same period last year. The improvement relates 
primarily to discontinuing the Raw Materials product line, which had low 
margins.

Operating expenses increased approximately $.7 million from second quarter 
1997 to second quarter 1998.  Research and development expenses increased by 
approximately $.5 million, due to increased personnel costs and increased 
activities surrounding the Company's continuing efforts to obtain FDA 
approval of its Swiss manufacturing facility and to develop new drug product 
formulations.  Selling, general and administrative expenses increased by 
approximately $.2 million, due to increased personnel costs.

Six month operating expenses increased $1.5 million from 1997 to 1998. 
Research and development costs increased by $1.1 million and selling, general 
and administrative costs increased by approximately $.1 million.  The R&D 
increase relates to increased personnel costs and increased activities with 
respect to the Company's efforts to obtain FDA approval of its manufacturing 
facility and its efforts to develop new drug products.  The SG&A increase is 
due to increased personnel costs.

Other income/(expense) for the six months ended June 30, 1998 decreased by 
approximately $145,000 from the 1997 amount, due primarily to sales of 
machinery and equipment in the first six months of 1997.

Interest expense increased $.2 million and $.3 million from the second 
quarter and six months, respectively, of 1997 to 1998, due to interest on 
convertible notes and interest on 

                                       11
<PAGE>

a line of credit and partly due to the fact that a portion of interest 
expense was capitalized in 1997, but not in 1998. Also during the second 
quarter of 1998, the Company recorded expense of $958,000 in conjunction with 
the issuance of preferred stock warrants to Jericho II L.L.C. ("Jericho") in 
exchange for Jericho's guarantee of a $6 million credit line with a 
commercial institution.

Foreign exchange losses amounted to approximately $15,000 in the second 
quarter of this year compared to zero in the prior year.  Foreign exchange 
losses for the six months ended June 30, 1998 were approximately $.3 million 
compared to zero for the same period during 1997.  The expense represents 
losses due to exchange rate fluctuations on certain intercompany accounts 
receivable denominated in Swiss francs.  The full year 1997 exchange rate 
fluctuations on these accounts receivable were accounted for by the Company 
in the fourth quarter, as the impact on the results of operations for the 
individual quarters of 1997 was not material.

As a result of all of the foregoing, the Company's net loss for the second 
quarter 1998 amounted to approximately $2.5 million or $0.59 per share, 
compared to $.8 million or $0.20 per share for the second quarter 1997.  Net 
loss for the six months ended June 30, 1998 was $4.6 million or $1.10 per 
share versus $1.5 million or $0.39 per share during the first six months of 
1997.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 1998 and December 31, 1997, the Company had cash and cash 
equivalents of $136,412 and $643,232, respectively.  The Company's working 
capital amounted to ($6.1) million and ($2.5) million at June 30, 1998 and 
December 31, 1997, respectively.  The Company has incurred and will continue 
to incur substantial expenditures for research and development activities 
related to bringing its products to commercial market.  The Company intends 
to devote significant additional funds to product development, formulation, 
clinical testing, manufacturing validation, product registration, and other 
activities required for regulatory review of generic oncological products.  
The amount required to complete such activities depends upon the outcome of 
regulatory reviews.  The regulatory bodies may require more testing than is 
currently planned by the Company.  There can be no assurance that the FDA or 
any foreign government agency will approve the Company's generic oncological 
products for sale or that these products will achieve market success.

Property, plant and equipment totaled approximately $17.0 million at June 30, 
1998 and $17.2 million at December 31, 1997.  Additions of approximately $1.3 
million were offset by depreciation ($.7 million) and foreign currency 
translation effects ($.8 million).

As of June 30, 1998, the Company had various notes, bonds, mortgages and 
other borrowings totaling approximately $16.2 million including $6.1 million 
that is short term in nature.  These monies were used to partially fund the 
acquisition of Bioren, to acquire, construct, and equip the manufacturing 
facility and to fund ongoing research and development and product 
registration activities.

                                       12
<PAGE>

On May 28, 1998, the Company, in exchange for the issuance of warrants to 
purchase convertible preferred stock, received a guarantee from Jericho II 
L.L.C. ("Jericho"), which allowed it to increase its existing $3.5 million 
line of credit with Citizens Bank of Saginaw, Michigan to $6.0 million.  
Jericho is a private investment company, 50% owned by the Company's principal 
shareholder and CEO, John Tramontana.  The line of credit is being used for 
ongoing research and development and general working capital purposes.

At this time the Company does not anticipate the Bigmar manufacturing 
facility in Barbengo, Switzerland will produce sales in sufficient volume to 
generate positive cash flow during 1998.  However, the Company anticipates 
that the line of credit, together with cash flow from operations, will be 
sufficient to fund its operations through the end of 1998.  As a result, the 
Company will be required to supplement its cash position through additional 
financing (debt or equity) or by entering into development, marketing, or 
other collaborative arrangements.  The Company anticipates supplementing its 
cash position during the third or fourth quarter of 1998 with additional 
financing through third party arrangements, although there can be no 
assurance that the Company will be able to obtain such additional financing 
or that such financing, if available, will be on acceptable terms.

The Swiss Federal Code of Obligation provides that at least 5% of a Swiss 
company's net income each year must be appropriated to a legal reserve until 
such time as this reserve is equal to 20% of the company's paid-in share 
capital.  In addition, 10% of any distribution made by a company in excess of 
a 5% dividend must also be appropriated to the legal reserve.  The reserve of 
up to 5% of share capital is not available for distribution to stockholders.

Changes in exchange rates between currencies may negatively impact the 
Company's results of operations, specifically, net sales and gross profit 
margins from international operations.  In addition, the dollar-value 
equivalent of anticipated cash flows could also be adversely affected.  When 
the Company determines that this risk has become significant, the Company may 
attempt to manage that risk by using hedging techniques.

YEAR 2000 ISSUE

Many computer systems currently record years in a two-digit format. Such 
systems, if not modified, will be unable to recognize and properly process 
information with dates beyond the year 1999. The potential problems arising 
out of this inability are commonly referred to as the "Year 2000 Issue" or 
"Y2K" and will affect virtually all companies, government agencies and other 
organizations to some degree.

During 1997, the Company performed an assessment of its computer systems to 
determine whether or not they were in compliance with Year 2000 requirements. 
The Swiss operations' computer systems were found to be in compliance with 
such requirements. The U.S. operations computer applications include an 
accounting package and a document management system. Although these systems 
do not yet comply with Y2K requirements, it has been determined to the best 
of management's knowledge and belief that the costs to bring them into 
compliance will not be material to the Company's business, operations, and 
financial condition.

The Company continues to evaluate the risks and costs associated with Y2K and 
does not believe that these costs will have a material adverse impact on its 
business, operations and financial condition. However, the impact of Y2K on 
the Company is not fully determinable and there can be no assurances that 
there will not be increased costs resulting therefrom or that such costs will 
not have a material impact on the Company's business, operations, and 
financial condition.

                                       13
<PAGE>

                         BIGMAR, INC. AND SUBSIDIARIES


PART II.  OTHER INFORMATION

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

The Company's Annual Meeting of Stockholders was held on June 30, 1998. The 
results of the voting were as follows:

Proposal 1:    Election of the Board of Directors of the Company

                     Nominee         Votes For          Votes Withheld
                     -------         ---------          --------------
               Massimo Pedrani       3,610,810               43,900
               Fabio A. Giovannini   3,610,810               43,900
               Bernard Kramer        3,610,810               43,900
               Michael K. Medors     3,610,710               44,000
               John R. Morris        3,610,710               44,000
               John G. Tramontana    3,610,810               43,900

Proposal 2:    Amendment of Certificate of Incorporation to increase number 
               of authorized Common Shares of the Corporation from 15,000,000
               to 20,000,000.


                        Votes For:           3,552,157
                    Votes Against:              78,553
                 Votes Abstaining:              24,000


Proposal 3:    Adoption of the 1997 Stock Option Plan

                        Votes For:           2,362,469
                    Votes Against:             122,933
                 Votes Abstaining:              12,075

Proposal 4:    Amendment to the 1997 Stock Option Plan increasing to 
               900,000 the number of Common Shares for which options may be
               granted.

                        Votes For:           2,629,769
                    Votes Against:             126,833
                 Votes Abstaining:              10,875

Proposal 5:    Ratification of KPMG Peat Marwick LLP as the Company's 
               independent public accountants for fiscal year 1998.

                        Votes For:           3,644,210
                    Votes Against:               3,650
                 Votes Abstaining:               6,850


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   27.1  Financial Data Schedule
(b)  10.58  Certificate of Amendment of Amended and Restated Certificate of
            Incorporation of Bigmar, Inc.
(c)  Reports on Form 8-K.
     10.57  Issuance of Warrants to Purchase Convertible Preferred Stock in
            Exchange for $6.0 Million Credit Line Guarantee


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<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.


August 14, 1998

                                           BIGMAR, INC.
                                           ------------
                                            REGISTRANT


                                            By:  /s/ William R. Ash, III
                                                 -------------------------
                                                 William R. Ash, III
                                                 CHIEF FINANCIAL OFFICER
                                                 (PRINCIPAL FINANCIAL OFFICER)













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