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 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 NUMBER 000-23531
                        --------------------------------


                                  AGRITOPE, INC
                                  -------------

             (Exact name of Registrant as specified in its charter)


        DELAWARE                                        93-0820945
        --------                                        ----------
(State of incorporation)                     (IRS 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 June 30, 1998: 4,040,960

<PAGE>

                                 AGRITOPE, INC.

                          PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>

                                                                                                           PAGE NO.
                                                                                                           --------
ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    <S>                                                                                                     <C>   
     AGRITOPE, INC. AND SUBSIDIARIES

     Condensed Consolidated Balance Sheets
         at September 30, 1997 and June 30, 1998................................                             3

     Condensed Consolidated Statements of Operations
         for the three  months and nine months ended June 30, 1998 and 1997.....                             4

     Condensed Consolidated Statements of Changes in Stockholders' Equity
         for the nine months ended June 30, 1998................................                             5

     Condensed Consolidated Statements of Cash Flows
         for the nine months ended June 30, 1998 and 1997.......................                             6

     Notes to Condensed Financial Statements....................................                             7


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
     AND RESULTS OF OPERATIONS .................................................                            10


                           PART II. OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.......................................                            14


</TABLE>
<PAGE>


AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                   6/30/98                 9/30/97
                                                                                   -------                 -------
                                                                                  (Unaudited)
<S>                                                                            <C>                  <C>    
ASSETS
Current assets
Cash and cash equivalents (Note 2) ....................................         $   5,584,998        $        4,384
Trade accounts receivable, net ........................................               395,447               617,359
Other accounts receivable .............................................                10,175                 5,554
Inventories (Note 2) ..................................................             4,765,642             2,081,295
Prepaid expenses ......................................................               243,929               276,224
                                                                                 ------------          ------------
                                                                                   11,000,191             2,984,816

Property and equipment, net ...........................................             3,997,892             2,749,788
Patents and proprietary technology, net ...............................             1,610,730             1,276,692
Investment in affiliated companies (Note 3)............................                96,795               246,962
Other assets and deposits .............................................                40,599                26,797
                                                                                 ------------          ------------
                                                                                $  16,746,207        $    7,285,055
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable ......................................................         $     147,090        $      100,945
Current portion of long-term debt......................................                 4,255                 4,255
Current portion of long-term lease liability...........................               358,404               341,304
Deposits on customer orders............................................             1,202,902               389,931
Salaries, benefits and other accrued liabilities ......................               351,733               489,573
                                                                                 ------------          ------------
                                                                                    2,064,384             1,326,008


Long-term debt, less current portion...................................                11,344                14,569
Long-term lease liability, less current portion........................               213,410               450,805
Minority interest in consolidated subsidiary (Note 5)..................             2,056,478               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 ..................................                 2,143                     -
Common stock, $.01 par value- 30,000,000 shares authorized
 4,040,960 and 2,690,776 shares outstanding, respectively..............                40,410                26,908
Additional paid-in capital ............................................            57,270,991            45,910,932
Accumulated deficit....................................................           (44,912,953)          (41,175,114)
                                                                                  -----------           ------------
                                                                                   12,400,591             4,762,726

                                                                                $  16,746,207        $    7,285,055


</TABLE>
<PAGE>



AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>

                                                          THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                          ------------------                 -----------------

                                                       6/30/98           6/30/97          6/30/98           6/30/97
                                                       -------           -------          -------           -------
<S>                                              <C>              <C>               <C>              <C>           
Revenues
Product sales ................................... $    663,562     $     402,605     $    845,619     $     566,239
Grants and contracts ............................            -            13,185           71,815           101,507
                                                   -----------       -----------       ----------        ----------
                                                       663,562           415,790          917,434           667,746
Costs and expenses
Product costs ...................................      648,111           436,197          816,775           548,343
Research and development costs ..................      745,385           465,436        1,820,677         1,250,390
Selling, general and administrative expenses.....      884,715           850,893        2,494,749         2,264,043
                                                   -----------       -----------       ----------        ----------
                                                     2,278,211         1,752,526        5,132,201         4,062,776

Loss from operations ............................   (1,614,649)       (1,336,736)      (4,214,767)       (3,395,030)

Other income (expense), net
Interest income..................................       68,985                 -          162,852                 -
Interest expense.................................         (248)           (1,139)            (793)          (25,010)
Valuation loss (Note 3) .........................            -                 -                -        (1,900,000)
Cost of debt conversion (Note 4).................            -                 -                -        (1,216,654)
Other, net.......................................     (128,650)         (128,776)        (125,053)         (126,716)
                                                   ------------      ------------      -----------      ------------
                                                       (59,913)         (129,915)          37,006        (3,268,380)

Minority interest in subsidiary net loss......... $    185,225     $     100,765     $    439,922     $     208,310

Net loss......................................... $ (1,489,337)    $  (1,365,886)    $ (3,737,839)    $  (6,455,100)

Net loss per share (basic and diluted)........... $       (.37)    $       (.51)     $      (1.04)    $      (2.40)

Weighted average number of
     shares outstanding..........................    4,037,260         2,690,776        3,592,437         2,690,776

</TABLE>
<PAGE>


AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
 (UNAUDITED)
<TABLE>
<CAPTION>

                                                     PREFERRED           COMMON         ADDITIONAL      ACCUMULATED
                                                       STOCK             STOCK        PAID-IN CAPITAL     DEFICIT
                                                     ---------          -------       ---------------   ------------
<S>                                                <C>                  <C>          <C>              <C>   
Balances at September 30, 1997 ..................   $        -           $26,908      $45,910,932      $(41,175,114)

Compensation expense for stock option grants.....            -                 -          287,280                 -

Common stock issued as compensation (6,480 shares)           -                65           27,801                 -

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 ...........................            -                 -       (1,093,505)                -

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

Net loss for the period..........................            -                 -                -        (3,737,839)
                                                  ------------     -------------     ------------     --------------
Balances at June 30, 1998 .......................       $2,143           $40,410      $57,270,991      $(44,912,953)

</TABLE>
<PAGE>


AGRITOPE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                           NINE MONTHS ENDED
                                                                                           -----------------

                                                                                       6/30/98             6/30/97
                                                                                       -------             -------
<S>                                                                            <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ..............................................................         $  (3,737,839)       $   (6,455,100)
Adjustments to reconcile net loss
   to net cash used in operating activities:
Depreciation and amortization .........................................               665,531               383,302
Loss on sale of property...............................................                    54                     -
Decrease in accounts receivable .......................................               217,291               109,059
Increase in inventories ...............................................            (2,684,347)           (1,477,761)
Increase (decrease) in prepaid expenses ...............................                32,295               (23,101)
Increase in other assets and deposits .................................               (13,802)                    -
Increase in deposits on customer orders................................               812,971               188,221
Increase (decrease) in accounts payable and accrued liabilities .......               (91,695)              209,682
Common stock issued as compensation for services.......................                27,866                23,437
Compensation expense for stock option grants...........................               287,280                20,832
Minority interest in subsidiary operating results......................              (439,922)             (208,310)
Valuation loss.........................................................                     -             1,900,000
Non-cash portion of cost of debt conversion............................                     -             1,149,054
Other, net.............................................................               150,167               121,234
                                                                                 ------------          ------------
Net cash used in operating activities..................................            (4,774,150)           (4,059,451)

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment ...................................            (1,791,312)           (1,471,276)
Proceeds from sale of property ........................................                11,033                     -
Expenditures for patents and proprietary technology ...................              (467,448)             (853,718)
                                                                                 -------------         -------------
Net cash used in investing activities..................................            (2,247,727)           (2,324,994)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt.............................................                     -                20,887
Principal payments on long-term debt...................................                (3,225)             (241,019)
Payments on long-term lease obligation.................................              (220,295)                    -
Proceeds from issuance of stock (Note 5)...............................             9,812,418                     -
Minority interest investment in subsidiary (Note 5)....................             1,765,453             1,640,000
Cash contribution from Epitope Inc. (Note 5)...........................             1,248,140             5,332,632
                                                                                 ------------          ------------
Net cash provided by financing activities..............................            12,602,491             6,752,500

Net increase (decrease) in cash and cash equivalents ..................             5,580,614               368,055
Cash and cash equivalents at beginning of period ......................                 4,384               476,512
                                                                                 ------------          ------------
Cash and cash equivalents at end of period.............................         $   5,584,998        $      844,567


</TABLE>
<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
64  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  consolidated  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  nine-month  periods  ended  June 30,  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  also  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:

                                                   6/30/98              9/30/97
                                                   -------              -------
                                                 (Unaudited)

Work-in-process.........................        $ 1,533,963          $ 1,387,706
Finished goods..........................          3,231,679              693,589
                                                  ---------           ----------
                                                $ 4,765,642          $ 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.


<PAGE>


AGRITOPE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 (UNAUDITED)

SUPPLEMENTAL CASH FLOW INFORMATION.  In June 1998, Agritope cancelled $4,000,000
of working capital loans to Vinifera in exchange for 2,000,000  shares of common
stock in  connection  with a private  placement  of common  stock of Vinifera to
minority shareholders. See Note 3.

NOTE 3   INVESTMENT IN AFFILIATED COMPANIES
`
Agritope's investment in affiliated companies includes its 9 percent interest in
UAF, Limited Partnership ("UAF"), a fresh flower distribution business in Tampa,
Florida.  During the first quarter of fiscal 1997,  Agritope determined that the
value  of  its  investment  in UAF  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.  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.

In June  1998,  Vinifera  accepted  an offer to sell its  minority  interest  in
Vinifera  Sudamericana  S.A.  to  the  majority  shareholder  for  $70,000.  The
resultant loss on disposition of $130,000 is included in "Other,  net" under the
caption "Other income (expense),  net" in the condensed consolidated  statements
of operations for the quarter ended June 30,1998.

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.


<PAGE>


AGRITOPE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 (UNAUDITED)

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
Clause & 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 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 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.

In June 1998,  Vinifera sold 898,269 shares of common stock to certain  minority
shareholders for $1.8 million. In connection with the terms of the related stock
purchase  agreements,  Agritope  canceled $4 million of working capital loans to
Vinifera in  exchange  for 2 million  shares of common  stock of  Vinifera.  The
transactions  increased  Agritope's  percentage  ownership from 61 percent to 64
percent.


<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  STOCKHOLDERS  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 Clause & 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  formerly  available  under  Epitope  benefit  plans.  As a
consequence  of the spin-off,  Epitope does not have any  ownership  interest in
Agritope and, accordingly, no longer provides funding for Agritope's activities.



<PAGE>


RESULTS OF OPERATIONS

REVENUES.  Total  revenues for the third  quarter and nine months ended June 30,
1998 were  $664,000  and  $917,000,  respectively,  as compared to $416,000  and
$668,000  for  the  corresponding  periods  in  the  prior  year.  Revenues  are
summarized below:
<TABLE>
<CAPTION>

THREE MONTHS ENDED JUNE 30 (IN THOUSANDS, EXCEPT %)                         1998                       1997
                                                                      DOLLARS    PERCENT        DOLLARS    PERCENT
                                                                      -------    -------        -------    -------
<S>                                                                 <C>         <C>             <C>        <C>   
Product sales-
Grape plant sales.........................................           $   664      100%           $  403       97%

Grants and contracts......................................                 -        -                13        3
                                                                     -------     ----            -------    -----
                                                                     $   664      100%           $  416      100%

NINE MONTHS ENDED JUNE 30 (IN THOUSANDS, EXCEPT %)                          1998                       1997
                                                                      DOLLARS    PERCENT        DOLLARS    PERCENT
                                                                      -------    -------        -------    -------
Product sales-
Grape plant sales.........................................           $   845       92%           $   566      85%

Grants and contracts......................................                72        8                102      15
                                                                     -------     ----            -------    ----
                                                                     $   917      100%             $ 668    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.  Due to
rainy  weather  conditions  in  California  in the  spring of 1998,  a number of
customers deferred plantings to the summer season.

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 June 30,  1998,  Vinifera  had firm  orders  totaling  $2.9
million,  of which $1.8 million call for delivery before  September 30, 1998 and
$1.1 million call for delivery in fiscal 1999. As of June 30, 1997, Vinifera had
firm  orders of $0.8  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 $1.2 million as of June 30, 1998, as compared to
$0.4 million on September 30, 1997 and $0.7 million on June 30, 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  Clause & Cie, has  committed to fund at least $1.0 million of research
projects  over the next three years.  To date,  $250,000  has been  approved for
three projects commencing in July 1998.

RESEARCH AND DEVELOPMENT  EXPENSES.  Research and development expenses increased
by $ 280,000 or 60% and $570,000, or 46%, respectively, for the three months and
nine months ended June 30, 1998 as compared to the third  quarter and first nine
months of fiscal 1997. The higher  research and  development  costs in the third
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 $34,000 or 4% in the current quarter and by
$231,000  or 10%,  in the nine months  ended June 30,  1998,  as compared to the
quarter and nine months ended June 30, 1997. The increase for the nine months 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.

<PAGE>

OTHER INCOME  (EXPENSE),  NET. In the quarter  ended June 30, 1998,  the Company
realized interest income of $69,000 from investment of proceeds from the private
placements of equity  securities in December 1997 and January 1998. 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.  Agritope's  net loss was  approximately  $1.5  million  for the third
quarter of fiscal 1998 and $1.4 million for the corresponding  quarter in 1997 $
($.37 per share for 1998 and $.51 per share for 1997). For the nine months ended
June 30, 1998,  the net loss  decreased  to $3.7 million  ($1.04 per share) from
$6.5 million  ($2.40 per share)  principally  as a result of the $3.1 million of
prior year  non-recurring  charges  incurred in the quarter  ended  December 31,
1996. Excluding the non-recurring  valuation loss and cost of debt conversion in
fiscal 1997, the Company's  operating  loss in the most recently  completed nine
month period  increased  $399,000 as a result of increased  activity  levels and
costs  associated  with the spin-off and  subsequent  move to new  facilities in
March 1998.


LIQUIDITY AND CAPITAL RESOURCES
                                               6/30/98                9/30/97
                                               -------                -------
Cash and cash equivalents..................  $5,584,998            $    4,384
Working capital ..............................8,935,807             1,658,808

         At June 30, 1998,  Agritope  had working  capital of $8.9  million,  as
compared to working  capital of $1.7 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 and
$1.8 million  proceeds from sale of 898,269  shares of common stock of Vinifera,
Inc. to its minority shareholders.  Working capital also increased due to a $2.7
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 June 30, 1998 represents
grapevine plants expected to be sold in the summer of 1998 and in 1999.

Expenditures for property and equipment were $1.8 million during the nine months
ended June 30, 1998, largely as a result of $1.3 million in expenditures for new
research and administrative facilities to which the Company moved in March 1998.
In  November  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 the year ended September 30, 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, $3.4 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

<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.  In June 1998,  Vinifera  sold 898,269  shares of common stock to minority
shareholders  for $1.8  million and issued 2 million  shares of common  stock to
Agritope in exchange for  cancellation of $4 million working capital loans.  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  through fiscal 1999, 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  has  completed a Year 2000 review of its  systems  and  procedures  to
determine  the  scope of costs or risks  Agritope  may face in  connection  with
potential computer problems  associated with the Year 2000.  Management believes
that  Agritope will not incur  material  Year 2000  remedial  costs and that its
operations will not be materially affected by any Year 2000 problems.
<PAGE>

                           PART II. OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         (27)  Financial Data Schedule

(b)      No reports on Form 8-K were filed during the three months
         ended June 30, 1998.

<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.


August 12, 1998                        /s/ ADOLPH J. FERRO
---------------                        ----------------------------------
Date                                   Adolph J. Ferro
                                       Chairman, President and Chief 
                                        Executive Officer
                                       (PRINCIPAL EXECUTIVE OFFICER)




August 12, 1998                        /s/ GILBERT N. MILLER
---------------                        ----------------------------------
Date                                   Gilbert N. Miller
                                       Executive Vice President and Chief 
                                        Financial Officer
                                       (PRINCIPAL FINANCIAL AND ACCOUNTING
                                         OFFICER)


<PAGE>


                                  EXHIBIT INDEX

EXHIBIT               DESCRIPTION                                          PAGE
-------               -----------                                          ----

 27                   Financial Data Schedule                               17