<PAGE>
 
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB



(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998.

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________to_____________.

Commission file number:    0-23153

                                 VOLU-SOL, INC.
                                 --------------
       (Exact name of small business issuer as specified in its charter)


            UTAH                                         87-0543981
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


5095 WEST 2100 SOUTH
SALT LAKE CITY, UTAH                                          84120
(Address of principal executive offices)                   (Zip Code)


                                 (801) 974-9474
                (Issuer's telephone number, including area code)

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

As of April 30, 1998, the registrant had issued and outstanding 2,111,216 shares
of Common Stock, par value $.0001.

           Transitional Small Business Disclosure Format (Check One):
                                 Yes [ ] No [X]
<PAGE>
 
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>


                                                                        Page No.
                                                                        --------
<S>                                                                     <C>
PART I.  FINANCIAL INFORMATION

1.   Financial Statements

     Unaudited Condensed Consolidated Balance Sheet
     as of March 31, 1998................................................. 3

     Unaudited Condensed Consolidated Statements of Operations
     for the Three Months and Six Months Ended March 31, 1998 and  1997... 4

     Unaudited Condensed Consolidated Statements of Cash Flows for
     the Six Months Ended March 31, 1998 and 1997......................... 5

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

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

PART 2.  OTHER INFORMATION................................................11

</TABLE>

                                    Page 2
<PAGE>
                                VOLU-SOL, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEET
                                  (UNAUDITED)


                                    ASSETS
<TABLE> 
<CAPTION> 
                                                                           March 31,
                                                                              1998
                                                                        -----------------
<S>                                                                     <C> 
Current assets:
     Cash and cash equivalents                                                 $ 249,530
     Accounts receivable, net                                                     60,322
     Inventories                                                                 177,752
     Prepaid assets                                                                  700
                                                                        -----------------
         Total current assets                                                    488,304

Property and equipment, net                                                      224,451
Other assets, net                                                                 34,964
                                                                        -----------------
         Total assets                                                          $ 747,719
                                                                        =================


                     LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Note payable - Biomune Systems, Inc.                                      $ 390,500
     Accounts payable                                                             80,867
     Preferred stock dividends payable                                            20,330
     Accrued interest payable                                                     32,144
     Other accrued liabilities                                                    26,902
                                                                        -----------------

         Total current liabilities                                               550,743
                                                                        -----------------

Shareholders' equity:
     Series A Convertible Preferred Stock; 3,658.25 shares
         outstanding and 4,500 shares subscribed
         (aggregate liquidation preference of $1,000,000)                      1,661,304
     Common Stock, 2,111,216 shares outstanding                                      211
     Additional paid-in capital                                                2,200,600
     Accumulated deficit                                                      (2,765,139)
     Stock subscriptions receivable                                             (900,000)
                                                                        -----------------
         Total shareholders' equity                                              196,976
                                                                        -----------------

         Total liabilities and shareholders' equity                            $ 747,719
                                                                        =================

</TABLE> 



        The accompanying notes are an integral part of this condensed 
                          consolidated balance sheet.


                                       3
<PAGE>
                                VOLU-SOL, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE> 
<CAPTION> 

                                                             For the Three Months                     For the Six Months
                                                               Ended March 31,                         Ended March 31,
                                                           1998               1997                 1998               1997
                                                       --------------     --------------       --------------     --------------
<S>                                                    <C>                <C>                  <C>                <C> 
REVENUES                                                   $ 115,887          $ 124,675            $ 237,288          $ 235,437 
                                                       --------------     --------------       --------------     --------------
OPERATING EXPENSES:
     Cost of revenues                                         74,687             93,952              175,601            173,523
     Selling, general and administrative                     202,630            180,531              393,847            356,892 
                                                       --------------     --------------       --------------     --------------
         Total operating expenses                            277,317            274,483              569,448            530,415
                                                       --------------     --------------       --------------     --------------
LOSS FROM OPERATIONS                                        (161,430)          (149,808)            (332,160)          (294,978)

OTHER INCOME (EXPENSE):
     Interest income                                           1,647                  -                2,545                  -
     Interest expense (Biomune Systems, Inc.)                 (9,763)                 -              (19,606)                 - 
                                                       --------------     --------------       --------------     --------------
NET LOSS                                                    (169,546)          (149,808)            (349,221)          (294,978)

Preferred Stock dividends                                    (10,248)                 -              (20,330)                 -
Preferred Stock accretion of beneficial
     conversion feature                                      (68,750)                 -             (166,750)                 - 
                                                       --------------     --------------       --------------     --------------
NET LOSS APPLICABLE TO COMMON SHARES                      $ (248,544)        $ (149,808)          $ (536,301)        $ (294,978)
                                                       ==============     ==============       ==============     ==============

NET LOSS PER COMMON SHARE (BASIC AND
     DILUTED) (Note 5)                                       $ (0.12)           $ (0.07)             $ (0.25)           $ (0.14)
                                                       ==============     ==============       ==============     ==============

WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING                                           2,111,216          2,111,216            2,111,216          2,111,216

</TABLE> 



        The accompanying notes are an integral part of these condensed 
                           consolidated statements.

                                       4
<PAGE>
                                VOLU-SOL, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                -----------------------------------------------
                                  (UNAUDITED)

               Increase (Decrease) in Cash and Cash Equivalents

<TABLE> 
<CAPTION> 
                                                                                      For the Six Months
                                                                                       Ended March 31,
                                                                              1998                          1997
                                                                        -----------------             -----------------
<S>                                                                     <C>                           <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                      $ (349,221)                   $ (294,978)
Adjustments to reconcile net loss to net cash used
     in operating activities:
         Depreciation and amortization                                            39,514                        34,241
         Changes in assets and liabilities:
           Accounts receivable, net                                                3,889                       (24,086)
           Inventories                                                           (24,864)                      (22,644)
           Other assets                                                          (13,590)                          (24)
           Accounts payable                                                       33,901                        49,824
           Accrued liabilities                                                   (45,194)                       (9,446)
                                                                        -----------------             -----------------
               Net cash used in operating activities                            (355,565)                     (267,113)
                                                                        -----------------             -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment                                           (2,596)                       (1,599)
                                                                        -----------------             -----------------
               Net cash used in investing activities                              (2,596)                       (1,599)
                                                                        -----------------             -----------------        
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net change in former Parent's investment                                          -                       219,999
     Loan from Biomune                                                                 -                        38,500
     Proceeds from issuance of Series A Preferred,
         net of offering costs                                                   270,000
                                                                        -----------------             -----------------
               Net cash provided by financing activities                         270,000                       258,499
                                                                        -----------------             -----------------        
NET DECREASE IN CASH AND CASH
     EQUIVALENTS                                                                 (88,161)                      (10,213)

CASH AND CASH EQUIVALENTS AT BEGINNING
     OF THE PERIOD                                                               337,691                        12,167
                                                                        -----------------             ----------------- 
CASH AND CASH EQUIVALENTS AT END OF THE
     PERIOD                                                                    $ 249,530                       $ 1,954
                                                                        =================             =================        
</TABLE> 

During the six months ended March 31, 1998, the Company accrued $20,330 of
Series A Preferred stock dividends and $166,750 related to the beneficial
conversion feature of the Series A Preferred Stock.

During the six months ended March 31, 1998, the Company issued 250 shares of 
Series A Preferred Stock valued at $50,000 as commissions related to the sales 
of Preferred Stock.

        The accompanying notes are an integral part of these condensed 
                           consolidated statements.

                                       5
<PAGE>
 
                                 VOLU-SOL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

(1)  PRESENTATION OF CONDENSED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements of Volu-
Sol, Inc. (the "Company") and Volu-Sol Reagents Corporation, its wholly owned
subsidiary, have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB and in accordance with Item 310 of Regulation S-B.  Accordingly, such
unaudited financial statements do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  The Company suggests that these condensed consolidated
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's Form 10-KSB for the year ended September
30, 1997.

In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position,
results of operations and cash flows of the Company for the interim periods
presented, have been included. Operating results for the six months ended March
31, 1998 are not necessarily indicative of the results that may be expected for
the year ending September 30, 1998.

(2)  RELATED-PARTY TRANSACTIONS

From March 5, 1997 through September 30, 1997, the Company obtained loans from
Biomune Systems, Inc. (the Company's former parent) totaling $390,500.  These
loans bear interest at an annual rate of ten percent and are due on demand.
Accrued but unpaid interest on these loans totaled $32,144 and is included in
"accrued interest payable" in the accompanying balance sheet as of March 31,
1998.  The Company anticipates repaying this debt from the proceeds raised in a
private placement of the Company's Series A Preferred (see Notes 4 and 6).

(3)  INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or
market value.  Inventories consist of the following as of March 31, 1998:

Raw materials, packaging and supplies           $ 59,419
 
Instruments, biological stains and reagents      118,333
                                                --------
                                                $177,752
                                                ========

(4)  SERIES A PREFERRED STOCK

As of March 31, 1998, the Company has $900,000 of subscriptions receivable from
the sale of 4,500 shares of Series A Preferred Stock. During the six months
ended March 31, 1998, the Company sold 1,500 shares of Series A Preferred for
$300,000. The Series A Preferred is convertible into Common Stock beginning
January 1, 1998. The "conversion price," which is the basis for such conversion,
is the lesser of (i) 80 percent of the average closing bid price of the
Company's Common

                                    Page 6
<PAGE>
 
Stock for the three trading days immediately preceding the date of conversion or
(ii) $1.25 per share. This beneficial conversion feature has been recognized as
an increase to net loss applicable to common shares of $166,750 for the six
months ended March 31, 1998. The investor that subscribed to 6,000 shares of the
Company's Series A Preferred at $200 per share has paid $300,000 of that
$1,200,000 subscription. The investor has notified the Company that it will pay
the $900,000 balance of its subscription at such time as the Company becomes
listed on a stock exchange.

During the six months ended March 31, 1998, the Company paid commissions of
$55,000 to MK Financial, Inc., an entity beneficially owned by David G. Derrick,
a shareholder of the Company, and issued a total of 250 shares of Preferred
Stock as commission to two individuals, related to the sale of Series A
Preferred Stock.

(5)  NET LOSS PER COMMON SHARE

Basic net loss per common share ("Basic EPS") excludes dilution and is computed
by dividing net loss by the weighted average number of common shares outstanding
during the period.  Diluted net loss per common share ("Diluted EPS") reflects
the potential dilution that could occur if stock options or other contracts to
issue Common Stock including convertible Preferred Stock were exercised or
converted into Common Stock. The computation of Diluted EPS does not assume
exercise or conversion of securities that would have an anti-dilutive effect on
net loss per common share.  Because the Company has incurred a loss for the
periods presented, no exercises or conversions have been considered as they
would be anti-dilutive, thereby decreasing the net loss applicable to common
shares.

At March 31, 1998, there were outstanding options to purchase 896,660 shares of
Common Stock and there were 3,658.25 shares of Series A Preferred convertible
into a minimum of 585,320 shares of Common Stock, neither of which are included
in the computation of Diluted EPS because they would be anti-dilutive.

(6)  SUBSEQUENT EVENTS

The Company has started the process of listing on the OTC Electronic Bulletin
Board and expects that process to be completed in August 1998.  The process has
been delayed due to the Nasdaq Stock Markets' posting of an ex-dividend date for
the distribution of the Company's Common Stock in connection with the
divestiture of the Company by Biomune.  Biomune had previously set the record
and dividend date for the divestiture to be March 5, 1997.  However, Nasdaq has
advised some brokers that the record date was February 17, 1998, the approximate
date Volu-Sol shares were mailed to Biomune shareholders.  This has resulted in
some confusion concerning who is entitled to receive shares of the Company's
Common Stock. Biomune has informed the Company that it has no intention of
changing the date on which the persons entitled to receive shares were
identified or to issue Volu-Sol shares to persons who acquired Biomune Common
Stock following March 5, 1997, although there can be no assurance that Nasdaq
will in fact rescind the later ex-dividend date.

As of April 30, 1998, the Company repaid $150,000 of its note payable to Biomune
Systems, Inc.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     Until October 1, 1997, the Company was a division and then a wholly owned
subsidiary of Biomune Systems, Inc., a Nevada corporation ("Biomune").  On
October 1, 1997, Biomune divested itself of the Company by distributing Volu-Sol
Common Stock to holders of Biomune Common Stock as of March 5, 1997.  Since
October 1, 1997, the Company has operated as a separate entity.  The following
discussion and analysis should be read in conjunction with the Company's
unaudited condensed financial statements and the 

                                    Page 7
<PAGE>
 
notes thereto contained elsewhere in this report. The discussion of these
results should not be construed to imply that any condition or circumstance
discussed herein will necessarily continue in the future.

     When used in this report, the words "believes," "anticipates," "expects,"
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected.  Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof.  The Company undertakes no obligation to publicly
release the results of any revisions to these forward-looking statements that
may be made to reflect events or circumstances after the date of this report, or
to reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997

     During the quarter ended March 31, 1998, the Company generated revenues
totaling $115,887 compared to $124,675 for same period in 1997.  This decrease
in revenues is attributable to declining sales of the Definitive staining device
in 1998.

     Cost of revenues for the quarter ended March 31, 1998 totaled $74,687
compared to $93,952 for the quarter ended March 31, 1997. The overall gross
margin for the 1998 second quarter was 36 percent of revenues compared to 25
percent of revenues for the comparable quarter in 1997.  The increase in the
gross margin on sales of stains and reagents is attributable to shipping charges
that are now being paid by customers as well as price increases that were
implemented in March 1998. Also, the increased gross margin is in part the
result of an overall effort to create a leaner production team.

     Selling, general and administrative expenses totaled $202,630 for the
quarter ended March 31, 1998, compared to $180,531 for the same quarter in 1997,
an overall increase of $22,099.  This increase is due to expenses (including
professional fees) associated with the registration of the Company's Common
Stock under federal securities laws and the distribution of its shares in
connection with divestiture of the Company by Biomune and to increased employee
expenditures.  However, as a result of changes made toward the end of the
quarter ended March 31, 1998, management anticipates that selling, general and
administrative expenses will be reduced in the quarter ending June 30, 1998.

     Interest expense increased from $0 for the quarter ended March 31, 1997 to
$9,763 for the quarter ended March 31, 1998.  The increase in interest expense
is due to borrowings from Biomune, the Company's former parent.

     The Company incurred a net loss applicable to common shares of $248,544 for
the quarter ended March 31, 1998 compared to a net loss applicable to common
shares of $149,808 for the quarter ended March 31, 1997.  This increase in net
loss is primarily due to accrued dividends on Preferred Stock and accretion of
the beneficial conversion feature related to the Series A Preferred, as well as
an increase in selling, general, and administrative expenses.

     It is anticipated that the net loss applicable to common shareholders will
increase in the future due to dividend requirements and accretion of the
beneficial conversion feature associated with the consummation of additional
sales of Series A Preferred.  As of March 31, 1998, the Company had remaining
subscriptions receivable totaling $900,000.  If only those subscriptions are
collected and no further sales of Series A Preferred are made, the net loss
applicable to common shares would increase by approximately $225,000 for 

                                    Page 8
<PAGE>
 
the one-time charge related to the beneficial conversion feature and by
approximately $90,000 per year for recurring dividends at 10 percent. Sales of
Series A Preferred could be as high as $2,400,000, in which case the dividends
and the impact of the beneficial conversion feature would increase accordingly.
For the quarter ended March 31, 1998, the Company recorded expense for the
impact of the beneficial conversion feature of the Series A Preferred of
$68,750.

Six Months Ended March 31, 1998 Compared to Six Months Ended March 31, 1997

     During the six months ended March 31, 1998, the Company generated revenues
totaling $237,288 compared to $235,437 for the six months ended March 31, 1997.
This small increase in revenues is mainly attributable to the increased sales in
Volu-Sol stains.

     Cost of revenues for the six months ended March 31, 1998 totaled $175,601
compared to $173,523 for the six months ended March 31, 1997. The overall gross
margin for the six months ended March 31, 1998 and 1997 was 26 percent of
revenues.

     Selling, general and administrative expenses totaled $393,847 for the six
months ended March 31, 1998, compared to $356,892 for the six months ended March
31, 1997, an overall increase of $36,955.  This increase is due to expenses
associated with the registration of the Company's Common Stock under federal
securities laws and the distribution of its shares in connection with
divestiture of the Company by Biomune and to increased employee expenditures.
However, as a result of changes made toward the end of the quarter ended March
31, 1998 management believes that selling, general and administrative expenses
will be lower in the quarter ending June 30, 1998.

     Interest expense increased from $0 for the six months ended March 31, 1997
to $19,606 for the six months ended March 31, 1998.  The increase in interest
expense is due to borrowings from Biomune, the Company's former parent.

     The Company incurred a net loss applicable to common shares of $536,301 for
the six months ended March 31, 1998 compared to a net loss applicable to common
shares of $294,978 for the six months ended March 31, 1997.  This increase in
net loss is primarily due to dividends and accretion of the beneficial
conversion feature related to the Series A Preferred as well as an increase in
selling, general, and administrative expenses.

LIQUIDITY AND CAPITAL RESOURCES

     The Company currently is unable to finance its operations solely from its
cash flows from operating activities.  From October 1, 1993 through September
30, 1997, Biomune financed the Company's operations through a series of loans
and other capital contributions totaling approximately $2,800,000.  Of this
amount, $390,500 represents loans which bear interest at the rate of 10 percent
per year and which are payable on demand.  Since the divestiture of the Company
by Biomune, the Company has not received additional amounts from Biomune in the
form of loans or equity contributions.  The Company intends to sell up to 12,000
shares of its Series A Preferred in a private offering ("Offering"), for total
proceeds of up to $2,400,000.  There can be no assurance that the Company will
be successful in its efforts to sell any part of the shares.  The Series A
Preferred is convertible into Common Stock of the Company.  The "conversion
price," which is the basis for such conversion, is the lesser of (i) 80 percent
of the average closing bid price of the Company's Common Stock for the three
trading days immediately preceding the date of conversion or (ii) $1.25 per
share.  As of April 30, 1998, the Company had received subscriptions for
$1,575,000 of Series A Preferred, for which cash of $675,000 had been received.
The remaining $900,000 subscription 

                                    Page 9
<PAGE>
 
receivable is expected to be collected when the Company becomes listed on the
OTC Electronic Bulletin Board. There can be no assurance that the Company's
stock will become traded on the OTC Electronic Bulletin Board or that if it does
become listed that a market will develop for such stock.

     As of March 31, 1998, the Company had cash and cash equivalents of $249,530
and a negative working capital of $62,439 compared to cash and cash equivalents
of $337,691 and a positive working capital of $38,083 as of September 30, 1997.

     During the six months ended March 31, 1998, the Company's operating
activities used cash of $355,565, much of which was provided in previous periods
by the sale of Preferred Stock.  During the six months ended March 31, 1997, the
Company's operating activities used cash in the amount of $267,113, which was
provided primarily by capital contributions from Biomune.

     The Company has no credit facility with any commercial lending institution.
In the past, the Company has borrowed and received capital from time to time
from Biomune, but the Company has no formal financing arrangement, agreement or
understanding with Biomune or any other party to provide debt financing in the
future.

     The unaudited condensed consolidated financial statements of the Company
have been prepared on the assumption that the Company will continue as a going
concern. The Company's product line is limited and it has been necessary to rely
upon borrowings and financing from the sale of its equity securities to sustain
operations. Additional financing will be required if the Company is to continue
as a going concern. If such additional funding cannot be obtained, the Company
may be required to scale back or discontinue its operations. Even if such
additional financing is available to the Company, there can be no assurance that
it will be on terms favorable to the Company. In any event, such financing will
result in immediate and possibly substantial dilution to existing shareholders.

RECENT ACCOUNTING PRONOUNCEMENTS

     In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share."  This statement replaces Accounting Principles Board
("APB") Opinion No. 15, "Earnings Per Share."  Effective for the period ended
December 31, 1997, SFAS No. 128 requires the Company to report both "basic" and
"diluted" earnings per share.  "Basic" earnings per share does not include the
addition of Common Stock equivalents to the shares outstanding.  "Diluted"
earnings per share requires the addition of dilutive common stock equivalents to
the shares outstanding.  Average shares outstanding is the denominator used in
"basic" earnings per share calculations.  The implementation of SFAS No. 128 had
no impact on the Company's net loss per share for the periods presented.

FORWARD-LOOKING STATEMENTS AND CERTAIN RISK FACTORS

     Statements which are not historical facts contained in this report are
forward-looking statements. Section 27A of the Securities Act of 1933, as
amended, provides a safe harbor for forward-looking statements.  In order to
comply with the terms of the safe harbor, the Company cautions that a variety of
factors could cause the Company's actual results to differ materially from
anticipated results or other expectations expressed in this report.  The
forward-looking statements contained in this Management's Discussion and
Analysis or Plan of Operation involve a number of risks and uncertainties that
could cause actual results to differ from projected or anticipated results.  The
risk factors discussed in Part I, Item 1 ("Business") and in the "Management's
Discussion and Analysis or Plan of Operation" (Item 6) of the 

                                    Page 10
<PAGE>
 
Company's Annual Report on Form 10-KSB for the fiscal year ended September 30,
1997 may also affect actual operating results.

                          PART II - OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES

     Unregistered sales of equity securities during quarter (other than in
reliance on Regulation S). During the quarter ended March 31, 1998, the Company
issued equity securities that were not registered under the Securities Act of
1933, as amended (the "Act").  Specifically, the Company issued 1,625 shares of
Series A Preferred Stock to certain accredited investors for gross proceeds to
the Company of $325,000.  The Company issued such shares without registration
under the Act in reliance on Section 4(2) of the Act.  The shares of Series A
Preferred Stock were issued as restricted securities and the certificates
representing such shares were stamped with a restrictive legend to prevent any
resale without registration under the Act or compliance with an exemption.
These shares are convertible to shares of Common Stock of the Company under
certain circumstances.  No conversions have been made to date.

ITEM 5.   OTHER INFORMATION

     Effective March 5, 1998, Volu-Sol Inc., created a wholly owned subsidiary,
Volu-Sol Reagents Corporation to continue the business of manufacturing and
distributing reagents and stains.  The Company assigned the assets used in the
reagents business to Volu-Sol Reagents Corporation, which is now primarily
responsible for the production and selling of the medical reagent stains as well
as the Definitive.  D. Lynn Bigelow, a director of the Company, is the Chief
Operating Officer of Volu-Sol Reagents Corporation.

     On March 9, 1998, Volu-Sol Reagents Corporation implemented price increases
on all of its stain products. The Company also has adopted the policy of
requiring customers to pay freight and shipping. Since the change, revenues have
increased. Customers have remained loyal to Volu-Sol products and continue to
purchase and use the stains, although there can be no assurance that market
share can or will be retained.

     Effective February 28, 1998, James Derrick resigned as President of the
Company and subsequently as a member of the Board of Directors to pursue other
interests.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits Required by Item 601 of Regulation S-B

     Exhibit No.    Description
     -----------    -----------

     27             Financial Data Schedule

                                    Page 11
<PAGE>
 
                                   SIGNATURES



     In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                    VOLU-SOL, INC.

Date: May 15, 1998                  By: /s/ W. W. Kirton, III
                                    -----------------------------
                                    Wilford W. Kirton, III,
                                    Chief Executive Officer

                                    Page 12