SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q


[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
    Act of 1934

                      For the quarter ended March 31, 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 Number 000-23531



                                  AGRITOPE, INC

             (Exact name of Registrant as specified in its charter)



        DELAWARE                                         93-0820945
(State of incorporation)                    (I.R.S. Employer Identification No.)

16160 SW Upper Boones Ferry Road
        Portland, Oregon                                       97224-7744
(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 [X] No [ ]
    
     Number of shares of Registrant's Common Stock, $.01 par value, 
       outstanding as of March 31, 1998: 4,037,219

<PAGE>


                               AGRITOPE, INC.

                        PART I. FINANCIAL INFORMATION

                                                                       Page No.
Item 1.  Condensed Consolidated Financial Statements


     Agritope, Inc. and Subsidiaries

     Condensed Consolidated Balance Sheets
         at September 30, 1997 and March 31, 1998.......................... 2

     Condensed Consolidated Statements of Operations
         for the three and six months ended March 31, 1998 and 1997........ 3

     Condensed Consolidated Statements of Changes in Stockholders' Equity
         for the six months ended March 31, 1998........................... 4

     Condensed Consolidated Statements of Cash Flows
         for the six months ended March 31, 1998 and 1997.................. 5

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


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


                           PART II. OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders...............12

Item 6.  Exhibits and Reports on Form 8-K..................................12

                                      1

<PAGE>



AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>                                                                             <C>                  <C>

                                                                                   3/31/98                 9/30/97
                                                                                  (Unaudited)

Assets
Current assets
Cash and cash equivalents (Note 2) ....................................         $   7,081,155        $        4,384
Trade accounts receivable, net ........................................               181,076               617,359
Other accounts receivable .............................................                 2,138                 5,554
Inventories (Note 2) ..................................................             4,121,376             2,081,295
Prepaid expenses ......................................................               332,788               276,224
                                                                                 ------------          ------------
                                                                                   11,718,533             2,984,816

Property and equipment, net ...........................................             3,177,400             2,749,788
Patents and proprietary technology, net ...............................             1,487,206             1,276,692
Investment in affiliated companies (Note 3)............................               235,753               246,962
Other assets and deposits .............................................                40,599                26,797
                                                                                 ------------          ------------
                                                                                $  16,659,491        $    7,285,055
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable (Note 5)..............................................         $     302,880        $      100,945
Current portion of long-term debt......................................                 4,255                 4,255
Current portion of long-term lease liability...........................               352,704               341,304
Deposits on customer orders............................................             1,071,690               389,931
Salaries, benefits and other accrued liabilities ......................               441,913               879,504
                                                                                 ------------          ------------
                                                                                    2,173,442             1,326,008


Long-term debt, less current portion...................................                12,435                14,569
Long-term lease liability, less current portion........................               305,866               450,805
Minority interest in consolidated subsidiary (Note 5)..................               476,250               730,947
Commitments and contingencies .........................................

Stockholders' equity (Note 5)
Preferred stock, $.01 par value- 10,000,000 shares authorized
 Series A 214,285 shares outstanding (Note 5)..........................                 2,143                     -
Common stock, $.01 par value- 30,000,000 shares authorized
 4,037,219 and 2,690,776 shares outstanding, respectively..............                40,372                26,908
Additional paid-in capital ............................................            57,072,599            45,910,932
Accumulated deficit....................................................           (43,423,616)          (41,175,114)
                                                                                  -----------           ------------
                                                                                   13,691,498             4,762,726

                                                                                $  16,659,491        $    7,285,055

</TABLE>

                                      2
<PAGE>



AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
<S>                                               <C>              <C>               <C>             <C>    

                                                        Three Months Ended                   Six Months Ended

                                                       3/31/98           3/31/97          3/31/98           3/31/97
Revenues
Product sales ................................... $    179,780     $     163,634     $    182,057     $     163,364
Grants and contracts ............................       57,801            62,526           71,815            88,322
                                                   -----------       -----------       ----------       -----------
                                                       237,581           226,160          253,872           251,686
Costs and expenses
Product costs ...................................      160,362           112,146          168,664           112,146
Research and development costs ..................      550,350           364,145        1,075,292           784,954
Selling, general and administrative expenses.....      769,668           660,956        1,610,034         1,413,150
                                                   -----------       -----------       ----------       -----------
                                                     1,480,380         1,137,247        2,853,990         2,310,250

Loss from operations ............................   (1,242,799)         (911,087)      (2,600,118)       (2,058,294)

Other income (expense), net
Interest income..................................       93,326                 -           93,867                 -
Interest expense.................................         (265)           (4,187)            (545)          (23,871)
Valuation loss (Note 3) .........................            -                 -                -        (1,900,000)
Cost of debt conversion (Note 4).................            -                 -                -        (1,216,654)
Other, net.......................................            -            (7,104)           3,597             2,060
                                                   -----------       ------------      ----------       -----------
                                                        93,061           (11,291)          96,919        (3,138,465)

Minority interest in subsidiary net loss......... $    127,603     $      49,017     $    254,697     $     107,545

Net loss......................................... $ (1,022,135)    $    (873,361)    $ (2,248,502)    $  (5,089,484)

Net loss per share (basic and diluted)........... $      (0.25)    $      (0.32)     $      (0.67)    $      (1.89)

Weighted average number of
     shares outstanding..........................    4,034,510         2,690,776        3,370,026         2,690,776

</TABLE>


                                      3
<PAGE>


AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY 
(Unaudited)
<TABLE>
<CAPTION>
<S>                                                <C>                 <C>            <C>              <C> 

                                                     Preferred         Common          Additional      Accumulated
                                                       Stock            Stock        Paid-in Capital     Deficit

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

Compensation expense for stock option grants.....            -                            103,140                 -

Common stock issued as compensation (2,739 shares)           -                27           12,641                 -

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

Preferred stock issued in
 private placement  (214,285 shares) (Note 5)....        2,143                 -        1,497,852                 -

Equity issuance costs ...........................            -                 -       (1,092,597)                -

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

Net loss for the period..........................            -                 -                -        (2,248,502)
                                                  ------------     -------------     ------------     --------------
Balances at March 31, 1998 ......................       $2,143           $40,372      $57,072,599      $(43,423,616)

</TABLE>
                                      4

<PAGE>


AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                            <C>                   <C> 

                                                                                           Six Months Ended

                                                                                       3/31/98             3/31/97

Cash flows from operating activities
Net loss ..............................................................         $  (2,248,502)       $   (5,089,214)
Adjustments to reconcile net loss
   to net cash used in operating activities:
Depreciation and amortization .........................................               422,573               226,755
(Gain) loss on sale of property........................................                 1,404                     -
(Increase) decrease in accounts receivable ............................               439,700               (86,021)
Increase in inventories ...............................................            (2,040,081)             (974,285)
Increase in prepaid expenses ..........................................               (56,564)              (29,596)
(Increase) decrease in other assets and deposits ......................               (13,801)               76,996
Increase (decrease) in deposits on customer orders.....................               681,759               274,739
Increase (decrease) in accounts payable and accrued liabilities .......               154,275                (9,096)
Common stock issued as compensation for services.......................                     -                14,564
Compensation expense for stock option grants...........................               103,140                20,832
Minority interest in subsidiary operating results......................              (254,697)             (107,545)
Valuation loss.........................................................                     -             1,900,000
Non-cash portion of cost of debt conversion............................                     -             1,149,054
Other, net.............................................................                     -                 5,136
                                                                                 ------------          ------------
Net cash used in operating activities..................................            (2,798,126)           (2,445,639)

Cash flows from investing activities
Additions to property and equipment ...................................              (777,538)           (1,002,576)
Proceeds from sale of property ........................................                 9,683                     -
Expenditures for patents and proprietary technology ...................              (294,248)             (692,687)
                                                                                 -------------         -------------
Net cash used in investing activities..................................            (1,050,894)           (1,695,263)

Cash flows from financing activities
Issuance of long-term debt.............................................                     -                10,601
Principal payments on long-term debt...................................                (2,134)                    -
Payments on long-term lease obligation.................................              (122,331)                    -
Proceeds from issuance of stock (Note 5)...............................             9,813,326
Minority interest investment in subsidiary (Note 5)....................                     -               100,000
Cash contribution from Epitope Inc. (Note 5)...........................             1,248,140             3,616,118
                                                                                 ------------          ------------
Net cash provided by financing activities..............................            10,937,001             3,726,719

Net increase (decrease) in cash and cash equivalents ..................             7,076,771              (424,183)
Cash and cash equivalents at beginning of period ......................                 4,384               476,512
                                                                                 ------------          ------------
Cash and cash equivalents at end of period.............................         $   7,081,155        $       52,329
</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.  Until December 30, 1997,
Agritope was a wholly owned subsidiary of Epitope, Inc. ("Epitope"). Through its
61  percent-owned  subsidiary,  Vinifera,  Inc.  ("Vinifera"),  Agritope is also
engaged in the business of propagation,  growing,  and distribution of grapevine
plants. Agritope's wholly owned subsidiary, Agrimax, Inc. ("Agrimax"),  formerly
operated a fresh cut flower business and currently holds a minority  interest in
a Florida-based fresh flower distribution business. See Note 3.

The condensed  consolidated  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 and
six-month  periods  ended March 31, 1998 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  Epitope  board  of  directors
subsequently  withdrew  the targeted  stock  proposal and proposed a spin-off to
stockholders.  See Note 5. With  respect to the  spin-off,  these items were not
transferred  to Agritope and  therefore  have not been  allocated to Agritope in
these financial statements.  Certain  reclassifications  have been retroactively
reflected in the financial statements to conform to current presentation.

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

                                                3/31/98              9/30/97
                                              (Unaudited)

Work-in-process.....................          $  164,789           $1,387,706
Finished goods......................           3,956,587              693,589
                                               ---------           ----------
                                              $4,121,376           $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 former  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.  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  USA,  Inc.  ("Petals"),  a fresh  flower
distribution  company in which  Agritope held a minority  interest,  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   Stockholders' 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.

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.

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

                                      7
<PAGE>

AGRITOPE,  INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
 (Unaudited)

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.

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.

                                      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,  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.

                                      9

<PAGE>


Results of Operations

Revenues.  Total  revenues for the second quarter and six months ended March 31,
1998 were  $238,000  and  $254,000,  respectively,  as compared to $226,000  and
$252,000  for  the  corresponding  periods  in  the  prior  year.  Revenues  are
summarized below:
<TABLE>
<CAPTION>
<S>                                                                <C>                         <C> 

Three months ended March 31 (in thousands, except %)                        1998                       1997
                                                                      Dollars    Percent        Dollars    Percent
Product sales-
Grape plant sales.........................................           $   180       76%           $   164     72%

Grants and contracts......................................                58       24                 62     28
                                                                     -------     ----            -------    ---
                                                                     $   238      100%            $  226    100%

Six months ended March 31 (in thousands, except %)                          1998                       1997
                                                                      Dollars    Percent        Dollars    Percent
Product sales-
Grape plant sales.........................................           $   182       72%           $   164      65%

Grants and contracts......................................                72       28                 88      35
                                                                     -------     ----            -------    ----
                                                                     $   254      100%             $ 252    100%
</TABLE>

Sales by the Company's grape plant propagation  subsidiary (Vinifera) 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 March 31, 1998,  Vinifera had firm orders totaling $3.5 million,  of which
$2.7 million call for delivery  before  September 30, 1998.  The remaining  $0.8
million orders call for delivery in fiscal 1999. As of March 31, 1997,  Vinifera
had firm orders of $1.3  million for  delivery in the spring and summer of 1998.
Vinifera  requires  customers to make  deposits  upon placing  orders for future
delivery.  Such deposits  totaled $1.1 million as of March 31, 1998, as compared
to $0.4 million on September 30, 1997 and $0.7 million on March 31, 1997.

In the  second  quarter  of fiscal  1998,  the  Company  completed  work under a
research  grant  totaling  $55,000.  The Company has also 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 is planned  for  completion  in the
remainder of fiscal 1998. In addition,  one of the Company's strategic partners,
Vilmorin & Cie, has committed to fund at least $1.0 million of research projects
over the next three years.

Research and development  expenses.  Research and development expenses increased
by $ 186,000 or 51% and $290,000, or 37%, respectively, for the three months and
six months ended March 31, 1998 as compared to the second  quarter and first six
months of fiscal 1997. The higher  research and  development  costs in thesecond
quarter of fiscal 1998 reflect  increased efforts to develop and propagate crops
containing Agritope's patented ethylene control technology,  stepped-up research
efforts  to  explore  the  potential  of certain  genes  obtained  from the Salk
Institute  and  costs  associated  with  the  Company's  move to new  facilities
following the spin-off.

Selling,   general   and   administrative   expenses.   Selling,   general   and
administrative  expenses increased by $108,000 or 16% in the current quarter and
$197,000 or 14%,  in the six months  ended  March 31,  1998,  as compared to the
quarter and six months  ended March 31,  1997.  The  increase in the more recent
period is primarily  attributable  to fees and expenses  incurred in  connection
with preparation for the Company's  commencement of operations as an independent
public company and costs of moving to new facilities.

                                      10
<PAGE>


Other income  (expense),  net. In the quarter ended March 31, 1998,  the Company
realized  interest income of $93,000 from investment of proceeds from the recent
private  placements  of  equity  securities.  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. As compared to the second quarter of fiscal 1997,  Agritope's net loss
increased from $873,000 ($0.32 per share) to $ 1.0 million ($0.25 per share) for
the quarter  ended March 31, 1998 as a result of increased  activity  levels and
costs  associated with the spin-off and subsequent  move to new facilities.  For
the six months  ended March 31,  1998,  the net loss  decreased  to $2.2 million
($0.67 per share) from $5.1 million ($1.89 per share) principally as a result of
the $3.1  million of  non-recurring  charges in the quarter  ended  December 31,
1996. Excluding  non-recurring charges, the Company's operating loss in the most
recently  completed  six  month  period  increased  $276,000  as a result of the
increased research and development and selling, general and administrative costs
referred to above.


Liquidity and Capital Resources

                                               3/31/98               9/30/97
Cash and cash equivalents..................  $7,081,155            $    4,384
Working capital ...........................   9,545,091             1,658,808

         At March 31, 1998,  Agritope had working  capital of $9.55 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 and 214,285 shares of preferred stock to certain foreign  investors
at a price of $7 per  share  for an  aggregate  sales  price  of $10.9  million.
Working  capital also  increased  due to a $2.0 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 and in 1999.

Expenditures  for property and  equipment  were $ 778,000  during the six months
ended March 31, 1998,  largely as a result of $670,000 in  expenditures  for the
Company's new research and administrative  facilities to which the Company moved
in March 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 makes payments of $75,000 per quarter. 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
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 to  foreign  investors  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 to a

                                      11
<PAGE>

foreign  buyer  at a price  of $7 per  share,  for  aggregate  proceeds  of $1.5
million,  and repaid Epitope's  advances for cash requirements after December 1,
1997.
See Note 5 to Condensed Consolidated Financial Statements.

Agritope  expects to  continue  to  require  significant  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.


                           PART II. OTHER INFORMATION

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

         The company  held its Annual  Meeting of  Stockholders  on February 23,
         1998. Voting shareholders took the following actions at the meeting:

         1.   The common  stockholders  voted to elect the following nominees 
              to the Company's Board of Directors to serve as Class I Directors
              until the 2001 Annual Meeting

                                     Votes for                 Votes Withheld
              Adolph J. Ferro        3,901,977                         42,247
              Gilbert N. Miller      3,913,770                         30,454

         2.   The Series A Preferred  shareholder  voted to elect the  following
              nominee to serve on the  Company's  Board of  Directors  until the
              1999 Annual Meeting.

                                     Votes for                 Votes Withheld
              Pierre Lefebvre          214,285                           None


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits
         (27)  Financial Data Schedule

(b)      Reports on Form 8-K

         On  January  13,  1998,  the  Company  filed a report on Form 8-K dated
         December 31, 1997,  to report under Item 9, private  sales of 1,343,704
         shares of its common stock to certain foreign investors on December 31,
         1997,  at a price of $7 per share,  for an  aggregate  purchase of $9.4
         million,  and a private  sale of 214,285  shares of Series A  Preferred
         Stock  to  Vilmorin  & Cie,  a  majority  owned  subsidiary  of  Groupe
         Limagrain Holdings,  Chappes, France, on January 7, 1998, at a price of
         $7 per share, for an aggregate purchase price of $1.5 million.

         On February  27,  1998,  the  Company  filed a report on Form 8-K dated

                                      12  
<PAGE>

         February 23, 1998, to report under Item 2 engagement of Arthur Andersen
         LLP as the Company's  certifying  accountant and dismissal of its prior
         independent accountant, Price Waterhouse LLP.





                                   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.


May 15, 1998                        /s/ ADOLPH J. FERRO
------------                        --------------------
Date                                Adolph J. Ferro
                                    Chairman, President and 
                                    Chief Executive Officer
                                    (Principal Executive Officer)




May 15, 1998                        /s/ GILBERT N. MILLER
------------                        ----------------------
Date                                Gilbert N. Miller
                                    Executive Vice President and Chief 
                                    Financial Officer
                                    (Principal Financial and Accounting Officer)


                                      13
<PAGE>


                                  EXHIBIT INDEX

Exhibit         Description                                          Page

27.             Financial Data Schedule                               15


                                      14