SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549

                                    FORM 10-Q


[X]  Quarterly report pursuant to section 13 or15(d) of the  Securities  
     Exchange Act of 1934 For the quarter ended December 31, 1997

                                    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 Number: 000-23531
                                            ---------


                                  AGRITOPE, INC.
             (Exact name of Registrant as specified in its charter)



        DELAWARE                                         93-0820945
(State of incorporation)                      (IRS EmployerIdentification No.)

     8505 SW Creekside Place
        Beaverton, Oregon                                97008-7108
(Address of principal executive offices)                 (Zip code)

                               (503) 670-7702
             (Registrant's telephone number, including area code)

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

     Number of shares of Common Stock, $.01 par value, outstanding as of 
December 31, 1997: 4,034,480



<PAGE>
                                 AGRITOPE, INC.


                          PART I. FINANCIAL INFORMATION

                                                                       Page No.
Item 1.  Financial Statements                                          --------

     Condensed Consolidated Balance Sheets
         at December 31, 1997 and September 30, 1997.................     2

     Condensed Consolidated Statements of Operations
         for the three months ended December 31, 1997 and 1996.......     3

     Condensed Consolidated Statements of Changes in Stockholders' Equity
         for the three months ended December 31, 1997................     4

     Condensed Consolidated Statements of Cash Flows
         for  the three months ended December 31, 1997 and 1996......     5

     Notes to Condensed Consolidated Financial Statements............     6


Item 2.  Management's Discussion and Analysis of Financial Condition
     and Results of Operations ......................................     9


                           PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K............................    11


                                   1

<PAGE>
<TABLE>
<CAPTION>

AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                  12/31/97                9/30/97
                                                                                  (Unaudited)
<S>                                                                             <C>                   <C>          
Assets
------
Current assets
Cash and cash equivalents (Note 2) ....................................         $   8,953,813        $        4,384
Marketable securities (Note 2) ........................................                     -                     -
Trade accounts receivable, net ........................................               452,593               617,359
Other receivables .....................................................                     -                 5,554
Inventories (Note 2) ..................................................             3,183,526             2,081,295
Prepaid expenses ......................................................                33,368               276,224
                                                                                 ------------          ------------
                                                                                   12,623,300             2,984,816

Property and equipment, net ...........................................             2,831,133             2,749,788
Patents and proprietary technology, net ...............................             1,341,113             1,276,692
Investment in affiliated companies (Note 3)............................               244,088               246,962
Other assets and deposits .............................................                40,599                26,797
                                                                                 ------------          ------------
                                                                                $  17,080,233        $    7,285,055

Liabilities and Stockholders' Equity
------------------------------------
Current liabilities
Accounts payable (Note 5)..............................................         $   1,241,993        $      100,945
Current portion of long-term debt......................................                 4,255                 4,255
Current portion of long-term lease liability...........................               347,000               341,304
Salaries, benefits and other accrued liabilities ......................             1,072,746               879,504
                                                                                 ------------          ------------
                                                                                    2,665,994             1,326,008

Long-term debt, less current portion...................................                13,509                14,569
Long-term lease liability, less current portion........................               347,104               450,805
Minority interest in consolidated subsidiaries (Note 5)................               603,853               730,947
Commitments and contingencies .........................................                     -                     -

Stockholders' equity (Note 5)
Preferred Stock, $.01 par value- 10,000,000 shares authorized
 no shares outstanding (Note 5)........................................                     -                     -
Common Stock, $.01 par value- 30,000,000 shares authorized
 4,034,480 and 2,690,776 shares outstanding, respectively..............                40,345                26,908
Additional paid-in capital ............................................            55,810,909            45,910,932
Accumulated deficit....................................................           (42,401,481)          (41,175,114)
                                                                                  -----------           ------------
                                                                                   13,449,773             4,762,726

                                                                                $  17,080,233        $    7,285,055

</TABLE>


                                      2

<PAGE>
<TABLE>
<CAPTION>


AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

                                                                                            Three Months Ended

                                                                                        12/31/97        12/31/96
<S>                                                                                  <C>              <C>          

Revenues
Product sales ..................................................................     $      2,277     $           -
Grants and contracts ...........................................................           14,014            25,796
                                                                                     ------------     -------------
                                                                                           16,291            25,796
Costs and expenses
Product costs ..................................................................            8,302                 -
Research and development expenses ..............................................          524,942           420,809
Selling, general and administrative expenses....................................          840,366           752,194
                                                                                     ------------     -------------
                                                                                        1,373,610         1,173,003

Loss from operations ...........................................................       (1,357,319)       (1,147,207)

Other income (expense), net
Interest income ................................................................              541                 -
Interest expense................................................................             (280)          (19,684)
Valuation loss (Note 3) ........................................................                -        (1,900,000)
Cost of debt conversion (Note 4) ...............................................                -        (1,216,654)
Other, net .....................................................................            3,597           (59,174)
                                                                                     ------------       ------------
                                                                                            3,858        (3,195,512)

Minority interest in subsidiary net loss .......................................          127,094           126,866
                                                                                     ------------     -------------

Net loss........................................................................      $(1,226,367)      $(4,215,853)

Net loss per share (basic and diluted)..........................................            $0.45             $1.57

Weighted number of shares outstanding ..........................................        2,719,987         2,690,776

</TABLE>

                                      3

<PAGE>
<TABLE>
<CAPTION>


AGRITOPE, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (Unaudited)

                                                    Number of          Common          Additional      Accumulated
                                                      Shares            Stock        Paid-in Capital     Deficit

<S>                                                  <C>                 <C>          <C>              <C> 

Balances at September 30, 1997 ..................    2,690,776           $26,908      $45,910,932      $(41,175,114)

Common stock issued in
 private placement (Note 5)......................    1,343,704            13,437        9,392,491                 -

Equity issuance costs ...........................            -                 -         (740,654)                -

Cash contribution from Epitope, Inc. ............            -                 -        1,248,140                 -

Net loss for the period..........................            -                 -                -        (1,226,367)
                                                  ------------     -------------     ------------     --------------

Balances at December 31, 1997 ...................    4,034,480           $40,345      $55,810,909      $(42,401,481)
</TABLE>


                                      4

<PAGE>
<TABLE>
<CAPTION>


AGRITOPE, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                                                                         Three Months Ended
                                                                                    12/31/97              12/31/96

<S>                                                                               <C>                    <C>    

Cash flows from operating activities
------------------------------------
Net loss ..............................................................           $(1,226,367)           $(4,215,853)
Adjustments to reconcile net loss
   to net cash used in operating activities:
Depreciation and amortization .........................................               207,876                86,780
Loss on sale of property ..............................................                 1,404                     -
(Increase) decrease in  receivables ...................................               170,320                73,696
Increase in inventories ...............................................            (1,102,231)             (529,453)
(Increase) decrease in prepaid expenses ...............................               242,856               (28,029)
(Increase) decrease in other assets and deposits ......................               (13,802)              124,614
Increase in accounts payable and accrued liabilities ..................               417,585               596,541
Common stock issued as compensation for services.......................                     -                 7,561
Compensation expense for stock option grants...........................                     -                10,416
Minority interest in subsidiary operating results......................              (127,094)              (58,528)
Valuation loss.........................................................                     -             1,900,000
Non-cash portion of cost of debt conversion............................                     -             1,149,054
Other, net.............................................................                     -                (1,198)
                                                                                 ------------          -------------
   Net cash used in operating activities...............................            (1,429,453)             (884,399)

Cash flows from investing activities
------------------------------------
Additions to property and equipment ...................................              (250,727)             (397,353)
Proceeds from sale of property ........................................                   100                     -
Expenditures for patents and proprietary technology ...................              (104,419)             (606,847)
Investment in affiliated companies.....................................                 2,874                     -
                                                                                 ------------          ------------
   Net cash used in investing activities...............................              (352,172)           (1,004,200)

Cash flows from financing activities
------------------------------------
Principal payments on long-term debt...................................                (1,060)                    -
Payments on long-term lease liability .................................               (98,005)                    -
Proceeds from issuance of stock (Note 5)...............................             8,665,274                     -
Cash contribution from Epitope, Inc. (Note 5)..........................             1,248,140             1,437,247
Accounts payable to Epitope, Inc. (Note 5).............................               916,705                     -
                                                                                 ------------          ------------
   Net cash provided by financing activities...........................            10,731,054             1,437,247

Net increase (decrease) in cash and cash equivalents ..................             8,949,429              (451,352)
Cash and cash equivalents at beginning of period ......................                 4,384               476,512
                                                                                 ------------          ------------
Cash and cash equivalents at end of period.............................          $  8,953,813        $       25,160

</TABLE>


                                    5

<PAGE>


AGRITOPE, INC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)


Note 1     The Company
----------------------

Agritope,  Inc. (the "Company" or "Agritope") utilizes  biotechnology to develop
and market  superior  new plants and  related  products.  Through its 61 percent
owned subsidiary,  Vinifera, Inc. ("Vinifera"),  Agritope is also engaged in the
business of propagation,  growing,  and distribution of grapevine plants.  Until
December 30,  1997,  Agritope was a wholly  owned  subsidiary  of Epitope,  Inc.
("Epitope").

The condensed financial  statements  included herein are unaudited;  however, in
the opinion of management, the interim data include all adjustments,  consisting
only of normal recurring  adjustments,  necessary for a fair presentation of the
financial  position and results of  operations  for the interim  periods.  These
condensed financial  statements should be read in conjunction with the full year
financial  statements  and notes thereto  included in the Company's  1997 Annual
Report to Stockholders.  Results of operations for the three-month  period ended
December 31, 1997 are not  necessarily  indicative  of the results of operations
expected for the full fiscal year.


Note 2     Summary of Significant Accounting Policies
-----------------------------------------------------

Basis of Presentation.  The accompanying  consolidated  financial  statements of
Agritope include the assets, liabilities,  revenues and expenses of Agritope and
its subsidiaries.  All significant  intercompany  transactions and balances have
been eliminated.

The  basis  of  presentation  of these  financial  statements  differs  from the
previously  issued  Agritope Group financial  statements  contained in Epitope's
Form 10-K for the fiscal  year 1996 and most recent  Form 10-Q  filings.  In the
previously  issued  financial  statements,  cash  and cash  equivalents  and the
related  interest  income  were  allocated  to  Agritope  in  connection  with a
contemplated  targeted  stock  transaction.  The  targeted  stock  proposal  was
subsequently  withdrawn by the Epitope board of  directors.  With respect to the
spin-off, these items will not be transferred to Agritope and therefore have not
been allocated to Agritope in these financial statements.

Inventories.  Inventories  consisted  principally of growing grapevine plants at
Vinifera. The components of inventory are summarized as follows:

                                                  12/31/97              9/30/97
                                                (Unaudited)

Work-in-process..............................    $1,271,429           $1,387,706
Finished goods...............................     1,912,097              693,589
                                                  ---------           ----------
                                                 $3,183,526           $2,081,295

 Net Loss Per Share. In February 1997, the Financial  Accounting Standards Board
issued Statement of Financial  Accounting  Standards No. 128, Earnings Per Share
("SFAS  128").  This new  standard is effective  for interim and annual  periods
ending after  December 15, 1997.  SFAS 128 requires the reporting of "basic" and
"diluted"  earnings per share ("EPS")  instead of "primary" and "fully  diluted"
EPS as required under current  accounting  principles.  Basic EPS eliminates the
common stock equivalents  considered in calculating primary EPS. Basic EPS under
SFAS 128 does not differ from the Company's previously reported EPS.


                                      6

<PAGE>


AGRITOPE, INC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
 (Unaudited)


Note 3   Investment in Affiliated Companies
-------------------------------------------

Agritope's investment in affiliated companies includes its 9 percent interest in
UAF,  Limited  Partnership,  a fresh  flower  distribution  operation  in Tampa,
Florida,  and its 19.5  percent  interest  in  Petals  USA,  Inc.  (Petals),  an
affiliate of a Canadian  fresh flower  wholesaler.  During the first  quarter of
fiscal  1997,  Agritope  determined  that the value of its  investment  in these
affiliated  companies  had more  than  temporarily  declined  and,  accordingly,
recorded a non-cash  charge to results of operations of $1.9 million  reflecting
the permanent  impairment in the value of its investment in these companies.  An
additional  charge of $358,000 was recorded in the fourth quarter of fiscal 1997
based on information  received in October 1997 that the majority owner of Petals
intended to either sell the business or cease  operations and liquidate  assets.
In November 1997 Petals ceased  operations and liquidated  assets.  All proceeds
from the liquidation were applied to outstanding debts of Petals.


Note 4   Convertible Notes
--------------------------

In November 1996,  Epitope  exchanged $3.4 million  principal amount of Agritope
convertible  notes for  250,367  shares of common  stock of Epitope at a reduced
exchange price of $13.50 per share. The exchange price had previously been fixed
at $19.53 per  share.  Accordingly,  Agritope  recognized  a non-cash  charge to
results of  operations  of $1.2 million in the quarter  ended  December 31, 1996
representing  the  conversion  expense.  Concurrent  with the  note  conversion,
Epitope made a $4.5 million capital contribution to Agritope.  On June 30, 1997,
Agritope paid in full the remaining $240,000 principal amount outstanding.


Note 5   Stockholder's Equity
-----------------------------

Agritope  Spin-off.  In July  1997,  Epitope's  board of  directors  approved  a
management  proposal to spin off  Agritope,  subject to obtaining  financing for
Agritope and the satisfaction of certain other conditions. On November 25, 1997,
the Agritope  Board of Directors  declared a stock dividend of 690,776 shares of
Agritope common stock to Epitope,  its sole  shareholder.  On December 30, 1997,
Epitope distributed 2,690,776 shares of Agritope common stock, representing 100%
of the  shares  then  outstanding,  to  Epitope  shareholders  on the basis of 1
Agritope  share for every 5 shares of Epitope  common  stock held as of December
26, 1997.  Net loss per share has been restated to reflect the stock dividend as
if it had  occurred on October 1, 1996.  On December  31,  1997,  Agritope  sold
1,343,704  shares of Agritope  common  stock in a private  placement  to certain
investors for an aggregate price of $9.4 million ($7 per share).

Effective  December 1, 1997, in anticipation of the spin-off,  Agritope  assumed
responsibility  for funding  its future  activities.  During the  quarter  ended
December 31, 1997,  Epitope  contributed cash of $1.2 million to fund operations
prior to December 1 and advanced  $917,000 to fund December  cash  requirements.
The advance was repaid in January  1998.  The Company  will not receive  further
funding from Epitope.

Delaware Reincorporation; Recapitalization. In November 1997, in connection with
the  spin-off of Agritope by Epitope,  Agritope  agreed to merge with  Agritope,
Inc.,  a newly  formed  Delaware  corporation.  The purpose of the merger was to
change the Company's domicile from Oregon to Delaware and increase the Company's
authorized  capital stock to 30 million  shares of common stock,  par value $.01
per share, and 10 million shares of preferred stock.

                                     7

<PAGE>


AGRITOPE, INC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
 (Unaudited)


Minority  Interest in  Subsidiary.  In January 1997, a minority  shareholder  in
Vinifera   contributed   $100,000  to  Vinifera  in   satisfaction  of  a  stock
subscription  agreement.  In June 1997,  Agritope sold 770,000  shares of common
stock of Vinifera to outside  parties for $1.5  million in cash.  In  accordance
with the terms of the related stock purchase  agreements,  Agritope  contributed
the  proceeds  of  these  stock  sales to  Vinifera's  capital.  These  sales of
previously  issued  shares of  Vinifera  common  stock  reduced  the  percentage
ownership by Agritope in Vinifera voting stock from 76 percent to 61 percent.


Note 6  Subsequent Event
------------------------

Series A Preferred Stock. On January 8, 1998, the Company sold 214,285 shares of
Series A Preferred  Stock (Series A. Stock) to a strategic  partner,  Vilmorin &
Cie, for an aggregate  price of $1.5 million ($7 per share).  Series A Stock has
preemptive  rights and the right to elect a director,  but  otherwise has rights
substantially  equivalent  to  Agritope  common  stock and is  convertible  into
Agritope common stock on a share-for-share basis, subject to adjustment upon the
occurrence of certain events.


                                    8

<PAGE>


Item 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS

The following discussion of operations and financial condition should be read in
conjunction  with  the  consolidated  financial  statements  and  notes  thereto
included  in the  Company's  1997  Annual  Report to  Shareholders  and with the
Financial  Statements  and Notes  thereto  included  in this Form 10-Q.  Certain
statements set forth below constitute  "forward-looking  statements"  within the
meaning  of  the  Private   Securities   Litigation  Reform  Act  of  1995.  The
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that 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 by the forward-looking
statements. These factors with respect to the Company include loss or impairment
of sources of capital; dependence on strategic partners;  uncertainties relating
to  patents  and   proprietary   information;   dependence  on  key   personnel;
technological  change  and  competition;   uncertainties  as  to  acceptance  of
genetically engineered products; and changes in laws or regulations. Given these
uncertainties,  readers  are  cautioned  not  to  place  undue  reliance  on the
forward-looking statements.

Agritope,  Inc. (the  "Company" or "Agritope")  consists of two units:  Agritope
Research and Development and Vinifera, Inc. ("Vinifera").  Agritope Research and
Development  uses  biotechnology  in the  development of new fruit and vegetable
plant varieties for sale to the fresh produce  industry.  To date,  Agritope has
not completed commercialization of its technology. A portion of the research and
development  efforts  conducted by Agritope  has been  performed  under  various
research grants and contracts.  Vinifera is engaged in the grapevine propagation
and distribution business.

In July 1997, the board of directors of Epitope, Inc. ("Epitope"), the Company's
former parent,  approved a management proposal to spin off Agritope,  subject to
obtaining   financing  for  Agritope  and  the  satisfaction  of  certain  other
conditions.  On December  30,  1997,  Epitope  distributed  2,690,776  shares of
Agritope common stock ,  representing  100% of the shares then  outstanding,  to
Epitope shareholders on the basis of one Agritope share for every five shares of
Epitope common stock held as of December 26, 1997. On December 31, 1997 Agritope
sold 1,343,704 shares of Agritope common stock in a private placement to certain
investors for an aggregate price of $9.4 million. On January 8, 1998, subsequent
to the end of the quarter, the Company sold 214,285 shares of Series A Preferred
Stock to a strategic partner, Vilmorin & Cie, for an aggregate of $1.5 million.

Agritope  and Epitope  entered  into certain  agreements  governing  the ongoing
relationship  between the companies  after the spin-off,  including a Separation
Agreement,  a Tax  Allocation  Agreement,  a Transition  Services and Facilities
Agreement and an Employee Benefits Agreement.  Pursuant to the Employee Benefits
Agreement,  Agritope has established replacement plans that effectively continue
to  provide  benefits  available  under  current  Epitope  benefit  plans.  As a
consequence  of the  spin-off  Epitope does not have any  ownership  interest in
Agritope and no longer provides funding for Agritope's activities.


Results of Operations
---------------------

Revenues. Total revenues decreased to $16,000 in the three months ended December
31, 1997 from $26,000 for the three months ended December 31, 1996,  principally
due to reduced  revenues from grants and contracts.  Vinifera made product sales
totaling  $2,000 for the three  months ended  December 31, 1997.  Such sales are
highly seasonal and generally  occur in the spring and summer planting  seasons.
Vinifera  commenced  commercial  stage  operations  in 1996  and  continued  its
marketing  efforts and  expansion of its  production  capacity and customer base
during 1997.  As of December 31, 1997,  Vinifera had firm orders  totaling  $2.4
million for delivery in the spring and summer of 1998 as compared to firm orders
of $821,000 as of December 31, 1996.

In the  remaining  months of fiscal 1998,  the Company  expects to complete work
under a research grant totaling $55,000.  In October 1997, the Company commenced
work under a three-year grant totaling $1.0 million from the U.S.  Department of
Commerce, of which approximately  one-third of the work will be completed in the
remainder of fiscal 1998. In addition,  one of the Company's strategic partners,
Vilmorin & Cie, has  committed to fund at least $1 million of research  projects
over the next three years.

                                      9

<PAGE>

Research and development  expenses.  Research and development expenses increased
by  $104,000  or 25 percent  in the three  months  ended  December  31,  1997 as
compared to the three months ended  December 31, 1996.  The higher  research and
development  costs in the current quarter reflect  increased  efforts to develop
and propagate crops containing  Agritope's  patented ethylene control technology
and  stepped-up  research  efforts to explore  the  potential  of certain  genes
obtained from the Salk Institute.

Selling,   general   and   administrative   expenses.   Selling,   general   and
administrative  expenses  increased by $88,000 or 12 percent in the three months
ended  December  31, 1997,  as compared to the three  months ended  December 31,
1996. The increase is primarily  attributable  to fees and expenses  incurred in
connection with  preparation for the Company's  commencement of operations as an
independent public company.

Other income  (expense),  net. Other income  (expense),  net was affected by two
significant  non-recurring charges totaling $3.1 million in the first quarter of
fiscal 1997.  Agritope  recorded a non-cash  charge to results of  operations of
$1.9 million, reflecting the permanent impairment in the value of its investment
in  affiliated  companies  (UAF and Petals).  Additionally,  conversion  of $3.4
million principal amount of Agritope convertible notes into Epitope common stock
at a reduced  price  resulted in a non-cash  charge to results of  operations of
$1.2 million.

Net loss.  Principally as a result of the $3.1 million of non-recurring  charges
in the quarter ended  December 31, 1996,  Agritope's  net loss decreased to $1.2
million or $.45 per share from a net loss of $4.2  million or $1.57 per share in
the quarter  ended  December  31, 1996.  Excluding  non-recurring  charges,  the
Company's  operating  loss in the more  recent  period  increased  $127,000 as a
result  of  increased   research  and  development  and  selling,   general  and
administrative costs referred to above.


Liquidity and Capital Resources

                                                     12/31/97           9/30/97
Cash and cash equivalents.....................     $8,953,813            $4,384
Working capital ..............................      9,957,306         1,658,808

At December 31, 1997, Agritope had working capital of $9.96 million, as compared
to working  capital of $1.66  million at  September  30,  1997.  The increase in
working  capital was  principally  attributable  to sale of 1,343,704  shares of
common  stock to  certain  foreign  investors  at a price of $7 per share for an
aggregate  sales price of $9.4 million.  Working capital also increased due to a
$1.1 million increase in Vinifera's  inventory of growing grapevine plants.  The
plants can be  maintained  in  greenhouses  or stored  outside for several years
during which time they continue to grow.  Inventory on hand at December 31, 1997
represents  grapevine  plants  expected  to be sold in the  spring and summer of
1998.

Expenditures  for property and equipment  were $ 251,000 during the three months
ended December 31, 1997, largely as a result of $206,000 in expenditures for the
Company's new research and administrative  facilities to which the Company plans
to move early in the third  quarter of fiscal 1998.  During the first quarter of
1997,  Agritope  made a  one-time  cash  payment  of  $590,000  to an officer of
Agritope,  who is the co-inventor of Agritope's ethylene control technology,  in
exchange for all rights to future  payments.  Agritope has also acquired certain
rights to certain proprietary genes for which it made payments of $75,000 in the
quarter  ended  December  31,  1997.  Such  amounts are included in "Patents and
proprietary  technology,  net." Agritope's  investment in affiliated  companies,
obtained in connection  with the  divestiture of its fresh flower  packaging and
distribution  business,  was reduced by a non-cash charge of $1.9 million in the
first quarter of 1997 reflecting the permanent  impairment in the value of these
investments.

Historically,  Agritope's  requirements  for  operations,  working  capital  and
business   expansion  have  been  funded  by  receipts  of  cash  from  Epitope,
supplemented by $5.4 million principal amount of convertible notes, $1.6 million


                                     10

<PAGE>

of investments in Vinifera by minority shareholders, and $1.0 million in funding
from  strategic  partners and other  research  grants.  On December 1, 1997,  in
anticipation of its spin-off from Epitope,  Agritope assumed  responsibility for
funding its future  activities.  During the quarter  ended  December  31,  1997,
Agritope  received a capital  contribution  of $1.2 million from Epitope to fund
cash  requirements  during the  months of  October  and  November  and  advanced
$917,000 for December cash requirements. The advance was repaid in January 1998.

On December 30, 1997, Epitope distributed 100% of Agritope's  outstanding common
stock to  shareholders  of Epitope.  On December  31,  1997,  Agritope  sold 1.3
million shares of common stock in a private placement  transaction at a price of
$7 per share for aggregate proceeds of $9.4 million.  In January 1998.  Agritope
sold 214,285  shares of Series A Preferred  Stock at a price of $7 per share for
aggregate  proceeds of $1.5  million and repaid to Epitope  $976,000 of advances
for cash  requirements  after  December 1, 1997.  See Notes 5 and 6 to Condensed
Consolidated Financial Statements.

Agritope  expects to continue to require  funds to support  its  operations  and
research  activities.  It intends to utilize cash reserves,  cash generated from
sales of  products,  and  research  funding  from  strategic  partners and other
research  grants to provide  the  necessary  funds.  Agritope  may also  receive
additional funds from the sale of equity securities.  Additional capital may not
be  available  on  acceptable  terms,  if at all,  and the failure to raise such
capital would have a material adverse effect on Agritope's  business,  financial
condition, and results of operations.

Management  presently  anticipates that Agritope has sufficient funds on hand to
finance  operations  as a separate  business  for at least two  years,  based on
currently  estimated revenues and expenses.  Because this estimate is based on a
number of  factors,  many of which are beyond its  control,  Agritope  cannot be
certain that this  estimate  will prove to be  accurate,  and to the extent that
Agritope's operations do not progress as anticipated,  additional capital may be
required.

Agritope  currently  rents a  portion  of  Epitope's  office  and  research  and
development  facilities.  As soon as  practicable,  Agritope  will  relocate  to
separate  leased  facilities.  Management  estimates  that the cost to relocate,
including leasehold improvements, will not exceed $1.5 million.

                         PART II. OTHER INFORMATION

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits
         (27)  Financial Data Schedule

(b)      Reports on Form 8-K
         None.



                                    11

<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.



                                  AGRITOPE, INC., a Delaware corporation


February  17, 1998                /s/ Adolph J. Ferro
------------------                --------------------------------------------
Date                              Adolph J. Ferro
                                  Chairman, President, Chief Executive Officer
                                  and Director
                                  (Principal Executive Officer)




February 17, 1998                 /s/ Gilbert N. Miller
----------------                 --------------------------------------------
Date                              Gilbert N. Miller
                                  Executive Vice President, 
                                  Chief Financial Officer and Director
                                  (Principal Financial and Accounting Officer)


                                    12 
<PAGE>


                              EXHIBIT INDEX

Exhibit                                     Description
-------                                     -----------

27.                                         Financial Data Schedule


                                     13