SECURITIES AND EXCHANGE COMMISSION
                   WASHINGTON, D.C. 20549

                                           FORM 10-K

        Annual Report Pursuant to Section 13 or 15(d)
           of the Securities Exchange Act of 1934

 For the Fiscal Year Ended 12/31/98  Commission File Number 0-10822

                    Biocontrol Technology, Inc.
   (Exact name of registrant as specified in its charter)

     Pennsylvania                             25-1229323
   (State or other jurisdiction of          (I.R.S. Employer
    incorporation or organization)         Identification Number)

          300 Indian Springs Road, Indiana, Pennsylvania 15701
         (Address of principal executive offices)     (Zip Code)

  Registrant's telephone number, including area code (412) 349-1811

  Securities registered pursuant to Section 12(b) of the Act: None

  Securities registered pursuant to Section 12(g) of the Act:
                Common Stock, $.10 par value

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  and (2) has been subject to such filing requirements
for the past 90 days.   Yes   X       No  ___

Indicate  by  check mark if disclosure of delinquent  filers
pursuant  to  Item  405 of Regulation S-K is  not  contained
herein,   and  will  not  be  contained,  to  the  best   of
registrant's  knowledge, in definitive proxy or  information
statements   incorporated by reference in Part III  of  this
Form 10-K, or any amendment to this Form 10-K. [ ]

The  aggregate  market  value of the voting  stock  held  by
nonaffiliates of the registrant as of March 25, 1999:

Common Stock, $.10 par value --$ 20,960,000
As of December 31, 1998, 420,773,568 shares of common stock,
   par value $.10 per share, were outstanding.
As  of December 31, 1998, no shares of preferred stock,  par
   value $10 per share, were outstanding.

         Exhibit index is located on pages 34 to 37.

Item 1.  Business

General Development of Business

Biocontrol   Technology,  Inc.  was  incorporated   in   the
Commonwealth of Pennsylvania in 1972 as Coratomic, Inc.  and
is  referred  to herein as "BICO" or the "Company".   BICO's
operations  are currently located at Kolter Drive,  Indiana,
PA,  and  its  administrative offices are  located  at  2275
Swallow  Hill Road, Bldg. 2500, Pittsburgh, PA.  The Company
is   developing   the   Noninvasive  Glucose   Sensor   with
Diasensor.com,   Inc.,  its  52%  owed  subsidiary.    Where
applicable,  BICO  and Diasensor.com  will  be  referred  to
herein as the "Companies".

The  primary  business of the Company is the development  of
new  devices  which include models of a noninvasive  glucose
sensor  (the  "Noninvasive Glucose Sensor"), an  implantable
port  for drug delivery and hemodialysis use, a polyurethane
heart  valve,  procedures relating to the use of  whole-body
extracorporeal hyperthermia in the treatment of  cancer  and
the human immunodeficiency virus ("HIV"), and bioremediation
products.  Due to economic and other factors, including  the
loss  of orders, the Company has discontinued its functional
electrical   stimulator  and  Barnacle  Ban  projects   (See
"Management's  Discussion and Analysis").   In  early  1998,
the  Company acquired a majority interest in a company which
manufactures and sells metal coating products.

Forward-Looking Statements

From  time  to time, the Company may publish forward-looking
statements relating to such matters as anticipated financial
performance, business prospects, technological developments,
new  products,  research  and  development  activities,  the
regulatory approval process, specifically in connection with
the  FDA  marketing approval process, and  similar  matters.
The   Private  Securities  Litigation  Reform  Act  of  1995
provides  a safe harbor for forward-looking statements.   In
order  to  comply  with the terms of the  safe  harbor,  the
Company  notes  that a variety of factors  could  cause  the
Company's  actual  results  to differ  materially  from  the
anticipated results or other expectations expressed  in  the
Company's   forward-looking  statements.   The   risks   and
uncertainties  that may affect the operations,  performance,
research  and  development  and  results  of  the  Company's
business  include the following: additional  delays  in  the
research,  development  and FDA marketing  approval  of  the
Noninvasive  Glucose Sensor; delays in  the  manufacture  or
marketing  of  the  Company's  other  products  and  medical
devices;  the  Company's  future  capital  needs   and   the
uncertainty  of  additional funding;  BICO's uncertainty  of
additional  funding;  competition  and  the  risk  that  the
Noninvasive Glucose Sensor or its other products may  become
obsolete;    the   Company's  continued  operating   losses,
negative  net worth and uncertainty of future profitability;
potential conflicts of interest; the status and risk to  the
Company's  patents, trademarks and licenses; the uncertainty
of  third-party payor reimbursement for the Sensor and other
medical  devices and the general uncertainty of  the  health
care  industry; the Company's limited sales,  marketing  and
manufacturing  experience;  the  amount  of  time  or  funds
required  to  complete  or continue  any  of  the  Company's
various  products or projects; the attraction and  retention
of  key  employees;  the  risk  of  product  liability;  the
uncertain  outcome and consequences of the lawsuits  pending
against  the Company; the ability of the Company to maintain
a national listing for its common stock; and the dilution of
the Company's common stock.

Description of Business

Development of the Noninvasive Glucose Sensor

BICO and Diasensor.com have completed the development of the
first  commercial Noninvasive Glucose Sensor, which is  able
to  measure  the  concentration of glucose in  human  tissue
without requiring the drawing of blood.  Currently available
glucose sensors require the drawing of blood by means  of  a
finger prick.

BICO's  initial research and development with insulin  pumps
led  to  a  theory  by which blood glucose levels  could  be
detected   noninvasively   by   correlating   the   spectral
description  of  reflected electromagnetic energy  from  the
skin  with  blood  glucose levels in the 50  milligrams  per
deciliter (mg/dl) to 500 mg/dl range in the ingrared  region
of  the electromagnetic spectrum.  The method was studied as
early  as  1986  and  1987 by BICO  and  is  consultants  at
Battelle   Memorial  Institute  in  Columbus,  Ohio,   using
laboratory  instruments.  These studies,  along  with  later
affirmative  work,  led  to a patent application  by  BICO's
research  team  in 1990.  A patent covering the  method  was
granted  to  the  research  team and  assigned  to  BICO  in
December  1991.   The  rights  of  this  patent  have   been
purchased by Diasensor.com from BICO pursuant to a  purchase
agreement  (See, "Intercompany Agreements").   Other  patent
applications were filed by BICO, which contained new claims,
extending to new discoveries made during the development  of
the Sensor.  As of March 1999, a total of seven U.S. patents
assigned to Diasensor.com have been granted, with additional
U.S.  and foreign patent applications pending (See, "Current
Status  of  the  Noninvasive Glucose Sensor"  and  "Patents,
Trademarks and Licenses").  BICO has been granted the  right
to  develop  and manufacture Sensors pursuant to  agreements
with Diasensor.com (See, "Intercompany Agreements").

BICO's  research team advanced its technology  base  through
the  development of several research prototypes, which  were
tested  in  human clinical trials.  In a trial conducted  by
BICO  on  110 human subjects in March 1992, spectral,  blood
and  chemical  data was recorded for analysis  in  order  to
develop calibration data for the Sensor.  A second trial  on
40 human subjects in July 1992 indicated that the device did
not  have a satisfactory signal-to-noise ratio to allow  for
the  calculation of algorithms of sufficient accuracy to  be
acceptable  for  patient  use.   Signal-to-noise  ratio   is
determined  by the relationship of the signal  (the  glucose
level)  and the noise (random interferences).  Other  trials
were  conducted at several testing sites under the  guidance
of  the  sites' Institutional Review Board using prototypes,
which   addressed  the  signal  -to-noise  problem.    These
prototypes   were  designed  and  constructed  to   simulate
production models.

On  January  6,  1994,  BICO submitted  its  initial  501(k)
Notification to the Food and Drug Administration (the "FDA")
for   approval   to   market  the  production   model,   the
Diasensorr1000.  The submission was based on  data  obtained
from  the  advanced  research prototypes,  since  management
believed that the production model would be identical to the
advanced  prototypes.  In February 1996, the FDA convened  a
panel  of advisors to make a recommendation regarding BICO's
510(k)  Notification.   The majority of  the  panel  members
recommended   that  BICO  conduct  additional  testing   and
clinical trials of a production model prior to marketing the
Diasensor 1000.  BICO and Diasensor.com announced that  they
remained  committed  to  bringing  the  Diasensor  1000   to
diabetics,  and  that additional research,  development  and
testing  would  continue  (See,  "Current  Status   of   the
Noninvasive Glucose Sensor").

The  Diasensor  1000  is  a  spectrophotometer  capable   of
illuminating  a small area of skin on a patient's  arm  with
infrared  light,  and  then  making  measurements  from  the
infrared  light  diffusely reflected back into  the  device.
The  Diasensor 1000 uses internal algorithms to calculate  a
glucose measurement.

The  Diasensor 1000 is the first home-use noninvasive  blood
glucose  monitor for use by patients with diabetes mellitus.
Unlike  currently  marketed invasive home-use  devices,  the
Diasensor  1000 does not require that patients  prick  their
fingers  to  obtain a sample of blood to  test  their  blood
glucose.   A patient only needs to place his or her  arm  on
the  Diasensor  1000 and press a button to perform  a  blood
glucose test.  The Diasensor is currently approved for  sale
in  the  15-country European Union, and plans are  currently
being formulated for the next submission to the FDA to  seek
approval  to  market the device in the U.S.  (See,  "Current
Status of the Noninvasive Glucose Sensor").


Current Status of the Noninvasive Glucose Sensor

Due  to continued delays in the FDA approval process,  which
are  summarized below, and while continuing to work with the
FDA  and conduct its mandated testing, the Companies  turned
their  focus to other markets for the Diasensor 1000 besides
the  U.S.  BICO, as design authority and manufacturer of the
Diasensor  1000, applied for certification to  ISO  9001,  a
standard  defined  by  the  International  Organization  for
Standardization ("ISO") evidencing that BICO has in place  a
total  quality  system  for  the  design,  development   and
manufacture  of its products.  The certification formalizing
the  ISO  9001 certification was received by BICO in January
1998.  At the same time, BICO also received certification to
EN46001, a standard specifically for medical products.   The
certifications were received after an extensive audit by TUV
Rheinland,  a  company  authorized  to  conduct  "conformity
assessments" of an entity's quality system.  In early  1998,
BICO  submitted its technical file on the Diasensor 1000  to
TUV  Rheinland  to  satisfy  requirements  of  the  European
Medical  Device  Directive.  In addition, it  submitted  its
device  to  a TUV testing center in Connecticut  for  device
electrical  safety  testing.  In March  1998  BICO  received
approval to apply a CE mark to the device.  The CE  mark  is
provided by the regulatory bodies of the European Community,
or  by authorized private bodies, such as TUV Rheinland,  to
indicate that the device adheres to "quality systems" of the
ISO and the European Committee for Standardization.  The  CE
mark  has  permitted  the Companies  to  begin  selling  the
Diasensor in Europe.

In  order to facilitate sales in Europe, the Companies  have
contracted with EuroSurgical Ltd., a distributor of  medical
products  in the United Kingdom.  During 1998 BICO  educated
the  marketing and technical staffs of EuroSurgical  in  the
use and repair of the Diasensor 1000.  Devices have now been
placed  with  patients  in Portugal, Spain,  Germany,  South
Africa  and  England.   Because of the  lengthy  calibration
procedures,   and   the  Companies'   agreement   with   the
distributor  to  invoice  after successful  calibration  was
completed, minimal sales were recorded for 1998.

With  regard  to  marketing  the device  within  the  United
States, the Companies are continuing to work with the FDA to
obtain  approval.  Upon advice from the FDA,  the  Companies
are  planning to submit, under the FDA's new modular review,
a  Premarket Approval Application ("PMA").  In addition, the
Companies plan to submit an Investigational Device Exemption
("IDE")  to conduct human clinical trials at three  clinical
centers to obtain additional data.

FDA  approval is necessary to market the Diasensor  1000  in
the  United States.  In addition to the Diasensor 1000,  the
Companies  are  conducting further developments  which  will
allow  future  models  of the device  to  be  smaller,  less
costly,  with  reduced calibration and  evaluation  periods.
The  Companies cannot speculate as to when such developments
will  be completed.  Any future models of the Diasensor  may
be  subject  to  the  same regulatory testing  and  approval
processes as have been required for the Diasensor 1000, both
in the United States and abroad.

The Diasensor 1000 is intended to promote greater compliance
for   self-monitoring  blood  glucose  ("SMBG")  for   those
patients  concerned with the pain and discomfort of frequent
finger  prick procedures by allowing patients to  perform  a
majority of their daily SMBG with a noninvasive device.  The
use of the Diasensor 1000 in a defined target population  is
intended  to  assist  the  physician  responsible  for   the
patient's  diabetes  care  in making  appropriate  treatment
adjustments.   Such adjustments may include changes  to  the
patient's  daily insulin dose, caloric intake, and  exercise
regimen.  Averages of daily blood glucose test results  from
the Diasensor 1000 obtained at clinically relevant times  of
the  day  (e.g. fasting, pre-meal, post-meal,  and  bedtime)
over at least two to four weeks are to be used by physicians
together  with other test results (including invasive  home-
use  meters, laboratory test such as HbA1c and fructosamine)
changes  in  weight,  patient-reported  acute  complications
(such   as   hypoglycemia  or  ketonuria)  and  changes   in
lifestyle, to make appropriate treatment decisions.

Because  of  the current need for 60-day calibration,  after
which there is a 30-day evaluation period, and the inability
of  the  Diasensor  1000 to completely replace  a  patient's
invasive meter at this point, the market will be limited  by
the  number of patients who opt to use the device.   Due  to
the   current  vicissitudes  of  the  health-care  insurance
industry,  the Companies are unable to make any  projections
as  to  the  availability  of,  or  procedures  required  in
connection  with, third-party reimbursement.   Although  the
Companies   estimate,  based  on  1998   American   Diabetes
Association data, that there are nearly 16,000,000 diabetics
in  the  United States, not all diabetics will  be  suitable
users  of  the Noninvasive Glucose Sensor.  Those  diabetics
who are in poor glycemic control, who are currently under  a
physicians care, and who do not perform SMBG because of  the
pain  and  discomfort of fingersticks comprise the potential
market  for  the Noninvasive Glucose Sensor.  The  Companies
are unable to estimate the size of that market at this time.

Bioremediation

BICO  is  also involved in the field of biological  remedial
("bioremediation")  development.  Bioremediation  technology
utilizes naturally occurring micro-organisms or bacteria  to
convert various types of contamination to carbon dioxide and
water.   This occurs through the dual processes of  chemical
and  microbiological  reactions.  The product,  PRPr,  which
stands for Petroleum Remediation Product,  is designed as an
environmental microbial microcapsule, which is utilized  for
the  collection,  containment  and  separation  of  oil-type
products  in  or  from water. The product's  purpose  is  to
convert the contaminant, with no residual mass (separated or
absorbed)  in  need  of disposal.  When the  PRPr  comes  in
contact with the petroleum substances, the contaminants  are
bound  to  the  PRPr,  and they stay  afloat.   Because  the
product   contains  the  necessary  nutrients   and   micro-
organisms,  the  bioremediation process begins  immediately,
which   limits  secondary  contamination  of  the   air   or
surrounding   wildlife.   Eventually,   the   product   will
biodegrade both the petroleum and itself.

In  connection with this project, BICO created a subsidiary,
Petrol Rem, Inc. ("Petrol Rem").  Petrol Rem's officers  and
directors  include Anthony J. Feola and Fred E. Cooper,  who
are  also  directors and/or officers of BICO and  its  other
affiliates.

Part  of  Petrol  Rem's  initial  research  and  development
involved   field   testing  supervised   by   the   National
Environmental Technology Applications Corporation ("NETAC"),
a group endorsed by the Environmental Protection Agency (the
"EPA"), to determine whether the product is effective.  As a
result  of  such  testing, NETAC reported  positive  results
regarding the effectiveness of the product.

PRPr is now being manufactured and marketed for use in water
and on solid surfaces in the form of Petrol Rem's OIL BUSTER
r  product,  which  is used for small oil cleanups  on  hard
surfaces  such  as  the floors of manufacturing  facilities,
garages and machine shops.

The   product  system  is  listed  on  the  EPA's   National
Contingency Plan ("NCP") Product Schedule, and is  available
in free-flowing powder or absorbent socks.  In 1995, the EPA
required that all products previously listed on the  NCP  be
submitted  to additional testing.  Because PRPr successfully
passed  the  Tier II efficacy test conducted by  NETAC,  the
product  was requalified for listing on the NCP.  Management
believes  that this requalification process will  limit  the
number  of  products available for use in clean-up projects.
As   illustrative  evidence,  management  notes  that   only
thirteen  of  the  original  fifty-three  products  in   the
bioremediation agents category remain listed.

In  April  1993,  Petrol Rem entered  into  a  lease  for  a
facility in the Pittsburgh, Pennsylvania area, which is used
to  manufacture  PRPr.  The current lease  has  a  renewable
three-year term, with monthly rental payments of $2,888 plus
utilities  and applicable business privilege taxes.   Petrol
Rem  has  also purchased equipment, which has the capability
to  produce PRPr in quantities of  2,500 pounds per day, and
Petrol Rem has built an adequate inventory.

Petrol  Rem  has also completed development of a  new  spray
applicator  for its PRPr product.  The new applicator  is  a
lightweight, portable unit, which provides a more continuous
flow  of product.  The lighter weight and smaller size  will
allow  easier access to remote sites, which were  impossible
to reach with the previous applicator.

In  addition  to  PRPr, Petrol Rem has also developed  other
products.   In  order to address water pollution  issues  at
marinas, Petrol Rem has introduced BIO-SOKr, which  is  PRPr
contained in a 10" fabric tube, is designed and  used to aid
in the cleaning of boat bilges.  Bilges are commonly cleaned
out  with  detergents and emulsifiers, which cause  the  oil
pumped  out of the bilge to sink to the bottom of the water,
where it is harmful to marine life, and becomes difficult to
collect. In addition, it is illegal to dump oil or fuel into
the  water.  The BIO-SOKr, when placed in the bilge, absorbs
and   biodegrades  the  oil  or  fuel  on   contact,   which
significantly reduces or eliminates the pollution; then  the
product biodegrades itself.  As a result, BIO-SOKr helps  to
keep   waters  clear.   In  addition,  BIO-SOKr   helps   to
eliminate  the chore of bilge cleanup, and helps users  such
as  boaters and marinas to avoid fines for pumping  oil  and
fuel into the waterways, which is prohibited.

BIO-SOKr is guaranteed, lasts for an entire boating  season,
and  is  available from quality marine supply stores in  the
coastal areas of the United States, Canada, Europe and South
East Asia, and is recommended by the Canadian Coast Guard.

Petrol  Rem  has also developed OIL BUSTERr,  which  is  a
mixture of PRPr and an absorbent material.  OIL BUSTERr  is
used to clean up and remediate oil spills on hard surfaces.

Petrol  Rem's  BIO-BOOMr product is used in water  clean-up
projects.  The  product is a 3" x 10' fabric tube  which  is
filled with PRPr, and is used to both contain and biodegrade
contaminants in water.  BIO-BOOMr is a superior product  to
most containment products because, in addition to containing
the  oil  or  fuel spill, or restricting the  spread  of  an
anticipated spill, it also biodegrades the contaminant, then
biodegrades   itself.   These  features  act  to   virtually
eliminate secondary contaminants, thereby reducing  disposal
and  clean-up  costs.   Initial  sales  have  occurred,  and
marketing efforts are accelerating.

Petrol Rem is marketing PRPr through trade shows, magazines,
direct  mail advertising, and direct contacts with companies
and  consultants specializing in petroleum clean-up, as well
as  marketing  directly to municipalities  and  corporations
with  needs  for  the product.   Although there  can  be  no
assurances  that  PRPr  will be successfully  marketed,  the
Company  believes, based on their scientific determinations,
the  results  of  recent  NETAC testing, and  the  favorable
response  at  the retail level, that PRPr will be  a  viable
product in the bioremediation marketplace.

The  Company  believes  that it has expended  the  necessary
funds  to  complete  the development of  its  bioremediation
products,  and  to  build  up sufficient  inventory  pending
additional  orders.   The  Company has  spent  approximately
$9,963,700 on this project through December 31, 1998.

Whole-Body Extracorporeal Hyperthermia

In  connection with this project, BICO formed a wholly owned
subsidiary,   IDT,  Inc.   IDT's  executive   officers   and
directors include Glenn Keeling, who is  also an officer and
director of BICO.

IDT  and  HemoCleanse, an unaffiliated  company  located  in
Lafayette,  Indiana,   are currently engaged  in  a  project
which  involves  the experimental use of a delivery  system,
the   ThermoChem  SystemT,  for  perfusion-induced  systemic
hyperthermia ("PISH") to treat persons with certain types of
cancer   and   HIV/AIDS.     HemoCleanse   is   an   Indiana
corporation  with offices located at 2700 Kent Avenue,  West
Lafayette,    Indiana     47906.     HemoCleanse    designs,
manufactures  and markets products that treat blood  outside
the  body to remove toxins and simultaneously balance  blood
chemistries.   HemoCleanse believes  that  its  systems  are
unique  in  being  able to selectively  remove  both  small,
intermediate  and  protein-bound  toxins,  and  to   provide
extracorporeal hyperthermia to selectively kill infected  or
rapidly  dividing  cells  without the  risk  of  electrolyte
imbalances.

HemoCleanse  has  developed two models of the  device.   The
BioLogic-DT  is  designed for use as a  detoxifier  for  the
treatment of drug overdose and was approved for marketing in
the  United  States  by  the FDA  in  September  1994.   The
ThermoChem  SystemT, which incorporates this technology,  is
designed  for  use  in  the  hyperthermia  procedure.    The
ThermoChem SystemT is used in IDT's clinical trials.

Perfusion-induced systemic hyperthermia, a  form  of  whole-
body  hyperthermia,  achieved through  extracorporeal  blood
heating  ("PISH")  involves  heating  the  patient's   blood
outside the body to approximately 48 degrees centigrade  and
returning it back to the body, thus raising the body's  core
temperature  to the desired treatment temperature  up  to  a
maximum  of 42.5 degrees centigrade.  Blood passes a  roller
pump  which  sends  it  onward to the heat  exchanger  where
indirect  heating of the blood occurs, raising  the  outside
blood temperature to approximately 48 degrees centigrade.  A
portion  of the blood passes through a T-connection  to  the
ThermoChem-SB, located between the roller pump and the  heat
exchanger,  where it is chemically balanced on  a  real-time
basis  and  then returned to the blood flow path  before  it
reaches  the heat exchanger.  Continually circulating  blood
is  returned  to  the  patient  at  46  degrees  centigrade,
gradually raising the patient's core body temperature to the
desired  treatment temperature, which is measured by various
temperature probes throughout the body.

Experimentation outside the United States to  date,  to  the
best knowledge of the Company, has been somewhat limited and
not  well documented.  IDT, and IDT's Scientific and Medical
Advisory  Board believe that once a safe delivery system  is
established, serious, extensive and well-documented  testing
will  determine  whether PISH can be used  as  an  effective
treatment for persons with clinical cancer or HIV.

Although  other entities have experimented with the  use  of
PISH, one significant problem has been the safe delivery  of
the  procedure.  IDT believes that the improvements inherent
to  their  ThermoChem SystemT increase  the  safety  of  the
procedure.   The  ThermoChem SystemT incorporates  a  single
access   device,  utilizing  a  parallel  plate,  cellulosic
membrane dialyzer and a unique sorbent suspension which  can
effectively remove a wide range of chemicals and toxins from
the  blood, while maintaining a balance of electrolytes  and
important  nutrients.   The  system  is  also  comprised  of
several  specially  integrated devices  that  perform  blood
propulsion,   water   heating   and   cooling   to   control
extracorporeal  blood temperature, air  embolism  detection,
auxiliary  unit  roller pump occlusion  detection,  catheter
access  occlusion, and monitoring and recording  of  cardiac
output and patient temperatures.

As a result, IDT believes that they have taken a significant
step  towards  the  creation  of  a  safe  delivery  system.
Although  there  can  be no assurances that  the  ThermoChem
SystemT is safe for all humans, clinical trials to date have
confirmed  that  the  humans  tested  were  able  to  safely
tolerate PISH at a core temperature of 42 degrees centigrade
for  two  hours.   Based in part upon  the  results  of  its
initial  clinical  trials, the FDA has  approved  additional
clinical trials.

The  ThermoChem  SystemT is a combination  of  three  system
components: 1) the ThermoChem-HT, which circulates and heats
blood  extracorporeally  up  to  approximately  48   C   and
monitors  the  patient's  core temperature,  which  provides
constant  up to the minute access information on the  status
of the patient;  2) the ThermoChem-SB, which can effectively
remove  a wide range of chemicals and toxins from the blood,
while  maintaining a balance of electrolytes  and  important
nutrients;  and  3) the Disposable Kit, which  contains  the
patented sorbent suspension, as well as temperature  probes,
catheters, and tubing set, etc. .

The   ThermoChem   System's   specifications   include    an
extracorporeal continuous blood circuit, a blood  flow  rate
of  2000 ml/minute maximum, an integrated device which heats
blood   outside  the  body  to  approximately   48   degrees
centigrade and core temperature to a maximum of 42.5 degrees
centigrade,  and a sorbent suspension system  where  optimum
chemical transfer between the blood and sorbent is attained,
which balances critical blood chemistries.

Pre-clinical  trials were conducted on six swine  to  assure
safety at an increased flow rate and maintenance of a higher
core  temperature of 43 degrees centigrade for a  period  of
two hours.  This study concluded that blood chemistries were
normalized  with  the  use of the  ThermoChem  SystemT.   In
November 1996, the Companies submitted an IDE application to
the  FDA  for  a study utilizing the ThermoChem SystemT  for
PISH  for  metastatic  non-small  cell  lung  cancer.   This
protocol  was  developed  by  the  University  of  Texas  in
Galveston.   The  FDA  responded in December  1996  with  an
approval  to  conduct a Phase I trial.   The  University  of
Texas' Institutional Review Board (IRB) granted approval  of
this study in May 1997.

On  September  11, 1997, IDT entered into an agreement  with
the  University of Texas Medical Branch at Galveston  (UTMB)
to  begin a human clinical trial in October 1997.  The trial
will  utilize  the  ThermoChem SystemT  and  disposables  to
deliver  perfusion-induced systemic  hyperthermia  to  treat
patients with metastatic non-small cell lung cancer.

One  of  the objectives of this Phase I trial is to evaluate
the  ThermoChem  SystemT for the use  in  the  treatment  of
metastatic non-small cell lung cancer with regard to patient
selection,  tumor response, patient performance status,  and
patient   survival.   The  follow-up  of  the  patients   is
patterned  after  the  Southwest Oncology  Group  protocols,
which  are  considered state-of-the-art  studies  to  follow
response of cancer to the therapy.

The  study  is  being  conducted  at  the  General  Clinical
Research  Center (GCRC) at UTMB, which is supported  by  the
National  Institute of Health (NIH).  This is the only  PISH
study for metastatic non-small cell lung cancer approved  by
the FDA.

The  ThermoChem-HTT, a component of the ThermoChem  SystemT,
which  circulates  and  heats blood extracorporeally  up  to
approximately   48  C  and  monitors  the   patient's   core
temperature,  through various temperature probes,  and  also
provides constant up to the minute access information on the
patient  can  be  used  independently  from  the  ThermoChem
SystemT for regional hyperthermia.  Regional hyperthermia is
utilized  where  a systemic treatment is not necessary,  and
isolated  limb  perfusion, a form of regional  hyperthermia,
which  was  developed  40 years ago to treat  patients  with
melanoma  and sarcoma of the limb.  Preclinical  trials  are
also being conducted for a Phase I trial to involve isolated
limb perfusion for melanomas and sarcomas of the limbs.
Pre-clinical  trials are being conducted  at  M.D.  Anderson
Cancer  Center  in preparation for a Phase  I/II  trials  to
involve  thermochemotherapy hemi-perfusion of patients  with
pelvic or lower extremity recurrences of different types  of
cancer.   These  pre-clinical  studies  are  being  used  to
develop  the  surgical techniques necessary for  a  clinical
trial  on  humans and to train and familiarize the  center's
staff in the use of the system.

The  Cancer Center Protocol Committee of Wake Forest  School
of  Medicine  has approved a protocol concept to  conduct  a
pilot  study  investigating the safety of the ThermoChem-HTT
for  intraperitoneal hyperthermic chemotherapy (IPHC) in the
treatment of advanced gastrointestinal and ovarian cancers.
The technique of IPHC has been done at Wake Forest School of
Medicine  since 1992 utilizing a non-standardized  perfusion
setup.   The ThermoChem-HTT can possibly make the  technique
more  efficient  with  better  temperature  monitoring   and
control.   An  IDE has been approved by the FDA  to  conduct
this human trial.

IDT's Medical and Scientific Advisory Board consists of  the
three  following professionals. Currently, none of the board
members  receive  a fee for serving on the  board,  but  are
reimbursed for expenses incurred.

Corklin  R. Steinhart, M.D., Ph.D., is the medical  director
of  special immunology services at Mercy Hospital in  Miami,
Florida.

Milton  B. Yatvin, Ph.D., is a professor in the Radiation  &
Thermal  Biology Division, Department of Radiation  Oncology
at Oregon Health Sciences University in Portland, Oregon.

Stephen R. Ash, M.D., F.A.C.P., is the Chairman of the Board
and  Director of Research and Development of HemoCleanse,  a
corporation located in West Lafayette, Indiana.

The  Company has expensed approximately $9,789,000  on  this
project  through  December  31,  1998,  which  includes  the
Company's  acquisition of HemoCleanse common  stock,  via  a
purchase  of common stock and the conversion of a loan  into
common stock.

Other Projects

Implantable Technology

In  April 1996, BICO was granted FDA approval to market  its
theraPORTr Vascular Access System ("VAS").  The approval was
in  connection with the Company's 510(k) Notification  filed
in  January  1996.  The device is comprised of a  reservoir,
which is implanted beneath the skin in the chest region with
a  catheter  inserted  in a vein and   provides  a  delivery
system   for  patients  who  require  continual  injections.
Because  such  repeated injections can cause veins  to  shut
down   and  collapse,  the  theraPORTr  offers  an  improved
delivery  system  by eliminating that vascular  trauma.   If
necessary   to   accommodate  multiple  drug  therapy   with
incompatible  drugs,  dual ports  can  be  implanted.   Such
devices  are  frequently used in cancer drug  therapy.  BICO
began  selling the standard ports during the second  quarter
of  1997.   A  second  device with a low  profile  has  been
developed  for pediatric use, and a 510(k) was submitted  to
the  FDA in November 1997 for marketing approval.  In  early
February,  1998, BICO submitted a supplement to the  FDA  in
response  to  a  request  for additional  information.   The
Company is currently developing a dual port device and plans
to submit another 510(k) for that device in the near future.
Through its subsidiary, Coraflex Inc. ("Coraflex"), BICO  is
engaged  in  the development of a polyurethane  heart  valve
which management believes may not have the disadvantages  of
the  mechanical  and  bioprosthetic valves  currently  being
marketed.   The Coraflexr valve, which resembles  the  human
heart's  aortic  valve, is made by means  of  a  proprietary
manufacturing  process.   The  polyurethane  used   in   the
construction  of  the  heart valve is believed  by  BICO  to
exhibit  strength  and  fatigue  resistance  which   compare
favorably  with that of other materials used for  prosthetic
valves.   In vitro testing, some of which has been performed
through  the  Children's  Hospital  of  Pittsburgh,  of  the
Coraflexr  valve  to date has demonstrated superior  fatigue
resistance   and  flow  characteristics  relative   to   the
currently  available  bioprosthetic and mechanical  devices,
respectively.   Additional development and testing  must  be
conducted by BICO prior to its making an application to  the
FDA  for approval to begin clinical testing in humans.  BICO
will need additional financing to complete  clinical testing
of  the valve and to begin production.  No assurances can be
made  that  BICO  will  receive  the  necessary  funding  to
complete testing, will receive FDA-marketing approval,  will
be  able  to produce and sell the valve, or that  the  valve
will be commercially viable.

BICO  also  has  developed technology for other  implantable
devices,  such  as  hemodialysis ports, implantable  insulin
dispensers  and  rate-adaptive pacemakers.   Because  BICO's
management decided to focus most of the Company's  resources
on  the  research and development of the Noninvasive Glucose
Sensor,   little  progress  was  made  on  these   projects.
Consequently,  some  of  these  devices  are   in   a   very
preliminary stage of development, and it is unclear at  this
time whether their development will be pursued or completed.
Functional Electrical Stimulator Project.  The Company has
discontinued its functional electrical stimulator project
due to a loss of orders from NeuroControl, its sole
purchaser.  Because these products accounted for the
majority of the Company's sales revenues, this loss is
significant and will have a corresponding negative impact
upon the Company's cash flows, liquidity and revenue

Metal-Plating Technology

During  1998,  the Company acquired a majority  interest  in
International Chemical Technologies, Inc. ("ICTI") from  its
existing  majority shareholders, none of whom had any  prior
affiliation  with  the  Company.  In  connection  with  such
purchase, the Company paid consideration consisting of cash,
common stock, and the undertaking to make certain additional
payments (See, "Management's Discussion and Analysis").
ICTI  developed a metal-coating or plating process known  as
cemkoter,  a hard, wear-resistant coating engineered  to  be
environmentally  safe and cost effective.  ICTI  obtained  a
patent  on the product.  Cemkoter began as an answer to  the
search  for  an  environmentally  friendly  replacement  for
chrome, and testing revealed additional attractive features.
During  1998,  ICTI focused on the research and development,
testing and application of cemkoter on a number of parts and
products  for various companies.  For example, research  and
testing was conducted to determine whether cemkoter could be
produced   to   meet   military  and   commercial   aircraft
specifications.

When  the Company acquired its interest in ICTI, the Company
made  disclosures in its Form 8-K, which contained estimates
of  the  potential  revenues  of  both  the  metal-finishing
industry  and  the potential revenue of ICTI.   The  Company
also  disclosed, based on estimates as of the  date  of  the
acquisition,   that  it  expected  cemkoter   to   "generate
immediate  revenue  and be a major profit  center"  for  the
Company.   The  results have differed  materially  from  the
Company's  initial  estimates.  ICTI  did  not  achieve  any
significant  revenue  during  1998.   The  Company's   early
estimates  were based upon its assessment not  only  of  the
marketability  of the product, but on the Company's  ability
to  penetrate the metal finishing market using the  features
of   the  product.   The  Company's  actual  experience  has
indicated  that  it is much more difficult  to  exploit  the
existing market, regardless of whether the Company's product
has  superior features.  As a result, the Company  has  been
compelled  to  adjust its marketing strategy.   Accordingly,
the Company can no longer estimate the amounts or timing  of
any revenue or profit which may be generated by cemkoter.
A  new  Chief Executive Officer for ICTI has been hired  and
assumed his position effective January 1, 1999.  Among other
duties,  the new CEO, who has more than 37 years' experience
in  the  metal finishing industry, will thoroughly  evaluate
the  Company's  current cemkoter product as  well  as  other
metal coatings for use at ICTI.

The information set forth herein regarding BICO's projects
is of a summary nature, and the status of each project is
subject to constant change.  There can be no assurances as
to the completion or success of any project.

RESEARCH AND DEVELOPMENT

The Company continues to be actively engaged in the research
and  development  of new products.  Its major  emphasis  has
been  the  development of a Noninvasive Glucose Sensor.   In
order to raise funds for the research and development of new
products, the Company and Diasensor.com have conducted sales
of  stock.   (See, "MANAGEMENT'S DISCUSSION AND ANALYSIS  OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS").

MARKETING AND DISTRIBUTION

Petrol  Rem  began marketing of its bioremediation  product,
PRPr,  in mid-1993, and is now sold in quality marine supply
stores  in  the coastal areas of the United States,  Canada,
Europe and South East Asia.   These projections are based on
management's belief, as to which there can be no assurances,
that  the development and manufacture of those products will
continue to proceed successfully and on schedule.


PATENTS, TRADEMARKS AND LICENSES

The  Company  owns  patents on certain of its  products  and
files applications to obtain patents on new inventions  when
practical.   Additionally, the Company endeavors  to  obtain
licenses  from others as it deems necessary to  conduct  its
business.

The Company also relies upon trade secret protection for its
confidential  and proprietary information.   Although  BICO,
Diasensor.com and their affiliates take all reasonable steps
to   protect   such  information,  including  the   use   of
Confidentiality Agreements and similar provisions, there can
be  no  assurance that others will not independently develop
substantially   equivalent   proprietary   information    or
techniques,  otherwise gain access to  the  Company's  trade
secrets,  disclose such technology, or that the Company  can
meaningfully protect its trade secrets.

Noninvasive Glucose Sensor

Diasensor.com   owns   a   patent   entitled   "Non-Invasive
Determination of Glucose Concentration in Body of  Patients"
(the  "Patent")  which covers certain aspects of  a  process
for  measuring  blood  glucose levels  noninvasively.   Such
Patent was awarded to BICO's research team in December  1991
and  was  sold  to  Diasensor.com  pursuant  to  a  Purchase
Agreement   dated  November  18,  1991  (See,  "Intercompany
Agreements").   The Patent will expire, if  all  maintenance
fees  are paid, no earlier than the year 2008.  If marketing
of  a  product made under the Patent is delayed by  clinical
testing  or regulatory review, an extension of the  term  of
the  Patent may be obtained.  Diasensor.com's Patent relates
only  to  noninvasive sensing of glucose but  not  to  other
blood  constituents.  Diasensor.com has filed  corresponding
patent applications in a number of foreign countries.
A  second  patent application was filed by BICO in  December
1992,  which  was  assigned to Diasensor.com.   This  second
patent contained new claims which extend the coverage  based
upon  additional  discoveries and data  obtained  since  the
original  patent  was  filed.  The  patent  application  was
amended in October 1993, and was granted in January 1995.

In  May 1993, four additional patent applications were filed
by BICO's research teams related to the methods, measurement
and  noninvasive determination of analyte concentrations  in
blood.

As  of  March,  1999, a total of seven U.S.,  including  two
design  patents,  have been issued, all of which  have  been
assigned  to  Diasensor.com,  and  additional  patents   are
pending.     Corresponding  patent  applications  have  been
filed  in  foreign  countries where the Company  anticipates
marketing the Noninvasive Glucose Sensor.

Diasensor.com  or BICO may file applications in  the  United
States  and  other countries, as appropriate, for additional
patents  directed  to  other  features  of  the  Noninvasive
Glucose Sensor and related processes.

Those  competitors known by BICO to be currently  developing
non-invasive glucose sensors own patents directed to various
devices   and   processes  related  to    the   non-invasive
monitoring  of  concentrations of glucose  and  other  blood
constituents.  It is possible that such patents may  require
the Companies  to alter any model of the Noninvasive Glucose
Sensor   or  the  underlying  processes  relating   to   the
Noninvasive Glucose Sensor, to obtain licenses, or to  cease
certain activities.

The Company also relies upon trade secret protection for its
confidential  and proprietary information.   Although   BICO
and  Diasensor.com take all reasonable steps to protect such
information, including the use of Confidentiality Agreements
and  similar  provisions, there can  be  no  assurance  that
others   will   not   independently  develop   substantially
equivalent proprietary information or techniques,  otherwise
gain  access  to the Company's trade secrets, disclose  such
technology, or that the Company can meaningfully protect its
trade secrets.

The  Company was granted trademark protection for  the  term
"Diasensorr  1000", which is intended for use in  connection
with  the Diasensorr  models.  The Company intends to apply,
at   the  appropriate  time,  for  registrations  of   other
trademarks as to any future products of the Company.

Whole-Body Hyperthermia

In  September  1992, a research team funded by  the  Company
applied for a domestic patent in connection with the use  of
PISH  and the treatment of HIV-positive patients; the patent
has  been  assigned to IDT.  In October 1994,  IDT  received
notification that the patent application for its specialized
method  for whole-body extracorporeal hyperthermia had  been
issued.    A  Continuation  in  Part,  which  included   the
ThermoChem  SystemT was  filed by IDT, was allowed  in  July
1995 and issued in December 1995.

The  patent,  entitled "Specialized Perfusion  Protocol  for
Whole-Body Hyperthermia", contains seventeen claims for  the
hyperthermia procedure, including the method of heating  all
of  the  blood in the extracorporeal blood circuit to  raise
the  patient's core temperature to approximately 42  degrees
centigrade.  A Continuation in Part, which was filed by  IDT
and  included  the ThermoChem SystemT, was allowed  in  July
1995 and was issued in December 1995.

Implantable Technology

During   1995,  the  Company  renewed  its  U.S.   trademark
registration  for the name Coraflexr, which  was  originally
granted  in  1988.  The Company has also obtained  trademark
registration  for  the name theraPORTr   (See,  "BUSINESS  -
Implantable Technology).

In  October,  1996,  a patent was issued for  the  Company's
heart valve product.

Bioremediation

In  1992  and  1993,  Petrol  Rem  applied  for  patents  in
connection with its bioremediation product, all of which are
still   pending.   The   Company  has   received   trademark
authorization for the use of the product names   PRPr,  BIO-
SOKr,   BIO-BOOMr,  and  Oil  Busterr  (See,   "BUSINESS   -
Bioremediation").

WARRANTIES AND PRODUCT LIABILITY

The  Company's present product liability insurance  coverage
is  $1,000,000 in the aggregate, which management  considers
to   be   a   sufficient  amount  due   to   the   Company's
discontinuance of sales of certain products,  including  its
former   pacemaker   line  and  its  functional   electrical
stimulators, and potential exposure to liability.

SOURCE OF SUPPLY

In  connection with the manufacture the Noninvasive  Glucose
Sensor,  the  Company will be dependent upon  suppliers  for
some of the components required for the devices fabrication.
The Company plans to assemble the devices, but will need  to
purchase components, including some components which will be
custom  made for the Company from certain suppliers.   These
components will not be generally available, and the  Company
may  become dependent upon those suppliers, which do provide
such specialized products.

If the Company successfully develops other new products, and
receives  the  regulatory  approvals  to  manufacture   such
products,  it may become dependent on certain suppliers  for
custom parts.

COMPETITION

Noninvasive Glucose Sensor

With  the rapid progress of medical technology, and in spite
of   continuing  research  and  development  programs,   the
Company's developmental products are always subject  to  the
risk  of obsolescence through the introduction by others  of
new  products or techniques.  Management is aware that other
research  groups are developing noninvasive glucose sensors,
but has limited knowledge as to the technology used or stage
of development of these devices.  There is a risk that those
other  groups will complete the development of their devices
before  the  Company  does.  To the best  knowledge  of  the
Companies, there is no other company currently producing  or
marketing noninvasive sensors for the measurement  of  blood
glucose similar to those being developed by the Company.

The  Noninvasive Glucose Sensor will compete  with  existing
invasive  glucose  sensors.  Although the  Company  believes
that   the  features  of  the  Noninvasive  Glucose  Sensor,
particularly  its  convenience and the fact  that  no  blood
samples  are required, will compete favorably with  existing
invasive glucose sensors, there can be no assurance that the
Noninvasive Glucose Sensor will compete successfully.   Most
currently available invasive glucose sensors yield  accuracy
levels of plus or minus 25% to 30%, range in price from  $80
to $200, not including monthly costs for disposable supplies
and  accessories, and are produced and marketed by eight  to
ten   sizable  companies.   Those  companies  include  Miles
Laboratories,  Inc.,  Boehringer Mannheim  Diagnostics,  and
Lifescan (an affiliate of Johnson & Johnson).

Such  companies have established marketing and sales forces,
and represent established entities in the industry.  Certain
of  the Company's competitors (including their corporate  or
joint  venture  partners or affiliates) currently  marketing
invasive   glucose   sensors  have   substantially   greater
financial,  technical,  marketing and  other  resources  and
expertise than Diasensor.com, and may have other competitive
advantages  over  Diasensor.com (based on any  one  or  more
competitive factors such as accuracy, convenience, features,
price   or   brand   loyalty).   Additionally,   competitors
marketing existing invasive glucose sensors may from time to
time  improve  or refine their products (or  otherwise  make
them   more  price  competitive)  so  as  to  enhance  their
marketing   competitiveness  relative   to   the   Company's
Noninvasive Glucose Sensor.  Accordingly, there  can  be  no
assurance that the product, or Diasensor.com as marketer for
the  Noninvasive  Glucose Sensor, will be  able  to  compete
favorably with such competition.

In addition to the invasive glucose sensors discussed above,
there  exist  invasive sensors, such as the  Yellow  Springs
Sensor  (the "Clinical Sensors") which the Company  believes
achieve accuracy levels within 30 minutes, which are  within
plus or minus 3% of actual glucose levels.  The Company will
also  compete with this technology, which is relatively non-
portable  and  bears a price of approximately  $8,000.   The
Clinical  Sensors are presently used almost  exclusively  by
hospitals  and  other institutions, and, like  all  invasive
sensors,  still  require  repeated  blood  samples.   It  is
anticipated that the Company will also face competition from
the  Clinical  Sensors,  at  least  in  some  markets.   For
example,  certain institutions that might otherwise purchase
Diasensor.com's products may decide to continue to  use  the
Clinical  Sensors,  whether due  to  the  superior  accuracy
levels  of that sensor or institutional or historical  bias,
despite  what  Diasensor.com believes will be  the  superior
convenience  and  cost  factors of the  Noninvasive  Glucose
Sensor.

The   Company  faces  more  direct  competition  from  other
companies  who  are  currently  researching  and  developing
noninvasive  glucose sensors.  The Company has very  limited
knowledge  as to the stage of development of these  sensors;
however,  should  another  company  successfully  develop  a
noninvasive glucose sensor, achieve FDA approval, and  reach
the  market  prior to the Company, it would have an  adverse
effect upon the Company's ability to market its sensor.

The  companies, which are currently engaged in the  research
and/or  development of noninvasive glucose sensors,  include
the  following: CME Telemetrix, Inc. ("CME"),  Cygnus,  Inc.
("Cygnus"), Technical Chemicals and Products, Inc. ("TCPI").
Although  the  Company  is not aware,  there  may  be  other
companies engaged in similar research and development.   The
named  companies, and others, may be further along in  their
development  than the Company is aware, and may have  access
to  capital  and  other resources which would  give  them  a
competitive advantage over the Company.  The following is  a
summary  of  the Company's current knowledge  regarding  the
companies listed.

CME  has  developed a product called GlucoNIRr.  In February
1999,   they   announced  an  FDA  meeting  concerning   the
development and initial testing of their device for  use  in
institutional  settings such as nursing  homes.   CME  is  a
Canadian  company, and have received approval to sell  their
device in Canada.

Cygnus  of Redwood City, California has developed  a  device
which,  when  fastened  to the wrist, extracts  interstitial
fluid by means of an electrical voltage applied between  the
wrist  and the device.  Cygnus has submitted the first  part
of  a  Premarket Approval Application for the device, called
the  Gluco Watchr AutomaticGlucose Biographer.  Cygnus plans
to submit the remainder of their submission by June 1999.

TCPI  of Pompano Beach, Florida, is developing the use of  a
disposable patch which is a dermal transport system for  the
transport  of interstitial fluid.  The patch is  applied  to
the forearm and read with a portable reflective meter.  TCPI
estimates that the company is approximately 30% of  the  way
toward the completion of its FDA application.

Although not noninvasive like the Diasensor 1000r,   devices
which  claim  to be less invasive than standard fingerpricks
are  being  introduced.  One device, made  by  Chronimed  in
Minneapolis, uses a laser rather than a sylett to draw blood
from  the  finger.  Another company, Amira Medical,  uses  a
small  needle in conjunction with a meter, which draws blood
from  the forearm, upper arm or thigh.  The FDA has approved
these  devices.  These devices are purported by their makers
to be improvements on the fingerprick glucose sensors, which
use stylets to draw blood.

Certain   organizations  are  also   actively   engaged   in
researching  and developing technologies that  may  regulate
the use or production of insulin or otherwise affect or cure
the  underlying  causes of diabetes.  Diasensor.com  is  not
aware  of  any  new  or  anticipated technology  that  would
effectively  render the Noninvasive Glucose Sensor  obsolete
or  otherwise  not  marketable  as  currently  contemplated.
However, there can be no assurance that future technological
developments  or  products  will not  make  the  Noninvasive
Glucose  Sensor significantly less competitive  or,  in  the
case   of  the  discovery  of  a  cure  for  diabetes,  even
effectively obsolete.

GOVERNMENT REGULATIONS

Since  most of the Company's products are "medical  devices"
as  defined by the Federal Food, Drug and Cosmetic  Act,  as
amended  (the  "Act"), they are subject  to  the  regulatory
authority  of  the  FDA.   The FDA  regulates  the  testing,
marketing  and  registration  of  new  medical  devices,  in
addition to regulating manufacturing practices, labeling and
record  keeping procedures.  The FDA can subject the Company
to inspections of its facilities and operations and may also
audit  its record keeping procedures at any time.  The FDA's
Good  Manufacturing Practices for Medical Devices  specifies
various requirements for BICO's manufacturing processes  and
maintenance of certain records.

In  March  1993, the FDA announced that it intends  to  take
steps  to  enhance  its review and approval  procedures  and
guidelines  relating  to  the testing  of  medical  devices,
including  imposing a higher standard of  proof  on  medical
devices  that  might pose potential health risks.   BICO  is
unable  to  determine at this time whether such  action  may
have a material adverse effect on the approval by the FDA of
the  Noninvasive  Glucose Sensor, the hyperthermia  delivery
system,  any other product, or on BICO's business generally.
The  extent of federal, state, local or foreign governmental
regulations that might result from any future legislation or
administrative action, and the impact of any such action  on
BICO's   products   or   business,  cannot   be   accurately
determined.

In   1997,  Congress  enacted  legislation  directed  toward
regulation  of  pharmaceutical  and  medical  devices.   The
impact  of the FDA Administration Modernization Act of  1997
("FDAMA")  is expected to reduce the quantity of information
a  company  must submit for approval of devices  and  allows
product  and  establishment licenses  to  be  combined.   In
certain  sections  of  the FDAMA concerned  with  Risk-Based
Regualtion   of  Medical  Devices,  the  agency  promulgated
guidance   for   industry  on  the  use  of   national   and
international consensus standards.  The FDA anticipates that
the  use  of  consensus standards will accelerate  premarket
notification  clearance.  The impact of  the  FDAMA  on  the
approval  process for obtaining marketing approval  for  the
Diasensor 1000r has yet to be established.

Noninvasive Glucose Sensor

Because  the  Noninvasive  Glucose  Sensor  is  subject   to
regulation by the FDA, the Company will be required to  meet
applicable FDA requirements prior to marketing the device in
the  United  States.   These requirements  include  clinical
testing,  which  must be supervised by the IRBs   of  chosen
hospitals.    Clinical  testing  began  on  the  Noninvasive
Glucose  Sensor  in May 1993 (See, "Current  Status  of  the
Noninvasive  Glucose Sensor").  In January 1994 the  Company
submitted  a 510(k) Notification to the FDA for approval  to
market   the   Diasensor  1000r.   The  510(k)  Notification
indicated  that the device is "substantially  equivalent"  a
similar existing device based on the following factors:  (i)
whether  the  device  has  the same  "intended  use"  as  an
existing  device; and (ii) whether the device has  the  same
technological characteristics as the existing device, unless
the different technological characteristics do not adversely
affect  its safety and effectiveness.  The Company  formally
withdrew its 510(k) Notification after an FDA panel  review,
in  which  the majority of the reviewers were not  satisfied
that  the Company had produced sufficient evidence to  prove
equivalence  to an existing device.  In further  discussions
with  the FDA, it was recommended that the Company  filed  a
PMA  and conduct an additional clinical study under an  IDE.
Biocontrol  will  submit a modular  PMA,  which  allows  the
various aspects of the submission to be made in modules over
a  period  of  time.  The Modular PMA is  a  new  method  of
submitting  information to the FDA, and  resulted  from  the
passage   of  the  FDAMA  in  1997.   The  Company  recently
submitted a PMA Shell, which outlines plans for the  Modular
PMA submission.

The  submission  of  a  PMA will require  that  the  Company
conduct  additional testing, and may result  in  significant
delays  and  increased expenses.  The FDA's PMA  process  is
more   expensive   and   time  consuming   than   a   510(k)
Notification,  and may also result in additional  delays  in
the   time  period  in  which  the  Companies  could   begin
manufacturing  and  marketing the device  for  sale  in  the
United  States.  The time elapsed between the completion  of
clinical testing at IRBs and the grant of marketing approval
by  the FDA is uncertain, and no assurance can be given that
approval to market the device in the U.S. will ultimately be
obtained.

In  June  of  1998,  the FDA instituted new  Quality  System
Regulations   ("QSR"s)  which  took  the   place   of   Good
Manufacturing  Practices.  These regulations  align  closely
with  those  guidelines  specified by  the  ISO  which  sets
quality  requirements  for products  being  shipped  to  the
European Union ("EU").  These regulations have added control
of the design process as well as the manufacturing process.

On  January 14, 1998, the Company received certification  to
ISO  9001,  and on June 23, 1998, it received the  CE  mark.
The  CE  mark and the ISO certification is provided  by  the
regulatory  bodies  of the EU or private  "notified  bodies"
which are third-party companies certified by the EU as  able
to  also  provide the certifications.  The CE mark indicates
that the device adheres to quality systems guidelines of the
ISO and its European signatory,  European Norm Standards for
Medical  Devices ("EN").  Rigorous audits were conducted  at
the  Company  to certify that the Company's development  and
manufacturing  procedures, as well as  the  Diasensor  1000r
itself  met  the international standards laid  down  by  the
Medical Device Directive.  In order to maintain its approval
to ship the device into the EU, the Company must be vigilant
in  its adherence to its quality system, and audits will  be
conducted  on  an  annual basis by its third-party  notified
body  to  verify  that  the Company continues  to  meet  the
standards.

The  Company  may also be required to comply with  the  same
regulatory  requirements prior to introducing the Diasensorr
2000, or other models of the Noninvasive Glucose Sensor,  to
the  market.   Any changes in FDA procedures or requirements
will   require   corresponding  changes  in  the   Company's
obligations  in  order  to  maintain  compliance  with   FDA
standards.  Such changes may result in additional delays  or
increased expenses.

BICO's  products  may also be subject to foreign  regulatory
approval prior to any sales.

The  FDA's Good Manufacturing Practices for Medical  Devices
specifies  various  requirements  for  BICO's  manufacturing
processes and maintenance of certain records.

Whole-Body Extracorporeal Hyperthermia

HemoCleanse  has  received FDA approval of its  Form  510(k)
Notification  in connection with the use of the  BioLogic-DT
model,  which  is  used  in drug detoxification  procedures.
However,  the 510(k) Notification process, which is intended
to be a shorter, less complex FDA procedure as compared to a
full  Pre-Market Approval process, may not be available  for
the   ThermoChem  SystemT  model  which  is  used   in   the
hyperthermia  project.   IDT and HemoCleanse  continuing  to
hold  discussions  with  the FDA  regarding  the  number  of
patients  which must be treated with the ThermoChem  SystemT
before  the  FDA will accept an application  to  market  the
delivery  system  in the U.S., and the such  companies  have
retained  a  biostatistician to assist them in  making  that
determination.  The Company believes, based on  the  federal
government's statements regarding the priority treatment  to
be  afforded to drugs and procedures in connection with  the
treatment  of  HIV  and AIDS, that its FDA  application,  in
whatever  form, may receive expedited review.  If  either  a
Pre-Market Approval application or a 510(k) Notification  is
approved  by  the  FDA, it would allow  IDT  to  market  the
device.

Although  the  federal government has publicly  stated  that
experimental  drugs  and procedures in connection  with  the
treatment of HIV will receive priority treatment, there  can
be  no assurances that any future 510(k) Notifications, Pre-
Market  Approval  applications,  or  IDEs  will  obtain  FDA
approval.  Without FDA approval, the delivery system  cannot
be used or marketed in the United States.

Bioremediation

The  Company's bioremediation project will be supervised  by
NETAC,  a private group endorsed and supervised by  the  EPA
and  the Pennsylvania Department of Environmental Resources.
In addition, each state in which the bioremediation products
are used will apply its own environmental regulations to the
use and sale of the products.


HUMAN RESOURCES

As  of  December  31,  1998, the Company  had  76  full-time
employees  who were located primarily in either the  Indiana
or  Pittsburgh  locations.  Due to its  cash  flow  problems
during  1998, the Company was compelled to lay  off  certain
employees; other employees

The  Company has employment contracts with some of its  non-
officer employees, most of whom are scientists and engineers
employed   in   the   Company's  research  and   development
operations.  Such contracts are typically for terms of  five
years  and contain confidentiality provisions.  The  Company
also  employs consultants as needed; some of the consultants
are  employed pursuant to consulting contracts which contain
confidentiality provisions.

Item 2. Properties

During   1998,   the  Company's  research  and   development
operations  are  located in a 20,000 square  foot  one-story
building  at 300 Indian Springs Road, Indiana, Pennsylvania.
The  building is leased by the Company from the  300  Indian
Springs  Road  Real Estate Partnership (the  "Partnership").
The  lease period is 20 years and runs concurrently for  ten
years  with  a  mortgage arranged by the  Partnership  at  a
stated  amount of rent.  At the end of ten years, the amount
of  rent  paid  by the Company is subject to  renegotiation,
based  on  refinancing  of  a balloon  payment  due  on  the
mortgage,  unless  the mortgage has been  satisfied  by  the
Partnership.    In  addition to rent, the Company  pays  all
taxes,  utilities, insurance, and other expenses related  to
its operations at that location (See, "CERTAIN RELATIONSHIPS
AND  RELATED  TRANSACTIONS").  The Company has vacated  this
building  and the partnership has listed it for  sale.   The
operations and activities formerly located on Indian Springs
Road  have  been moved to the manufacturing space  discussed
below.

In  September  1992,  BICO entered  into  a  ten-year  lease
agreement with the Indiana County Board of Commissioners for
22,500 square feet of space which BICO plans to use for  the
manufacture   of  the  Noninvasive  Glucose   Sensor,   once
developed.   The facility, comprised of 22,500 square  feet,
has   been  reconfigured  to  BICO's  specifications.   BICO
recently  moved  the  balance of its  Indiana,  Pennsylvania
operations   to   this  space.     This  facility   contains
sufficient  additional  space to accommodate  the  Company's
projected operations through 1999.

Item 3.  Legal Proceedings

During  April  1998,  the Company and  its  affiliates  were
served with subpoenas by the U.S. Attorneys' office for  the
U.S.   District   Court   for  the   Western   District   of
Pennsylvania.   The  subpoenas requested certain  corporate,
financial and scientific documents and the Company continues
to provide documents in response to such requests.

On  April 30,1996, a class action lawsuit was filed  against
the  Company,  Diasensor.com  and  individual  officers  and
directors.   The  suit, captioned Walsingham  v.  Biocontrol
Technology,  et al., has been certified as a  class  action,
and  is  pending in the U.S. District Court for the  Western
District  of  Pennsylvania.   The  suit  alleges  misleading
disclosures  in  connection  with  the  noninvasive  glucose
sensor and other related activities.  By mutual agreement of
the  parties,  the  suit remains in the  pre-trial  pleading
stage, and the Company is unable to determine the outcome or
its impact upon the Company at this time.

The  Company  had leased space in two locations  in  Indiana
County  for its manufacturing facilities.  One space,  which
has  been  upgraded  with leasehold improvements,  is  still
being used by the Company.  The other space, which had  been
leased  as  expansion space, was the subject of  a  judgment
proceeding.   The  Company has given up  possession  of  its
expansion space in Indiana County in response to the  filing
of  such  judgment for nonpayment of lease fees.  In  return
for  possession of the space, the leaseholder agreed not  to
pursue any action on the judgment at this time.


Item 4.  Submission of Matters to a Vote of Security Holders
         Not applicable.


Item 5.  Market for Registrant's Common Equity and Related
         Stockholder Matters


                MARKET PRICE FOR COMMON STOCK

      The  Company's common stock is traded  on  the  Nasdaq
Electronic  Bulletin Board under the symbol  "BICO"  and  is
also reported under the symbol "BIOCNTRL TEC".  On March 15,
1999,  the closing price for the common stock of the Company
as  reported  by  Nasdaq  was  $.06.   Pursuant  to  current
disclosure  guidelines, the following table sets  forth  the
high  and  low  sales  prices for the common  stock  of  the
Company  during  the  calendar  periods  indicated,  through
December 31, 1998 as reported by Nasdaq:

Calendar Year and Quarter                High               Low


     1996 First Quarter                 3.9375              1.500
          Second Quarter                3.0625              1.406
          Third Quarter                 2.969               1.625
          Fourth Quarter                2.4375               .656

     1997 First Quarter                 1.500                .625
          Second Quarter                1.000                .3125
          Third Quarter                  .719                .3125
          Fourth Quarter                 .406                .0937

     1998 First Quarter                  .25                 .0937
          Second Quarter                 .1875               .0313
          Third Quarter                  .359                .0313
          Fourth Quarter                 .126                .049


      As of December 31, 1998, the Company had approximately
40,000 holders, including those who hold in street name, for
its  common stock and no holders of record for its preferred
stock.

      Because  Nasdaq revised its requirements for companies
listed  on its Small-Cap market to include a minimum trading
price of $1.00, the Company's common stock was delisted from
the  Small-Cap  Market  and is now   listed  on  the  Nasdaq
Electronic Bulletin Board. The risk exists that its  trading
volume and price will decrease.


Employment Agreement Provisions Related to Changes in Control

BICO  has  entered  into agreements (the "Agreements")  with
Fred  E.  Cooper,  David L. Purdy, Anthony J.  Feola,  Glenn
Keeling,  and  two  non-executive  officer  employees.   The
Agreements  provide  that  in the  event  of  a  "change  of
control"  of  BICO, BICO is required to issue the  following
shares  of common stock, represented by a percentage of  the
outstanding   shares  of  common  stock   of   the   Company
immediately  after the change in control: five percent  (5%)
to   Mr.  Cooper  and Mr. Purdy; four percent  (4%)  to  Mr.
Feola;  three percent (3%) to Mr. Keeling; and  two  percent
(2%)  each  to the two non-executive officer employees.   In
general,  a  "change  of control" is  deemed  to  occur  for
purposes  of the Agreement: (i) when 20% or more  of  BICO's
outstanding  voting stock is acquired by  any  person,  (ii)
when  one-third  (1/3) or more of BICO's directors  are  not
Continuing  Directors  (as defined in  the  Agreements),  or
(iii)  when  a controlling influence over the management  or
policies  of BICO is exercised by any person or  by  persons
acting as a group within the meaning of Section 13(d) of the
Securities  Exchange Act of 1934, as amended (the  "Exchange
Act") (See, "MANAGEMENT - Employment Agreements").


Item 6.  Selected Financial Data


                    YEARS ENDED DECEMBER 31st


                    1998        1997         1996       1995           1994

Total Assets    $9,835,569 $12,981,300  $14,543,991  $9,074,669      $6,375,778

Long-Term
Obligations     $1,412,880 $ 2,697,099  $ 2,669,727  $  175,330      $  163,201

Working Capital($9,899,008)$   888,082  $ 1,785,576  $3,188,246      $2,612,884

Preferred Stock $        0 $         0  $         0  $   37,900      $   54,900

Net Sales       $1,145,968 $ 1,155,907  $   597,592  $  461,257      $  184,507

TOTAL           $1,378,213 $ 1,426,134  $   776,727  $  755,991      $  481,453
REVENUES

Warrant         $        0 $ 4,046,875  $ 9,175,375  $12,523,220     $        0
Extensions

Benefit         $        0 $         0  $         0  $         0     $        0
(Provision)for
Income Taxes

Net Loss       ($22,402,644)($30,433,177)($24,045,702)($29,420,345)($11,672,123)

Net Loss per   ($       .08)($       .43)($       .57)($       .84)($       .43)
Common Share


Cash Dividends
per share:
   Preferred    $         0  $         0  $         0  $         0    $       0
   Common       $         0  $         0  $         0  $         0    $       0


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

The  following is a summary of the more detailed information
set forth in the financial statements attached hereto.  Data
from  all  year-end  periods are from the Company's  Audited
Financial   Statements.  Except  as  noted  otherwise,   all
discussions    reflect    fully    consolidated    financial
information.


                 Forward-Looking Statements

In   addition   to  other  sections  of  this  report,   the
Management's  Discussion and Analysis section also  contains
the  type of forward-looking statements discussed on page  2
herein.  Please refer to such discussion in connection  with
the information presented here.


               Liquidity and Capital Resources

Working  capital was ($9,899,008) at December  31,  1998  as
compared  to $888,082 at December 31, 1997, and   $1,785,576
at  December 31, 1996.  Working Capital fluctuations are due
primarily  to  the  varied capital-raising  efforts  of  the
Company  and  its affiliate Diasensor.com, which  aggregated
approximately $10,700,000 in 1998; $22,300,000 in 1997;  and
$21,600,000 in 1996, as well as a decrease  in net inventory
from $3,340,120 as of December 31, 1996 to $1,834,018 as  of
December 31, 1997, and to $74,515 as of December 31, 1998.

Cash  decreased  from  $3,802,874 at December  31,  1996  to
$2,759,067 at December 31, 1997 to $125,745 at December  31,
1998.   These  changes were attributable  to  the  following
factors.  The Company's sales of its securities raised funds
aggregating $10,700,000 during 1998; $22,600,000 during 1997
;  and  $21,600,000 during 1996.  During those periods,  the
Company's cash flows used by operating activities aggregated
$  11,855,294;  $19,121,752; and $19,972,000   respectively.
During  1998 and 1997, such activities included a $  .8  and
$2.1  million  increase in inventory reserves, respectively.
The  Company expended cash and other resources in connection
with  its purchase of a majority interest in ICTI, which  is
described  below.  In addition, the Company  recorded  a  $4
million  charge against operations due to warrant extensions
by  the  Company  and its subsidiary in 1997,  with  similar
charges of approximately $9 million in 1996. (See, Note J to
the  Financial  Statements).   The  Company's  other  assets
decreased from $669,243 at year-end 1997 to $200,000 at year-
end  1998  due to an allowance for related party receivables
in 1998.

In  March 1998, the Company acquired a majority interest  of
ICTI,  a  metal-plating  company in  Florida..   ICTI  is  a
development-stage company, which commenced operations in May
1997,  but  has  incurred  losses  to  date.   The  purchase
required  the Company to make a cash payment of  $1,030,000,
issue a $3,350,000 promissory note, 2 million shares of  the
Company's common stock, and other consideration (See Note  A
to the Financial Statements).

The  Company's  current liabilities increased by  $5,915,293
from  1997  to 1998; such increase was primarily due  to  an
increased  issuance of convertible debentures and cash  flow
problems during 1998.

The  Company continued to fund operations mostly from  sales
of   its   securities.   During  1998,  the  Company  issued
$10,700,000  of its 4% Subordinated Convertible  Debentures.
The  debentures have one-year terms, minimum holding periods
prior  to  conversion  and  mandatory conversion  provisions
During 1997,  the Company sold 22,000 shares of its Series B
convertible  preferred stock;  and issued $20.2  million  in
subordinated convertible debentures.

As  of  December 31, 1998 and 1997, the conversion price  of
the debentures would have been approximately $.059 and $.146
per  share, respectively, based upon a formula which applies
a discount to the average market price for the previous week
and  determined by the length of the holding period.  As  of
December 31, 1998 and 1997, the number of shares issued upon
conversion  of  all outstanding debentures was approximately
60.1  million  and 23.9 million shares, respectively,  which
would have reflected discounts of approximately 23% and 18%,
respectively.

Due to the Company's current limited sources of revenue, the
Company  plans  to seek additional financing which  will  be
used   to   finance  development  of,  and  to  proceed   to
manufacture, the Noninvasive Glucose Sensor and to  complete
the  development of its other projects.   No assurances  are
made  as  to  the  availability of any such financing  (See,
"BUSINESS").

The  Company's products are at various stages of development
and  will  require additional funding for completion.   This
paragraph  summarizes  the Company's  estimates  as  to  the
aggregate amounts needed to complete each project,  assuming
continued  testing  and  development  is  successful.    The
Company may choose to discontinue any of its projects at any
time  if  research  and  development efforts  indicate  that
continuation would be inadvisable.

The Company currently has a commitment for capital leases on
certain of its capital equipment and future commitments  for
new  capital  expenditures will be required to continue  the
Company's  efforts  in  research  and  development,  and  to
manufacture and market its existing products and  any  other
products it may develop.

As of March, 1999, the Company estimates that its short-term
liquidity needs will be met from currently available  funds.
The Company estimates that such funds will be sufficient  to
complete   the  research  and  development  stage   of   the
Noninvasive  Glucose Sensor, to complete the FDA  submission
process,  and  to begin marketing the device.   The  Company
anticipates  that  it  will  finance  those  expenses   with
existing funds, as well as funds raised through the sales of
its securities and from the other sources of funds described
herein.   The  Company has a history of successful  capital-
raising efforts; since 1989, and through December 1998, BICO
and   its   affiliate   Diasensor.com   have   raised   over
$110,000,000 in private and public offerings alone.

In  prior years, the Company met a portion of its short-term
working  capital  needs through development  contracts  with
other  organizations  and  through manufacturing  for  other
companies  on  a  contractual basis,  as  described  herein.
During   1996,  1997  and  1998,  the  Company  was  awarded
contracts  by  the Department of Veteran's  Affairs  Medical
Center   for  Case  Western  Reserve  University,   Shriners
Hospital  -  Philadelphia  Unit,  and  Austin  Hospital   to
manufacture FES products.  Such contracts generated revenues
of    $508,561,  $880,919 and $1,028,484 in 1996,  1997  and
1998,  respectively.  During 1998, orders  related  to  such
contracts  were  terminated by these other entities.   As  a
result,  the  Company has terminated FES project  activities
for the present, and may not  receive any additional revenue
on a going-forward basis.  (See, "BUSINESS").

In  view  of  BICO's  expenses resulting  from  its  product
development projects, and other factors discussed herein, as
compared  to  BICO's contract revenues, currently  available
funds,  and established ability to raise capital  in  public
and  private markets, BICO estimates that it will  meet  its
liquidity needs for a period of at least twelve months  from
December  31, 1998 from currently available funds, including
those  expected  to be raised via additional  sales  of  the
Company's securities.  This estimate is based, in part, upon
the  current  absence  of  any extraordinary  technological,
regulatory  or legal problems.  Should such problems,  which
could  include  unanticipated  delays  resulting  from   new
developmental   hurdles   in   product   development,    FDA
requirements,  or  the  loss of a key employee,  arise,  the
Company's estimates would require re-evaluation.  There  can
be  no  assurances  that  despite the  Company's  good-faith
efforts, its estimates will lead to accurate results.

The  Company's  long-term liquidity needs  are  expected  to
include  working capital to fund manufacturing expenses  for
its products and continued research and development expenses
for   existing   and  future  projects.    Delays   in   the
development  of  the  Company's  products  will  result   in
increased needs for capital from other sources.  The Company
anticipates  that such other sources will include  continued
sales  of  common  stock, and investment  partners  such  as
venture capital funds and private investment groups.   There
can  be  no  assurances given that adequate  funds  will  be
available.   If  the Company is unable to  raise  the  funds
necessary  to  fund  the  long-term  expenses  necessary  to
complete the development or manufacture of its products, the
Company will be unable to continue its operations.

As  described hereinabove, management believes  the  Company
has  sufficient liquidity to meet its projected expenditures
on  a  short-term  basis.   Absent additional  funding,  the
Company  will  have limited liquidity on a long-term  basis.
Moreover,  many demands on liquidity, such as technological,
regulatory  or  legal  problems, could cause  the  Company's
liquidity  to  be inadequate.  At present, the Company  does
not have any additional sources of liquidity, including bank
lines  of  credit.   Long-term  working  capital  needs  are
expected to be met through sales of the Noninvasive  Glucose
Sensor,  the  PRPr  bioremediation product,  and  other  new
products.  There can be no assurances that any such products
will be successfully marketed or commercially viable.
                              
                    Results of Operations

The  following  seven  paragraphs  discuss  the  Results  of
Operations  of the entire Company based on its  consolidated
financial statements.  A discussion of the business segments
follows.

In  1998,  the  Company's net sales increased to  $1,145,968
from $1,155,907 in 1997 and  $597,592 in 1996.  The increase
was  due  to  an  increase in all product  sales,  the  vast
majority  of  which  were from FES sales,  which  have  been
discontinued. (See, Note F to the Financial Statements).

In 1998, 1997 and 1996, the Company received interest income
in   the   amount   of  $182,033;  $165,977  and   $176,478,
respectively.  The fluctuation was due to the investment  of
the  Company's liquid assets (which are  composed  primarily
of  funds  raised via sales of securities), the availability
of such assets and applicable interest rates.  The Company's
other  income  decreased to $50,212 in 1998 as  compared  to
$104,250  in 1997 from $2,657 in 1996.  The fluctuation  was
due  primarily  to  payments made in connection  with  legal
actions.

In  1998, the Company's costs of products sold were $587,821
as  compared to $641,331 in 1997 and $325,414 in 1996.   The
increase  is  primarily  due to the Company's  corresponding
increases  in product sales, and products produced  pursuant
to   FES   and  IRS  Device  contracts,  which   have   been
discontinued.

The   Company's  research  and  development  expenses   were
$6,340,676 in 1998, a decrease from $6,977,590 in  1997  and
$8,742,922  in 1996.  The overall decrease was  due  to  the
Company's  realignment  of personnel  and  resources  in  an
effort  to  obtain  a  CE Mark for sale of  the  Noninvasive
Glucose Sensor outside the U.S., and, in 1998, to a loss  of
personnel due to cash flow problems.

In   1998,   General   and  Administrative   expenses   were
$11,560,345  a  decrease  from  $12,704,146  in  1997,   and
compared  to $8,963,693 in 1996.  The decrease in 1998  from
1997 was due to a loss in personnel and reduction in related
expenses.  The increase from 1996 to 1997 was due, in  part,
to  the allocation of funds to outside consultants and other
advisors to assist the Company in its efforts to obtain a CE
Mark.

During    1997,  the  Company  extended  177,800    warrants
originally granted to certain officers, directors, employees
and consultants in 1992, as compared to similar extension of
351,482  warrants  in  1996.  No such extensions  were  made
during  1998.   Because  the exercise  price  of  some  such
warrants ($.25 to $3.50) was lower than the market price  of
the  common stock at the time of the extensions $604,342 was
charged  to operations during 1996. During 1997, no  expense
was  charged to operations since the market price was  lower
than  of  the original warrant exercise price.  In addition,
a  similar  charge of $4,046,875 in 1997 and  $8,571,033  in
1996   was  made  by the Company's subsidiary, Diasensor.com
(See,  "EXECUTIVE COMPENSATION" and Note J to the  Financial
Statements).

Interest  expense on the Company's outstanding  indebtedness
was  $481,025 in 1998 as compared to $315,624  in  1997  and
$133,460  in  1996. The increase was due to an  increase  in
capital   leases  and  interest  payment  on  the  Company's
subordinated debentures.

                     Segment Discussion

For  purposes of accounting disclosure, the Company provides
the  following discussion regarding three business segments:
Biomedical   devices,  which  includes  the  operations   of
Biocontrol   Technology,  Inc.  and   Diasensor.com,   Inc.;
Bioremediation, which includes the operations of Petrol Rem,
Inc.; and Marine Paint Products, including the operations of
Barnacle  Ban  Corporation, which  have  been  discontinued.
More complete financial information on these segments is set
forth in Note F to the accompanying financial statements.

Biomedical  Device Segment.  During the year ended  December
31,   1998,   sales  to  external  customers  increased   to
$1,028,484  from  $880,919  in  1997  and  $508,561.   These
increases  were  primarily due to  increased  sales  of  the
functional   electrical   stimulators,   which   have   been
discontinued.  Corresponding increases in costs of  products
goods  sold  occurred for the same reason, from $288,537  in
1996  to $445,843 in 1997, and $483,388 in 1998.
                              
Bioremediation Segment.  During the year ended December  31,
1998,  sales to external customers decreased to  $45,382  as
compared  to   $138,362 in 1997 and  $47,625  in  1996.  The
decrease  from  1997  to 1998 was due  to  an  inability  to
effectively  penetrate the market with products  other  than
the  Bio-Sok.   The increase from 1996 to 1997  was  due  to
increased  sales  of  the Bio-Sok to boating  suppliers  and
users through trade shows and marketing exposure.  Costs  of
products  sold  fluctuated due to  the  same  factors,  from
$16,092 in 1996 to $88,178 in 1997 and $33,061 in 1998.  The
relatively higher costs of products sold in 1997 were due to
the higher cost of producing the Bio-Sok as opposed to other
bioremediation products.

Marine  Paint Products Segment.  Sales to external customers
decreased  to  $40,835  in 1998 from $136,624  in  1997  and
$41,406  in  1996.  This decrease was due primarily  to  the
Company's decision to discontinue this segment's operations.
Costs of products sold reflect the same impact, with $32,777
in 1998, $107,310 in 1997 and $20,785 in 1996.

                         Income Taxes
                              
Due to the Company's net operating loss carried forward from
previous  years and its current year losses, no  federal  or
state  income taxes were required to be paid for  the  years
1987 through 1998.  As of December 31, 1998, the Company and
its  subsidiaries, except for Diasensor.com and Petrol  Rem,
had  available net operating loss carryforwards for  federal
income  tax  purposes  of approximately  $83,220,000,  which
expire during the years 1998 through 2019  (See, Note  K  to
the Financial Statements).

                       Year 2000 Issue

The Year 2000 Issue is the result of computer programs being
written  using two digits (rather than four) to  define  the
applicable year.  Programs which are susceptible to problems
after December 31, 1999 are those which would recognize  the
year  2000  as "00", creating confusion with the year  1900,
which  could  result in miscalculations or system  failures.
Based  upon a review of its internal programs and  software,
as  well as a survey of its outside suppliers, landlords and
vendors,  the Company currently believes that the Year  2000
will  not  pose  significant operational or  other  problems
because  such  systems and third parties are either  already
compliant or have undertaken to become compliant with  minor
adjustments.  It has not been necessary for the  Company  to
expend  any  material amounts in its effort to  address  the
Year  2000  issue.  The Company has determined that  minimal
contingency  plans may be necessary to assure the  avoidance
of   interruptions,  and are finalizing the  preparation  of
such  plans  on a departmental basis.  However, the  Company
can  make  no  assurances regarding  certain  global  system
operations, which are beyond the Company's control  such  as
utilities and banks.  As a result, there can be no assurance
that  Year  2000  issues  will  not  adversely  affect   the
Company's  systems  or  operations  (See,  Note  P  to   the
Financial Statements).

             Supplemental Financial Information

In   January  1999,  the  Company's  Form  S-1  Registration
Statement  was declared effective by the SEC.  Approximately
$4.3  million  has been raised pursuant to such registration
as of March 20, 1999.

Item 8.  Financial Statements and Supplementary Data

The  Company's  financial statements  appear  on  pages  F-1
through F-25 of this report.

Item  9.   Changes in and Disagreements with Accountants  on
Accounting and Financial Disclosure

Effective  January  25, 1995, upon a  determination  by  the
Board of Directors, the Company engaged Thompson Dugan, P.C.
as its independent auditors and accountants to replace Grant
Thornton  LLP.  Thompson Dugan, P.C.   also  serves  as  the
independent  auditors  and  accountants  for  Diasensor.com,
replacing  Grant  Thornton LLP.   Neither  company  had  any
disagreements  with  Grant Thornton LLP or  Thompson  Dugan,
P.C.  on  any matter of accounting principles or  practices,
financial   statement  disclosure  or  auditing   scope   or
procedure.

Item 10.  Directors and Executive Officers of the Registrant

The  directors and executive officers of the Company  as  of
December 31, 1998 were as follows:


                            Director
Nominee                   Age      Since     Position

David  L. Purdy           70       1972      President, Chairman of the
                                             Board, Treasurer, Director

Fred E. Cooper            52       1989      Chief Executive Officer,
                                             Executive Vice President, Director

Anthony J. Feola          50       1990      Senior Vice President, Director

Glenn  Keeling            47       1991      Vice President, Director

Stan Cottrell             55       1998      Director

Paul W. Stagg             51       1998      Director
_________________________________

DAVID  L.  PURDY, 70, is President, Chairman of  the  Board,
Treasurer and a director of the Company.  Mr. Purdy has been
a  director and Chairman of the Board since its organization
in  1972 and is considered the organizer and founder of  the
Company; he devotes 60% of his time to the business  of  the
Company, and 40% of his time to Diasensor.com.  Mr. Purdy is
also an officer and director of Diasensor.com and Coraflex.

FRED   E.  COOPER,  52,  is  the  Chief  Executive  Officer,
Executive  Vice President and a director of the Company;  he
devotes approximately 60% of his time to the business of the
Company,  and  40% to Diasensor.com.  Prior to  joining  the
Company,   Mr.   Cooper   co-founded   Equitable   Financial
Management,  Inc. of Pittsburgh, PA, a company in  which  he
served as Executive Vice President until his resignation and
divestiture of ownership in August 1990.    Mr.  Cooper  was
appointed  Chief Executive Officer in January  1990.  He  is
also an officer and director of Diasensor.com and a director
of Petrol Rem and Coraflex.

ANTHONY  J.  FEOLA, 50, rejoined the Company as  its  Senior
Vice   President   in   April,  1994,   after   serving   as
Diasensor.com's Vice President of Marketing and  Sales  from
January, 1992 until April, 1994. Prior to January, 1992,  he
was  the  Company's Vice President of Marketing  and  Sales.
Prior to joining the Company in November 1989, Mr. Feola was
Vice  President  and  Chief Operating Officer  with  Gateway
Broadcasting  in  Pittsburgh in  1989,  and  National  Sales
Manager  for  Westinghouse Corporation, also in  Pittsburgh,
from  1980  until  1989.  He was elected a director  of  the
Company  in February 1990, and also serves as a director  of
Diasensor.com, Coraflex, and Petrol Rem.

GLENN  KEELING, 47, joined the Board of Directors  in  April
1991.  Mr. Keeling currently is a full-time employee of BICO
in  the position of Vice President of Marketing; his primary
responsibilities  during 1994 through  1997  have  been  the
management  and operation of IDT's Whole-Body Extracorporeal
Hyperthermia project.  From 1976 through 1991, he was a Vice
President in charge of new business development at Equitable
Financial  Management,  Inc., a regional  equipment  lessor.
His  responsibilities included initial contacts  with  banks
and investment firms to open new lines of business referrals
in  connection  with financing large equipment transactions.
He is also President and a director of IDT.

STAN  COTTRELL, 55, was appointed to the Board of  Directors
in  1998.   Mr.  Cottrell  is the Chairman  and  Founder  of
Cottrell  Associates  International,  Inc.,  which  provides
international  business  development,  brokerage,  specialty
marketing and promotional services.  He is a former director
of   marketing  for  Inhalation  Therapy  Services  and  was
employed by Boehringer Ingelheim, Ltd. as a national product
manager.  Mr. Cottrell is a world ultra-distance runner  and
the author of several books.

PAUL  W.  STAGG, 51, was appointed to the Board of Directors
in  1998.   Mr.  Stagg  is  the marketing  manager  for  the
Wholesale Division of First Financial Resources, Inc., where
he  is responsible for marketing, underwriting, sorting  and
coordination  various types of financing  for  institutional
investors.   Prior to his current position, he was  District
Distributor  of  Marketing for Ginger  Mae,  a  division  of
United Companies of Baton Rouge, LA.

Pursuant  to  the disclosure requirements  of  Item  405  of
Regulation S-K regarding timely filings required by  Section
16(a)  of  the  Securities  and Exchange  Act,  the  Company
represents  the following.  Based solely on  its  review  of
copies  of  forms received and written representations  from
certain reporting persons, the Company believes that all  of
its   officers,  directors  and  greater  than  ten  percent
beneficial   owners   complied   with   applicable    filing
requirements.

Item 11.  Executive Compensation

The  following  table sets forth information concerning  the
annual  and  long-term  compensation  for  services  in  all
capacities  to  the  Company  for  the  fiscal  years  ended
December 31, 1998, 1997 and 1996, of those persons who were,
at  December  31, 1998 (i) the Chief Executive Officer,  and
(ii) the other most highly compensated executive officers of
the Company whose remuneration exceeded $100,000 (the "Named
Executives").

                         SUMMARY COMPENSATION TABLE
==============================================================================
             Annual Compensation                 | (1)Long Term  Compensation
------------------------------------------------------------------------------
                                                 |   Awards
Name and                                         | Securities
Principal                                (2)     | Underlying  (2) All other
Position      Year  Salary($) Bonus($) Other($)  | Warrants(#)  Compensation
==============================================================================
David L.                                         |
Purdy ,       1998  $166,802      $0        $0   |           0          $0
President,    1997  $241,667      $0        $0   |           0          $0
Treasurer (4) 1996  $400,000      $0        $0   |           0          $0
------------------------------------------------------------------------------
Fred E.       1998  $556,173      $0        $0   |           0          $0
Cooper,       1997  $592,000      $0        $0   |           0          $0
CEO (5)       1996  $592,000      $0        $0   |           0          $0
------------------------------------------------------------------------------
Anthony J.    1998  $326,912      $0        $0   |           0          $0
Feola , Sr.   1997  $300,000      $0        $0   |           0          $0
Vice Pres.(6) 1996  $300,000      $0        $0   |     350,000 (3)      $0
------------------------------------------------------------------------------
Glenn         1998  $180,003      $0        $0   |           0          $0
Keeling, VP   1997  $200,000      $0        $0   |           0          $0
(7)           1996  $200,000      $0        $0   |     100,000(8)       $0


(1)  The   Company  does  not  currently  have  a  Long-Term
     Incentive  Plan  ("LTIP"), and  no  payouts  were  made
     pursuant  to any LTIP during the years 1998,  1997,  or
     1996.   The Company did not award any restricted  stock
     to  the Named Executives during any year, including the
     years  1998, 1997 or 1996.   The Company did not  award
     any  warrants,  options  or Stock  Appreciation  Rights
     ("SARs") to the Named Executives during the years ended
     December  31, 1998, 1997 or 1996; however, the  Company
     did  extend  warrants  owned by the  Named  Executives,
     which  would  have  expired during 1996  (See  Note  3,
     below).   The  Company  has no retirement,  pension  or
     profit-sharing   programs  for  the  benefit   of   its
     directors, officers or other employees.

(2)  During  the  year  ended December 31, 1998,  the  Named
     Executives   received  medical   benefits   under   the
     Company's  group insurance policy, including disability
     and  life insurance benefits.  The aggregate amount  of
     all  perquisite compensation was less than 10%  of  the
     total  annual salary and bonus reported for each  Named
     Executive.

(3)  During  1996, the Company extended warrants  previously
     issued  to  the  Named  Executives,  which  would  have
     otherwise  expired.   Although the extensions  were  in
     connection  with  warrants already held  by  the  Named
     Executives, they are shown in the table set forth above
     as   "awards"  for  executive  compensation  disclosure
     purposes  because  at the time of  the  extension,  the
     exercise   price   of  the  warrants  (which   remained
     unchanged)  was  less than the "market  price"  of  the
     common stock

 (4) In November, 1994, Mr. Purdy's employment agreement was
     renegotiated  to  provide  for  an  annual  salary   of
     $250,000 effective November1, 1994 through October  31,
     1999.    All  other  terms  of  the  contract  remained
     substantially  the same (See, "Employment Agreements").
     During  1995,  Mr.  Purdy's  salary  was  increased  by
     $50,000.   In 1996, 1997 and 1998, Mr. Purdy  was  paid
     $87,500,  $100,000 and $100,000 by Diasensor.com;  such
     amounts are included in the table above.  Mr. Purdy  is
     paid  a  salary by the Company based on his  employment
     contract.   Amounts paid to Mr. Purdy by  Diasensor.com
     are  determined by the Diasensor.com Board of Directors
     based  upon  services performed on its behalf.   During
     1998, Mr. Purdy voluntarily reduced his salary by 69%.

(5)  In  November,  1994, Mr. Cooper's employment  agreement
     was  renegotiated  to provide for an annual  salary  of
     $250,000  effective November 1, 1994   through  October
     31,  1999.   All  other terms of the contract  remained
     substantially  the same (See, "Employment Agreements").
     In  addition,  in 1998, 1997 and 1996, Mr.  Cooper  was
     paid   $84,000,  $96,000, and $96,000, respectively  by
     both Petrol Rem and IDT, both of which are subsidiaries
     of BICO;  such amounts are included in the table above.
     In  1998, 1997, and 1996, Mr. Cooper was paid $177,542,
     $150,000,  and  $150,000  in salary  by  Diasensor.com,
     respectively;  such amounts are included in  the  table
     above.   Mr.  Cooper is paid a salary  by  the  company
     based on his employment agreement.  Amounts paid to Mr.
     Cooper  by  Diasensor.com,  Petrol  Rem  and  IDT   are
     determined  by  the  Boards  of  Directors   of   those
     companies  based  upon  services  performed  on   their
     behalf.

(6)  In  April, 1994, Mr. Feola's employment agreement  with
     Diasensor.com  was  assigned  to  BICO  when  he   left
     Diasensor.com  to  rejoin  BICO  as  its  Senior   Vice
     President.   In November, 1994, Mr. Feola's  employment
     agreement  was  renegotiated,  provides for  an  annual
     salary  of $200,000 and is effective November  1,  1994
     through  October  31, 1999.  All  other  terms  of  the
     contract   remained  substantially   the   same   (See,
     "Employment Agreements").  During 1998, 1997, and 1996,
     Mr.  Feola's  salary was increased by $27,000,  $50,000
     and $50,000 per year respectively.

(7)  In   November,  1994,  Mr.  Keeling  entered  into   an
     employment  agreement with the Company, which  provides
     for an annual salary of $150,000 effective November  1,
     1994   through  October  31,  1999  (See,   "Employment
     Agreements").   During  1996 and  1995,  Mr.  Keeling's
     salary was increased by $25,000 per year.

(8)  On August 26, 1996, Mr. Keeling was granted warrants to
     purchase  100,000 shares of the Company's common  stock
     at  a price of $1.48 per share (the market price as  of
     that date) until August 26, 2001.

        Option/Warrant/SAR Grants in Last Fiscal Year

No options, warrants or SARs were granted or extended to the
Named Executives during 1998.

 AGGREGATED OPTION/WARRANT/SAR EXERCISES IN LAST FISCAL YEAR
     AND FISCAL YEAR-END OPTION/WARRANT/SAR VALUE TABLE


                                            Number of         Value of
                                            Securities        Unexercised
                                            Underlying        In-the-Money
                                            Unexercised       Options/SARs
                                            Options/SARs      12/31/98 ($)
                                            at 12/31/98 (#)
           Shares           Value
           Acquired on      Realized ($)    Exercisable       Exercisable/
           Exercise           (2)           Unexercisable(3)  Unexercisable (4)
Name       (#)(1)
-------------------------------------------------------------------------------
David L.      0         $     0          767,200           $   0
Purdy                                     (5)                 (9)
-------------------------------------------------------------------------------
Fred E.       0         $     0          300,000           $   0
Cooper                                    (6)                 (9)
-------------------------------------------------------------------------------
Anthony J.    0         $     0          550,000           $   0
Feola                                     (7)                 (9)
-------------------------------------------------------------------------------
Glenn         0         $     0          100,000           $   0
Keeling                                   (8)                 (9)
__________________

(1)  This  figure represents the number of shares of  common
     stock acquired by each named executive officer upon the
     exercise of warrants.

(2)  The  value  realized  of  the  warrants  exercised  was
     computed  by determining the spread between the  market
     value  of  the  underlying securities at  the  time  of
     exercise minus the exercise price of the warrant.

(3)  All warrants held by the Named Executives are currently
     exercisable.

(4)  The  value  of  unexercised warrants  was  computed  by
     subtracting  the  exercise  price  of  the  outstanding
     warrants  from the closing sales price of the Company's
     common stock on December 31, 1998 as reported by Nasdaq
     ($.06).

(5)  Includes  warrants  to  purchase:   187,200  shares  of
     common  stock  at $.25 per share until April  24,  1995
     (extended  until  April 24, 1999);  500,000  shares  of
     common  stock  at  $.25 per share  until  May  1,  1995
     (extended  until  May 1, 1999); and  80,000  shares  of
     common  stock  at $.33 per share until  June  29,  1995
     (extended until June 29, 1999) (See, "Warrants").

(6)  Includes warrants to purchase: 300,000 shares of common
     stock  at  $.25  per share until May 1, 1995  (extended
     until May 1, 1999) (See, "Warrants").

(7)  Includes  warrants  to  purchase:   100,000  shares  of
     common  stock  at  $.25 per share  until  May  1,  1995
     (extended until May 1, 1999); 100,000 shares of  common
     stock  at  $.25  per  share  until  November  26,  1995
     (extended until November 26, 1999); and 350,000  shares
     of  common  stock at $.50 per share until  October  11,
     1996   (extended   until  October   11,   1999)   (See,
     "Warrants").

(8)  Includes warrants to purchase: 100,000 shares of common
     stock at $1.48 per share until August 26, 2001.

(9)  Because  the market price as of December 31,  1998  was
     less  than  the  exercise price of the  warrants,  such
     warrants were not in-the-money.


Employment Agreements

BICO   has   entered   into   employment   agreements   (the
"Agreements")  with  its Named Executives  Fred  E.  Cooper,
David L. Purdy, Anthony J. Feola and Glenn Keeling effective
November  1,  1994,  pursuant to which  they  are  currently
entitled  to receive annual salaries of $250,000,  $300,000,
$300,000  and $200,000  respectively, which are  subject  to
review  and  adjustment.  The initial term of the Agreements
with  Messrs. Cooper and Purdy expires on October 31,  1999,
and  continues  thereafter for additional  three-year  terms
unless any of the parties give proper notice of non-renewal.
The  initial term of the Agreements with Messrs.  Feola  and
Keeling   expires  on  October  31,  1999,   and   continues
thereafter  for additional two-year terms unless  either  of
the   parties  give  proper  notice  of  non-renewal.    The
Agreements  also provide that in the event of a  "change  of
control"  of  BICO, BICO is required to issue the  following
shares  of common stock, represented by a percentage of  the
outstanding   shares  of  common  stock   of   the   Company
immediately  after the change in control: five percent  (5%)
to   Mr.  Cooper  and Mr. Purdy; four percent  (4%)  to  Mr.
Feola; and three percent (3%) to Mr. Keeling.  In general, a
"change of control" is deemed to occur for purposes  of  the
Agreements (i) when 20% or more of BICO's outstanding voting
stock  is acquired by any person, (ii) when one-third  (1/3)
or more of BICO's directors are not Continuing Directors (as
defined  in  the  Agreement), or (iii)  when  a  controlling
influence  over  the  management  or  policies  of  BICO  is
exercised  by  any person or by persons acting  as  a  group
within  the  meaning  of  Section 13(d)  of  the  Securities
Exchange Act of 1934, as amended (the "Exchange Act").

In  addition, in the event of a change in control within the
term  of  the  Agreements  or within  one  year  thereafter,
Messrs.  Cooper,  Purdy, Feola and Keeling are  entitled  to
receive  severance  payments in amounts equal  to:  100%  of
their  most  recent annual salary for the first three  years
following  termination;  50% of  their  most  recent  annual
salary  for the next two years; and 25% of their most recent
salary  for  the next five years.  BICO is also required  to
continue  medical  insurance coverage  for  Messrs.  Cooper,
Purdy,  Feola  and  Keeling and their families  during  such
periods.   Such  severance payments will  terminate  in  the
event of the employee's death.

In  the  event  that either Mr. Purdy or Mr. Cooper  becomes
disabled,  as  defined  in  their  Agreements,  he  will  be
entitled to the following payments, in lieu of salary,  such
payments  to be reduced by any amount paid directly  to  him
pursuant  to a disability insurance policy provided  by  the
Company  or  its affiliates: 100% of his most recent  annual
salary for the first three years; and 70% of his most recent
salary for the next two years.  In the event that either Mr.
Feola  or Mr. Keeling becomes disabled, as defined in  their
Agreements,  he will be entitled to the following  payments,
in lieu of salary, such payments to be reduced by any amount
paid  directly  to  him  pursuant to a disability  insurance
policy  provided by the Company or its affiliates:  100%  of
his most recent annual salary for the first year; and 70% of
his most recent salary for the second year.

The  Agreements  also generally restrict the  disclosure  of
certain confidential information obtained by Messrs. Cooper,
Purdy,  Feola and Keeling during the term of the  Agreements
and restricts them from competing with BICO for a period  of
one  year  in  specified states following the expiration  or
termination of the Agreements.

In  addition  to the Employment Agreements described  above,
BICO also entered into employment agreements with two of its
non-executive officer employees effective November 1,  1994.
The  terms of such agreements are similar to those described
for  Messrs.  Feola  and Keeling above, with  the  following
amendments:   the term of one agreement is from November  1,
1994  through  October  31,  2002,  and  is  renewable   for
successive  two-year terms; the term of the other  agreement
is  from November 1, 1994 through October 31, 1999,  and  is
renewable for successive two-year terms;  in the event of  a
"change  in  control",  BICO  is  required  to  issue   both
employees  shares of common stock equal to two percent  (2%)
of the outstanding shares of the common stock of the Company
immediately after the change in control.

Item  12.   Security Ownership of Certain Beneficial  Owners
and Management

The following table sets forth the indicated information  as
of  December  31, 1998 with respect to each  person  who  is
known by the Company to be the beneficial owner of more than
five  percent  (5%)  of the outstanding common  stock,  each
director  of  the Company, and all directors  and  executive
officers  of  the  Company as a group.  The  table  excludes
disclosure  of  entities  such  as  Cede  &  Co.  and  other
companies, which would reflect the ownership of entities who
hold stock on behalf of shareholders.

As  of  December 31, 1998, there were 420,773,569 shares  of
the  Company's common stock outstanding.  The  first  column
sets  forth the common stock currently owned by each  person
or  group, excluding currently exercisable warrants for  the
purchase of common stock.  The second column sets forth  the
percentage  of  the total number of shares of  common  stock
outstanding as of December 31, 1998 owned by each person  or
group,  excluding  exercisable warrants.  The  third  column
sets  forth the total number of shares of common stock which
each named person or group has the right to acquire, through
the  exercise  of  warrants, within sixty  (60)  days,  plus
common stock currently owned.  The fourth column sets  forth
the percentage of the total number of shares of common stock
outstanding as of December 31, 1998 which would be owned  by
each  named person or group upon the exercise of all of  the
warrants  held by such person or group together with  common
stock  currently  owned, as set forth in the  third  column.
Except  as  otherwise indicated, each person  has  the  sole
power  to  vote and dispose of each of the shares listed  in
the columns opposite his name.

                      Amount and Nature                              Percent of
Name and Address of    of Beneficial   Percent of    Ownership with  Class with
Beneficial Owner       Ownership(1)     Class (2)     Warrants (3)   Warrants(4)


David L. Purdy (5)       400,140           *           1,167,340(6)      *
300 Indian Springs Road
Indiana, PA 15701

Fred E. Cooper           776,200           *           1,076,200(7)      *
Building 2500, 2nd Floor
2275 Swallow Hill Rd.
Pittsburgh, PA 15220

Anthony J. Feola         354,000           *             904,000(8)      *
Building 2500, 2nd Floor
2275 Swallow Hill Rd.
Pittsburgh, PA 15220

Glenn Keeling            138,500           *             238,500(9)      *
200 Julrich Drive
McMurray, PA 15317


All directors and      1,668,840           *           3,386,040(10)     *
executive officers
as a group (4 persons)

* Less than one percent
________________________
(1)  Excludes  currently exercisable warrants set  forth  in
     the third column and detailed in the footnotes below.

(2)  Represents  current common stock owned by each  person,
     as  set  forth in the first column, excluding currently
     exercisable  warrants,  as a percentage  of  the  total
     number  of  shares  of common stock outstanding  as  of
     December 31, 1998.

(3)  Includes ownership of all shares of common stock  which
     each  named  person or group has the right to  acquire,
     through  the  exercise of warrants, within  sixty  (60)
     days, together with the common stock currently owned.

(4)  Represents total number of shares of common stock owned
     by each person, as set forth in the third column, which
     each  named  person or group has the right to  acquire,
     through  the  exercise of warrants  within  sixty  (60)
     days, together with common stock currently owned, as  a
     percentage  of  the total number of  shares  of  common
     stock   outstanding  as  of  December  31,  1998.   For
     computation  purposes, the total number  of  shares  of
     common  stock outstanding as of December 31,  1998  has
     been increased by the number of additional shares which
     would  be outstanding if the person or group owned  the
     number of shares set forth in the third column.

(5)  Does  not  include  shares held by  Mr.  Purdy's  adult
     children.  Mr. Purdy disclaims any beneficial  interest
     to shares held by members of his family.

(6)  Includes currently exercisable warrants to purchase the
     following: 187,200 shares of common stock at  $.25  per
     share  until April 24, 1995 (extended until  April  24,
     1999); 80,000 shares of common stock at $.33 per  share
     until June 29, 1995 (extended until June 29, 1999); and
     500,000 shares of common stock at $.25 per share  until
     May  1,  1995 (extended until May 1, 1999) pursuant  to
     Mr.   Purdy's   previous  employment   agreement.    In
     addition,  Mr. Purdy is entitled to certain  shares  of
     Common  Stock  upon  a change of  control  of  BICO  as
     defined  in  his employment agreement (See, "Employment
     Agreements").

(7)  Includes currently exercisable warrants to purchase the
     following: 300,000 shares of common stock at  $.25  per
     share  until May 1, 1995 (extended until May  1,  1999)
     pursuant to Mr. Cooper's previous employment agreement.
     In  addition, Mr. Cooper is entitled to certain  shares
     of  Common  Stock upon a change of control of  BICO  as
     defined  in  his employment agreement (See, "Employment
     Agreements").

(8)  Includes currently exercisable warrants to purchase the
     following:   100,000 shares of common stock at $.25 per
     share  until November 26, 1995 (extended until November
     26,  1999); 100,000 shares of common stock at $.25  per
     share  until May 1, 1995 (extended until May  1,  1999)
     pursuant  to Mr. Feola's previous employment agreement;
     and  350,000 shares of common stock at $.50  per  share
     until  October  11,  1996 (extended until  October  11,
     1999).  In  addition, Mr. Feola is entitled to  certain
     shares of Common Stock upon a change of control of BICO
     as   defined   in   his  employment   agreement   (See,
     "Employment Agreements").

(9)  Includes  currently  exercisable warrants  to  purchase
     100,000 shares of common stock at $1.48 per share until
     August  26, 2001.  In addition, Mr. Keeling is entitled
     to  certain  shares of Common Stock upon  a  change  of
     control  of BICO as defined in his employment agreement
     (See, "Employment Agreements").

(10) Includes  shares  of  common  stock,  including   stock
     currently  owned, available under currently exercisable
     warrants as set forth above.


Item 13.  Certain Relationships and Related Transactions

The  Company  and its affiliates share common  officers  and
directors.  In addition, BICO and Diasensor.com have entered
into  several intercompany agreements including  a  Purchase
Agreement,  a  Research  and  Development  Agreement  and  a
Manufacturing   Agreement,  which  are  summarized   herein.
Management believes that it was in the best interest of  the
Company   to  enter  into  such  agreements  and  that   the
transactions  were based upon terms as fair as  those  which
may  have  been  available in comparable  transactions  with
third  parties.   However, no unaffiliated third  party  was
retained  to  determine independently the fairness  of  such
transactions.  The Company's policy concerning related party
transactions  requires the approval of  a  majority  of  the
disinterested  directors of both the corporations  involved,
if applicable.

Employment Relationships

The  Board  of Directors of the Company approved  employment
agreements  on November 1, 1994 for its officers,  David  L.
Purdy,  Fred  E. Cooper, Anthony J. Feola and Glenn  Keeling
(See "Employment Agreements").

David  L. Purdy, President, Treasurer and a director of  the
Company,  is a director of Diasensor.com and  Coraflex.   He
is  also  the chairman and Chief Scientist of Diasensor.com,
and  the  President  and Treasurer of Coraflex.   Mr.  Purdy
devotes  60%  of his time to BICO, and 40% to Diasensor.com.
Fred  E.  Cooper,  Chief Executive Officer,  Executive  Vice
President  and a director of the Company, is a  director  of
Diasensor.com,  Coraflex and  Petrol Rem.  He  is  also  the
President    of    Diasensor.com.    Mr.   Cooper    devotes
approximately  60%  of  his  time  to  BICO   and   40%   to
Diasensor.com.    Anthony J. Feola,  Senior  Vice  President
and  a  director  of  the Company, is  also  a  director  of
Diasensor.com,  Coraflex, and Petrol Rem.    Glenn  Keeling,
Vice  President and a director of the Company, was  employed
on January 1, 1992 as BICO's manager of product development.
Mr. Keeling is also the President and a director of IDT.

Property

Three  of  the  Company's current executive officers  and/or
directors  and  two  former directors  of  the  Company  are
members  of  the  nine-member 300 Indian Springs  Road  Real
Estate  Partnership (the "Partnership") which in July  1990,
purchased   the   Company's   real   estate   in    Indiana,
Pennsylvania, and each has personally guaranteed the payment
of  lease  obligations  to the bank providing  the  funding.
The five members of the Partnership who are also current  or
former  officers and/or directors of the Company,  David  L.
Purdy, Fred E. Cooper, Glenn Keeling, Jack H. Onorato and C.
Terry  Adkins, each received warrants on June  29,  1990  to
purchase 100,000 shares of the Company's common stock at  an
exercise  price of $.33 per share until June 29, 1995.   Mr.
Adkins,  who  was a director at the time of the transaction,
resigned from the Board of Directors on March 30, 1992.  Mr.
Keeling,  who  was  not  a  director  at  the  time  of  the
transaction, joined the Board of Directors on May  3,  1991.
Mr.  Onorato,  who was not a director at  the  time  of  the
transaction, was a BICO director from September  1992  until
April 1994.

In  all  instances where warrants were issued in  connection
with the transactions set forth above, the exercise price of
the warrants was equal to or above the current quoted market
price of the Company's common stock on the date of issuance.

In April 1992, Diasensor.com purchased an office condominium
located  at the Bourse Office Park, Virginia Manor, Building
2500,  Second  Floor,  Pittsburgh,  Pennsylvania  15220  for
$190,000.   The  Company  has  entered  into  a  lease  with
Diasensor.com  and  pays rent in the amount  of  $3,544  per
month, plus one-half of the utilities.

Warrants

The  following  paragraphs, along  with  the  notes  to  the
financial  statements, include disclosure  of  the  warrants
which  were  granted to executive officers and directors  of
the  Company  from 1996 through 1998.  These  warrants  were
accounted for in accordance with Accounting Principles Board
Opinion  25  (based  on  the spread,  if  any,  between  the
exercise  price and the quoted market price of the stock  on
the  date  that the warrants were granted).   No  value  was
recorded  for these warrants since they were all granted  at
exercise  prices  which were equal to or above  the  current
quoted  market price of the stock on the date  issued  (See,
Note J to the Financial Statements).  In 1995 and 1996,  the
Company  extended warrants granted in 1990 and  1991,  which
were  scheduled to expire in 1995 and 1996, until 1998-2000.
Because  the exercise price of the warrants, which  remained
unchanged,  was  less than the market price  of  the  common
stock  on  the  dates of the extensions, charges  were  made
against   operations  (See,  "MANAGEMENT'S  DISCUSSION   AND
ANALYSIS  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS",
and Note J to the Financial Statements).

On  August  26,  1996, the Board of Directors  approved  the
granting  of warrants to purchase 100,000 shares  of  common
stock  at  $1.48 per share to Glenn Keeling, an officer  and
director of the Company.

Loans

On  October  1,  1990,  the Board of  Directors  approved  a
$75,000 loan from the Company to Fred E. Cooper.  Mr. Cooper
signed  a  promissory note promising to  pay  the  principal
amount  plus  twelve  percent (12%)  simple  interest.   Mr.
Cooper  repaid  $66,500  of  the $75,000  principal  balance
during  1991.    During 1991, the Company granted  loans  to
Fred  E.  Cooper  in the aggregate amount of  $57,400.   Mr.
Cooper   signed  promissory  notes  promising  to  pay   the
principal amounts upon demand plus ten percent (10%)  simple
interest.   In January 1992, the Company granted a  loan  to
Fred  E. Cooper in the amount of $25,000.  Mr. Cooper signed
a promissory note promising to pay the principal amount upon
demand plus ten percent (10%) simple interest.  In 1997, the
Companies  granted  loans  to  Fred  E.  Cooper  aggregating
$158,000;  Mr. Cooper signed  promissory notes promising  to
pay  the  principal amounts upon demand plus   8.25%  simple
interest.   In 1998, the Company granted loans  to  Fred  E.
Cooper  aggregating $275,000; Mr. Cooper signed a promissory
note  promising to pay the principal amount upon demand plus
8.25%  simple interest.  The aggregate balance of the  loans
as  of  December 31, 1998, including accrued  interest,  was
$633,499.

In November 1997, the Companies granted a loan to Anthony J.
Feola  in  the  amount  of  $50,000.   Mr.  Feola  signed  a
promissory  note promising to pay the principal amount  upon
demand  plus 8.25% simple interest.  In February  1998,  the
Company granted a loan to Anthony J. Feola in the amount  of
$185,000.   Mr. Feola signed a promissory note promising  to
pay  the  principal upon demand plus 8.25% simple  interest.
The  aggregate balance of the loans as of December 31, 1998,
including accrued interest, was $253,219.

In  December  1991,  the Company granted  a  loan  to  Glenn
Keeling  in  the  amount of $5,000.  Mr.  Keeling  signed  a
Promissory  Note promising to pay the principal amount  upon
demand  plus ten percent (10%) simple interest.  In December
1996,  the  Company granted a loan to Glenn Keeling  in  the
amount  of  $50,000.  Mr. Keeling signed a  promissory  note
promising  to  pay  the principal amounts upon  demand  plus
8.25%  simple  interest.   In November,  1997,  the  Company
granted  a  loan to Glenn Keeling in the amount of  $20,000.
Mr.  Keeling signed a promissory note promising to  pay  the
principal  upon  demand  plus  8.25%  simple  interest.   In
February  1998, the Company granted a loan to Glenn  Keeling
in  the amount of $190,000.  Mr. Keeling signed a promissory
note  promising to pay the principal upon demand plus  8.25%
simple interest.  The aggregate balance of the loans  as  of
December 31, 1998, including accrued interest, was $292,810.

In  September 1995, the Company granted a loan in the amount
of $250,000 to Allegheny Food Services  in the form of a one-
year  renewable  note  bearing interest  at  prime  rate  as
reported  by the Wall Street Journal plus one percent  (1%).
Interest and principal payments have been made on the  note,
and  as  of  December  31, 1998, the balance  was  $200,000.
Joseph  Kondisko, a former director of Diasensor.com,  is  a
principal owner of Allegheny Food Services.

Each  of  the loans made to officers or directors and  their
affiliates  was made for a bona fide business purpose.   All
future  loans  to  officers, directors and their  affiliates
will be made for bona fide business purposes only.

Intercompany Agreements

Management  of  the  Company believes  that  the  agreements
between BICO and Diasensor.com, which are summarized  below,
were  based  upon  terms, which were as favorable  as  those
which  may  have  been available in comparable  transactions
with third parties.  However no unaffiliated third party was
retained  to  determine independently the fairness  of  such
transactions.

License and Marketing Agreement.  Diasensor.com acquired the
exclusive  marketing  rights  for  the  Noninvasive  Glucose
Sensor and related products and services from BICO in August
1989  in exchange for 8,000,000 shares of its common  stock.
That  agreement  was  canceled pursuant  to  a  Cancellation
Agreement  dated  November 18, 1991,  and  superseded  by  a
Purchase   Agreement   dated   November   18,   1991.    The
Cancellation  Agreement provides that BICO will  retain  the
8,000,000  shares of Diasensor.com common stock  which  BICO
received pursuant to the License and Marketing Agreement.

Purchase Agreement.  BICO and Diasensor.com entered  into  a
Purchase  Agreement  dated November 18,  1991  whereby  BICO
conveyed  to  Diasensor.com  its  entire  right,  title  and
interest   in  the  Noninvasive  Glucose  Sensor   and   its
development,  including its extensive knowledge,  technology
and   proprietary  information.   Such  conveyance  includes
BICO's  patent  received in December 1991  (See,  Report  to
Shareholders - "Business").

In  consideration of the conveyance of its entire  right  in
the  Noninvasive  Glucose Sensor and its  development,  BICO
received   $2,000,000.   In  addition,   Diasensor.com   may
endeavor,  at  its own expense, to obtain patents  on  other
inventions  relating  to  the  Noninvasive  Glucose  Sensor.
Diasensor.com  also guaranteed BICO the right  to  use  such
patented  technology in the development of  BICO's  proposed
implantable  closed-loop system, a  related  system  in  the
early stages of development.

In   December  1992,  BICO  and  Diasensor.com  executed  an
amendment to the Purchase Agreement which clarified terms of
the Purchase Agreement.  The amendment defines "Sensors"  to
include  all  devices  for  the  noninvasive  detection   of
analytes  in  mammals or in other biological materials.   In
addition, the amendment provides for a royalty to be paid to
Diasensor.com in connection with any sales by  BICO  of  its
proposed closed-loop system.

Research  and  Development ("R&D") Agreement.  Diasensor.com
and BICO entered into an agreement dated January 20, 1992 in
connection  with  the  research  and  development   of   the
Noninvasive Glucose Sensor.  Pursuant to the agreement, BICO
will  continue  the  development of the Noninvasive  Glucose
Sensor,   including  the  fabrication  of  prototypes,   the
performance  of clinical trials, and the submission  to  the
FDA  of all necessary applications in order to obtain market
approval for the Noninvasive Glucose Sensor.  BICO will also
manufacture the models of the Noninvasive Glucose Sensor  to
be  delivered to Diasensor.com for sale (See, "Manufacturing
Agreement").  Upon the delivery of the completed models, the
research  and  development phase of the Noninvasive  Glucose
Sensor will be deemed complete.

Diasensor.com has agreed to pay BICO $100,000 per month  for
indirect costs beginning April 1, 1992, during the  15  year
term  of  the  agreement, plus all direct  costs,  including
labor.  BICO also received a first right of refusal for  any
program  undertaken  to  develop,  refine  or  improve   the
Noninvasive Glucose Sensor, and for the development of other
related  products.   In  July 1995, BICO  and  Diasensor.com
agreed  to  suspend billings, accruals of  amounts  due  and
payments  pursuant  to the R&D Agreement pending  the  FDA's
review of the 510(k) Notification.

Manufacturing  Agreement.   BICO and  Diasensor.com  entered
into  an agreement dated January 20, 1992, whereby BICO will
act as the exclusive manufacturer of the Noninvasive Glucose
Sensor  and  other  related  products.   Diasensor.com  will
provide BICO with purchase orders for the products and  will
endeavor to provide projections of future quantities needed.
The original Manufacturing Agreement called for the products
to  be manufactured and sold at a price to be determined  in
accordance  with  the  following  formula:  Cost  of   Goods
(including actual or 275% of overhead, whichever  is  lower)
plus  a  fee  of  30% of Cost of Goods.  In July  1994,  the
formula  was amended to be as follows: Costs of  Goods  Sold
(defined  as BICO's aggregate cost of materials,  labor  and
associated  manufacturing overhead) + a  fee  equal  to  one
third (1/3) of the difference between the Cost of Goods Sold
and    Diasensor.com's   sales   price   of   each   Sensor.
Diasensor.com's sales price of each Sensor is defined as the
price  paid  by any purchaser, whether retail or  wholesale,
directly  to  Diasensor.com for  each  Sensor.   Subject  to
certain  restrictions,  BICO may  assign  its  manufacturing
rights  to  a  subcontractor  with  Diasensor.com's  written
approval.  The term of the agreement is fifteen years.

Item  14.   Exhibits,  Financial  Statement  Schedules,  and
Reports on Form 8-K

(a)  1.   Financial Statements

The  financial statements, together with the report  thereon
of  the  Company's independent accountants, are included  in
this report on the pages listed below.

     Financial Statements                                       Page

     Report of Independent Certified Public Accountants
     Thompson Dugan, P.C.                                        F-1

     Consolidated Balance Sheets
     December 31, 1998 and 1997                                  F-2

     Consolidated Statements of Operations
     for the years ended December 31, 1998, 1997 and 1996        F-4

     Consolidated Statements of  Stockholders' Equity
     for the years ended December 31, 1998, 1997, 1996
     and 1995                                                    F-5

     Consolidated Statements of Cash Flows
     for the years ended December 31, 1998, 1997 and 1996        F-6

     Notes to Consolidated Financial Statements
     December 31, 1998, 1997 and 1996                            F-8


2.   Exhibits:

(b)  Reports on Form 8-K

     The  Company  filed a Form 8-K report  dated  April  8,
     1998.   The items listed were Item 5, Other Events; and
     Item 7(c), Exhibits.

     The  Company  filed a Form 8-K report dated  April  20,
     1998.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company filed a Form 8-K report dated May 6, 1998.
     The  items listed were Item 5, Other Events;  and  Item
     7(c), Exhibits.

     The  Company filed a Form 8-K report dated May 8, 1998.
     The  items listed were Item 5, Other Events;  and  Item
     7(c), Exhibits.

     The  Company filed a Form 8-K report dated May 12,1998.
     The  items listed were Item 5, Other Events;  and  Item
     7(c), Exhibits.

     The Company filed a Form 8-K report dated May 28, 1998.
     The  items listed were Item 5, Other Events;  and  Item
     7(c), Exhibits.

     The Company filed a Form 8-K report dated June 9, 1998.
     The  items listed were Item 5, Other Events;  and  Item
     7(c), Exhibits.

     The  Company  filed a Form 8-K report  dated  June  22,
     1998.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company  filed a Form 8-K report  dated  July  14,
     1998.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company  filed a Form 8-K report  dated  July  16,
     1998.  The items listed were Item 5, Other Events,  and
     Item 7(c), Exhibits.

     The  Company  filed a Form 8-K report dated  August  4,
     1998.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company  filed a Form 8-K report dated  August  7,
     1998.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The Company filed a Form 8-K report dated September  9,
     1998.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company filed a Form 8-K report dated  October  5,
     1998.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company filed a Form 8-K report dated  October  9,
     1998.  The item listed was Item 5, Other Events.

     The  Company filed a Form 8-K report dated October  21,
     1998.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company filed a Form 8-K report dated October  22,
     1998.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company filed a Form 8-K report dated November 24,
     1998.  The item listed was Item 5, Other Events.

     The  Company filed a Form 8-K report dated  January  1,
     1999.   The  item listed was Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company filed a Form 8-K report dated January  29,
     1999.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company filed a Form 8-K report dated February 16,
     1999.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     The  Company  filed a Form 8-K report  dated  March  1,
     1999.  The items listed were Item 5, Other Events;  and
     Item 7(c), Exhibits.

     (c)  Exhibits Required by Item 601 of Regulation S-K

          The  following exhibits required by  Item  601  of
          Regulation  S-K are filed as part of this  report.
          Except  as  otherwise  noted,  all  exhibits   are
          incorporated  by reference from exhibits  to  Form
          S-1  (Registration  #33-55200) filed  December  1,
          1992  or from exhibits to Form 10-K filings  prior
          to or subsequent to that date.

3.1       Articles of Incorporation as filed March 20, 1972

3.2       Amendment to Articles filed May 8, 1972

3.3       Restated Articles filed June 19, 1975

3.4       Amendment to Articles filed February 4, 1980

3.5       Amendment to Articles filed March 17, 1981

3.6       Amendment to Articles filed January 27, 1982

3.7       Amendment to Articles filed November 22, 1982

3.8       Amendment to Articles filed October 30, 1985

3.9       Amendment to Articles filed October 30, 1986

3.10      By-Laws

3.11(1)   Amendment to Articles filed December 28, 1992

4.1       Incentive Stock Option Plan and Schedule

4.2       Form of Warrant and Schedule

5.1(2)    Legal Opinion of Sweeney & Associates P.C.

16.1(3)   Disclosure and Letter Regarding Change in
          Certifying Accountants dated January 25, 1995
____________________________

(1)  Incorporated   by  reference  to  First  Amendment   to
     Registration   Statement  on  Form  S-1   (Registration
     #33-55200) filed February 8, 1993

(2)  Incorporated by reference from Exhibit with this  title
     to Form S-1 and Prospectus dated August 16, 1993

(3)  Incorporated by reference from Report on Form 8-K dated
      November 1, 1995

Conformed Copy
                         SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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, on the 29th  day  of
March, 1999.

                        BIOCONTROL TECHNOLOGY, INC.



                                         By:   /s/ David L. Purdy

                                                   David L. Purdy
                                                   President,Treasurer,Director

     Pursuant to the requirements of the Securities Exchange
Act  of  1934,  this  report has been signed  below  by  the
following  persons on behalf of the Registrant  and  in  the
capacities and on the dates indicated.

     Signature                   Title                         Date


/s/ Fred E. Cooper            Director, CEO,                March 29, 1999
Fred E. Cooper                (principal executive
                              officer, principal
                              financial officer and
                              principal accounting
                              officer)


/s/ Anthony J. Feola          Senior Vice President,        March 29, 1999
Anthony J. Feola              Director


/s/ Glenn Keeling             Director                      March 29, 1999
Glenn Keeling


/s/ Stan Cottrell             Director                      March 29, 1999
Stan Cottrell

/s/ Paul W. Stagg             Director                      March 29, 1999
Paul W. Stagg


                          THOMPSON DUGAN
                    CERTIFIED PUBLIC ACCOUNTANTS
                      ________________________

                         Pinebridge Commons
                       1580 McLaughlin Run Rd.
                        Pittsburgh, PA 15241


         Report of Independent Certified Public Accountants


Board of Directors
Biocontrol Technology, Inc.

      We have audited the accompanying consolidated balance sheets of
Biocontrol  Technology, Inc. and its subsidiaries as of December  31,
1998 and 1997, and the related consolidated statements of operations,
changes in stockholders' equity (deficiency) and cash flows for  each
of  the  three  years in the period ended December 31,  1998.   These
financial  statements  are the responsibility  of  the  Corporation's
management.   Our  responsibility is to express an opinion  on  these
financial statements based on our audits.

      We  conducted our audits in accordance with generally  accepted
auditing standards.  Those standards require that we plan and perform
the  audit to obtain reasonable assurance about whether the financial
statements  are  free of material misstatement.   An  audit  includes
examining,  on  a  test basis, evidence supporting  the  amounts  and
disclosures  in  the  financial statements.  An audit  also  includes
assessing  the  accounting principles used and significant  estimates
made  by  management,  as well as evaluating  the  overall  financial
statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

      In  our opinion, such consolidated financial statements present
fairly, in all material respects, the consolidated financial position
of  Biocontrol Technology, Inc. and its subsidiaries as  of  December
31,  1998  and 1997, and the consolidated results of their operations
and  their cash flows for each of the three years in the period ended
December  31,  1998 in conformity with generally accepted  accounting
principles.

       The  accompanying  financial  statements  have  been  prepared
assuming  that the Corporation will continue as a going concern.   As
discussed in Note B to the financial statements, the Corporation  has
incurred  losses  and negative cash flows from operations  in  recent
years through December 31, 1998 and these conditions are expected  to
continue   through  1999,  raising  substantial   doubt   about   the
Corporation's  ability to continue as a going concern.   Management's
plans in regard to these matters are also discussed in Note B.  These
financial statements do not include any adjustments that might result
from the outcome of this uncertainty.


Pittsburgh, Pennsylvania
March 25, 1999


<PAGE> F-1
<TABLE>
                              Biocontrol Technology, Inc. and Subsidiaries
                                       Consolidated Balance Sheets
<CAPTION>

                                                            Dec. 31, 1998    Dec. 31, 1997
                                                            -------------    -------------
<S>                                                        <C>              <C>
CURRENT ASSETS
 Cash and equivalents (note A)                              $    125,745     $ 2,759,067
 Accounts receivable - net of allowance for doubtful accounts
   of $27,059 at Dec. 31, 1998 and $14,931 at Dec. 31, 1997       55,959         383,747
 Inventory - net of valuation allowance (notes A and D)           74,515       1,834,018
 Notes receivable - related parties (notes C and L)                    0          35,000
 Notes  receivable (note C)                                            0          87,000
 Interest receivable (note C)                                          0           2,134
 Prepaid expenses                                                170,544         137,862
 Advances - Officers                                                   0          34,732
                                                            -------------    -------------

                 TOTAL CURRENT ASSETS                            426,763       5,273,560


PROPERTY, PLANT AND EQUIPMENT (notes A and H)
 Building                                                     1,429,906        1,444,273
 Land                                                           133,750          246,250
 Construction in progress                                             0        1,465,152
 Leasehold improvements                                       1,477,573        1,197,977
 Machinery and equipment                                      5,014,103        5,042,736
 Furniture, fixtures & equipment                                794,740          812,221
                                                            -------------    -------------
  Subtotal                                                    8,850,072        10,208,609

 Less accumulated depreciation                                4,244,650         3,516,677
                                                            -------------    -------------
                                                              4,605,422         6,691,932

OTHER ASSETS
 Related Party Receivables
  Notes receivable - (notes C and L)                          1,223,900           623,900
  Interest receivable - (notes C and L)                         155,628            75,343
  Advances-Officers                                              90,779                 0
                                                           -------------    -------------
                                                              1,470,307           699,243
  Allowance for related party receivables                    (1,270,307)                0
                                                           -------------     ------------
                                                                200,000           699,243

 Notes receivable - (notes C)                                   142,493                 0
 Interest receivable                                             19,778                 0
 Goodwill, net of amortization - (note A)                     4,423,421                 0
 Deposit on equipment                                                 0           300,000
 Patents, net of amortization (note A)                            2,433             6,765
 Other assets                                                    15,259             9,800
                                                            -------------    -------------
                                                              4,803,384         1,015,808
                                                            -------------    -------------
         TOTAL ASSETS                                      $  9,835,569     $  12,981,300
                                                            =============    =============

The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>  F-2
<TABLE>
                                    Biocontrol Technology, Inc. and Subsidiaries
                                            Consolidated Balance Sheets
                                                    (Continued)
<CAPTION>

                                                                    Dec. 31,1998    Dec. 31, 1997
                                                                    -------------    -------------
<S>                                                                 <C>              <C>
CURRENT LIABILITIES
  Accounts payable                                                   $  1,750,188      $   646,535
  Current portion of long-term debt (note G)                            4,552,178           18,765
  Current portion of capital lease obligations (note H)                    99,061          109,933
  Debentures payable (note I)                                           2,825,000        3,301,280
  Accrued liabilities (note E)                                          1,096,644          215,119
  Escrow payable (note J)                                                   2,700            2,700
  Deferred revenue on contract billings (note A)                                0          116,146
                                                                    -------------   -------------
        TOTAL CURRENT LIABILITIES                                      10,325,771        4,410,478

LONG-TERM LIABILITIES
  Capital lease obligations (note H)                                    1,412,880        2,688,293
  Long-term debt (note G)                                                       0            8,806
                                                                    -------------   -------------
                                                                        1,412,880        2,697,099


COMMITMENTS AND CONTIGENCIES (notes M)

UNRELATED INVESTORS'INTEREST
   IN SUBSIDIARY (note A)                                                  24,162        1,409,647

STOCKHOLDERS' EQUITY (notes J and O)

   Common stock, par value $.10 per share,
   authorized 600,000,000 shares, issued and
   outstanding 420,773,568 at Dec. 31, 1998 and
   138,583,978 at Dec. 31, 1997                                        42,077,357       13,858,398
   Additional paid-in capital                                          92,725,285      104,932,920
   Notes receivable issued for common stock-related party (note L)        (25,000)         (25,000)
   Warrants                                                             6,396,994        6,396,994
   Accumulated deficit                                               (143,101,880)    (120,699,236)
                                                                    -------------    -------------
          TOTAL STOCKHOLDERS' EQUITY                                   (1,927,244)       4,464,076
                                                                    --------------   --------------
          TOTAL LIABILITIES AND
            STOCKHOLDER' EQUITY                                        $9,835,569      $12,981,300
                                                                    =============    =============

The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE> F-3
<TABLE>
                                 BIOCONTROL  TECHNOLOGY,  INC.  AND  SUBSIDIARIES
                                       CONSOLIDATED  STATEMENTS  OF  OPERATIONS

<CAPTION>

                                                             Year Ended December 31,
                                                    1998              1997              1996
                                                -------------    -------------    -------------
<S>                                             <C>               <C>             <C>
Revenues
  Net Sales                                      $1,145,968        $ 1,155,907    $     597,592
  Interest income                                   182,033            165,977          176,478
  Other income                                       50,212            104,250            2,657
                                                -------------    -------------    -------------
                                                  1,378,213          1,426,134          776,727

Costs and expenses
  Cost of products sold                               587,821         641,331          325,414
  Research and development (notes A and L)          6,340,676       6,977,590        8,742,922
  General and administrative                       11,560,345      12,695,628        8,963,693
  Loss on disposal of assets                          531,066           8,518             -
  Debt issue costs (note A)                         1,865,682       3,306,812          502,000
  Warrant extensions (note J)                            -               -             604,342
  Warrant extensions - Subsidiary (note J)               -          4,046,875        8,571,033
  Interest expense                                    481,025         315,624          133,460
  Beneficial convertible debt feature (note P)      3,799,727       6,278,853        1,650,000
                                                -------------    -------------    -------------
                                                   25,166,342       34,271,231       29,492,864
                                                -------------    -------------    -------------

Loss before unrelated investors' interest         (23,788,129)     (32,845,097)     (28,716,137)

Unrelated investors' interest in net loss of
  subsidiary                                        1,385,485        2,411,920        4,670,435
                                                -------------    -------------    -------------

  Net loss (note P)                             $(22,402,644)    $ (30,433,177)   $ (24,045,702)
                                                =============    =============    ==============

  Loss per common share (notes A and P)               ($0.08)           ($0.43)          ($0.57)
                                                =============    ==============   ==============

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> F-4
<TABLE>

                  Biocontrol Technology, Inc. and Subsidiaries

                Consolidated Statements of Stockholders' Equity

<CAPTION>

								                Note rec.
                              Preferred Stock      Common Stock                  issued for  Additional
                              ---------------    ----------------                Common Stk   Paid in      Accumulated
                              Shares   Amount    Shares      Amount   Warrants    Rel Party   Capital        Deficit        Total
                              ------- --------  ---------  ---------- ----------  --------- -----------  -------------- -----------
<S>                            <C>     <C>     <C>         <C>        <C>        <C>       <C>            <C>            <C>
Balance at December 31, 1995    3,790   37,900  37,021,118   3,702,112  6,677,820         -   59,849,875   (66,220,357)   4,047,350
                             --------  -------  ----------  ---------- ---------- ---------   ----------  ------------  -----------
Proceeds from stock offering        -        -   7,839,065     783,907          -         -   12,571,822             -   13,355,729
Conversion of preferred stk.  (22,730)(227,300)  1,958,602     195,860          -         -       31,440             -            -
Cash redemp. at par-pref stk.  (1,060) (10,600)          -           -          -         -            -             -      (10,600)
Proceeds from sale of
  preferred stk.- series A     20,000  200,000           -           -          -         -    1,640,000             -    1,840,000
Conversion of debenture             -        -   2,275,005     227,500          -         -    1,799,623             -    2,027,123
Warrant extensions                  -        -           -           -    604,342         -            -             -      604,342
Warrant extensions - sub.           -        -           -           -          -         -    4,441,262             -    4,441,262
Change in ownership int.-sub.       -        -           -           -          -         -      (22,873)            -      (22,873)
Warrants exercised                  -        -     120,000      12,000   (375,000)        -      393,600             -       30,600
Issuance of convertible
 debt (note P)                      -        -           -           -          -         -    1,650,000             -    1,650,000
  Net loss (note P)                 -        -           -           -          -         -            -   (24,045,702) (24,045,702)
                             -------- -------- -----------  ---------- ----------  -------- ------------ --------------  ----------
Balance at Dec. 31, 1996            -        -  49,213,790   4,921,379  6,907,162         -   82,354,749   (90,266,059)   3,917,231
                             -------- -------- -----------  ---------- ----------  -------- ------------  ------------   ----------
Proceeds from stk offering          -        -   1,705,000     170,500          -         -      765,648             -      936,148
Conversion of preferred stk.  (22,000)(220,000)  6,913,366     691,337          -         -     (471,337)            -            -
Proceeds from sale of
  preferred stk.-Series B      22,000  220,000           -           -          -         -    1,807,000             -    2,027,000
Conversion of debenture             -        -  80,599,022   8,059,902          -         -   11,554,077             -   19,613,979
Warrant extensions - sub.           -        -           -           -          -         -    2,108,421             -    2,108,421
Change in ownership int-sub.        -        -           -           -          -         -        2,421             -        2,421
Warrants exercised                  -        -     152,800      15,280   (510,168)  (25,000)     533,088             -       13,200
Issuance of convertible
 debt (note P)                      -        -           -           -          -         -    6,278,853             -    6,278,853
  Net loss (note P)                 -        -           -           -          -         -            -   (30,433,177) (30,433,177)
                             --------  -------  ----------  ----------  ---------   -------    ---------    -----------  -----------
Balance at Dec. 31, 1997            -        - 138,583,978  13,858,398  6,396,994   (25,000) 104,932,920  (120,699,236)   4,464,076
                             --------  -------  ----------  ----------   --------   -------    ----------    ------------ ----------
Proceeds from stock offering        -        -   2,055,000     205,500          -         -       22,423             -      227,923
Conversion of debenture             -        - 280,134,590  28,013,459          -         -  (16,029,785)            -   11,983,674
Issuance of convertible debt        -        -           -           -          -         -    3,799,727             -    3,799,727
  Net Loss                          -        -           -           -          -         -            -   (22,402,644) (22,402,644)
                             --------  -------  ----------  ---------- ----------  ---------  ----------  ------------ ------------
                             -------- -------- -----------  ---------- ----------- --------- ----------- -------------   ----------
Balance at Dec. 31, 1998            - $      - 420,773,568 $42,077,357 $6,396,994  ($25,000) $92,725,285 ($143,101,880) ($1,927,244)
                             ======== ======== =========== =========== =========== ========= =========== ==============  ===========



The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> F-5
<TABLE>



                                    Biocontrol Technology, Inc. and Subsidiaries
                                        Consolidated Statements of Cash Flows
<CAPTION>

                                                                                  Year ended December 31,

                                                                         1998           1997           1996
                                                                     -------------  -------------  -------------
<S>                                                                   <C>            <C>            <C>
Cash flows used by operating activities:
  Net loss                                                           ($22,402,644)  ($30,433,177)  ($24,045,702)
   Adjustments to reconcile net loss to net
    cash used by operating activities:
    Depreciation and amortization                                       1,706,537        850,802        587,507
    Loss of disposal of assets                                            531,066           -              -
    Unrelated investors' interest in susidiary                         (1,385,485)    (2,411,920)    (4,670,435)
    Stock issued in exchange for services                                 (22,063)       936,148         17,200
    Stock issued in exchange for services by subsidiary                      -               600          7,000
    Debenture interest converted to stock                                 106,894        164,055          -
    Premium for extension on Debenture                                    680,500        527,113          -
    Beneficial convertible debt feature                                 3,799,727      6,278,853      1,650,000
    Provision for potential loss on notes receivable                    1,270,307           -              -
    Warrant extensions                                                       -              -           604,342
    Warrant extensions by subsidiary                                         -         4,046,875      8,571,033
    (Decrease)increase in allowance for losses on accounts receivable      12,128       (180,909)       195,840
    (Increase) in accounts receivable                                     268,195       (137,651)       (92,083)
    (Increase) in inventories                                             987,948       (586,029)    (1,679,981)
    (Increase) in inventory valuation allowance                           779,050      2,092,131          -
    (Increase) decrease in prepaid expenses                               (31,495)       113,397       (128,883)
    (Increase) decrease in other assets                                    36,927          3,713         (2,445)
    Increase (decrease) in accounts payable                             1,078,124       (388,636)      (803,237)
    Increase (decrease) in other liabilities                              845,136         66,737        (35,960)
    (Decrease) in deferred revenue                                       (116,146)       (63,854)      (146,000)
                                                                     -------------  -------------  -------------
      Net cash flow used by operating activities                      (11,855,294)   (19,121,752)   (19,971,804)
                                                                     -------------  -------------  -------------
Cash flows from investing activities:
  Purchase of property, plant and equipment                              (111,216)      (845,512)      (954,610)
  (Increase) in notes receivable                                          (31,493)      (313,000)       (50,000)
  Deposit on equipment                                                       -          (300,000)          -
  (Increase) in interest receivable                                       (97,929)       (23,519)       (11,721)
  Acquisition of ICTI                                                  (1,030,000)          -              -
                                                                      -------------  -------------  -------------
    Net cash used by investing activites                               (1,270,638)    (1,482,031)    (1,016,331)
                                                                      -------------  -------------  -------------

Cash flows from financing activities:
  Proceeds from stock offering                                               -              -        13,338,531
  Proceeds from sale by subsidiary of its common stock                       -             3,500       (172,315)
  Proceeds from warrants exercised                                           -            13,200         30,600
  Proceeds from warrants exercised-subsidiary                                -              -             2,000
  Proceeds from sale of Preferred stock-Series A                             -              -         1,840,000
  Proceeds from sale of Preferred stock-Series B                             -         2,027,000           -
  Cash redemption at par - Preferred stock                                   -              -            (7,900)
  Proceeds from debentures payable                                     10,720,000     20,230,000      6,600,000
  Payments on debentures payable                                             -        (2,605,833)          -
  Payments on notes payable                                              (675,393)       (41,904)       (19,509)
  Increase in notes payable                                               550,000           -              -
  Payments on capital lease obligations                                  (101,997)       (65,987)       (24,899)
                                                                     -------------  -------------  -------------
      Net cash provided by financing activities                        10,492,610     19,559,976     21,586,508


      Net increase (decrease) in cash                                  (2,633,322)    (1,043,807)       598,373
                                                                     -------------  -------------  -------------
  Cash and cash equivalents, beginning of year                          2,759,067      3,802,874      3,204,501
                                                                     -------------  -------------  -------------
  Cash and cash equivalents, end of year                             $    125,745     $2,759,067     $3,802,874
                                                                     =============  =============  =============

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>F-6
<TABLE>

                                    Biocontrol Technology, Inc. and Subsidiaries
                                        Consolidated Statements of Cash Flows
                                                     (Continued)

<CAPTION>
                                                                                Year ended December 31,
                                                                         1998             1997            1996
                                                                     -------------   -------------   -------------
<S>                                                                  <C>             <C>             <C>
Supplemental Information:
           Interest paid                                              $    364,716   $    155,647     $    72,578
                                                                     =============   ============    ============

Supplemental schedule of non-cash
investing and financing activities:

Acquisition of equipment with note payable                            $       -       $      -         $  145,063
                                                                     =============    ===========    ============

Acquisition of ICTI with note payable                                 $  3,350,000    $      -         $     -
                                                                     =============    ===========    ============

Acquisition of property under a capital lease:
           Building                                                   $       -       $      -      $   1,205,760
           Land                                                               -              -            246,250
           Construction in progress                                           -              -          1,137,500
           Equipment                                                        24,050        154,539            -
                                                                     -------------    -------------   -------------
                                                                      $     24,050    $   154,539   $   2,589,510
                                                                     =============    =============   =============

Capital Lease Termination
           Reduction of capital lease obligation                      $  1,184,288    $      -      $        -
                                                                     =============    =============   =============
              Reduction of property
              Construction of Progress                                $  1,459,110    $      -      $        -
              Land                                                         112,500           -               -
                                                                     -------------    -------------   -------------
                                                                      $  1,571,610    $      -      $        -
                                                                     =============    =============   =============


Conversion of Series I-preferred stock for common stock:
          Common stock                                                $       -       $      -      $       2,730
          Additional paid-in capital                                          -              -             24,570
                                                                     -------------    -------------   -------------
                                                                      $       -       $      -      $      27,300
                                                                     =============    =============   =============

Redemption of preferred stock held in escrow                          $       -       $      -      $       2,700
                                                                     =============    =============   =============
Conversion of Series A - preferred stock for common stock:
                Common stock                                          $       -       $      -      $     193,130
                Additional paid in capital                                    -              -              6,870
                                                                     -------------    -------------   -------------
                                                                      $       -       $      -      $     200,000
                                                                     =============    =============   =============

Conversion of Series B- preferred stock for common stock:
  		Common stock                                          $       -       $   220,000   $        -
		Additional paid-in capital                                    -         1,807,000            -
                                                                     -------------    -------------   -------------
                                                                      $       -         2,027,000   $        -
                                                                     =============    =============   =============

Conversion of debentures for common stock                             $ 11,876,780    $19,449,924   $   2,000,000
                                                                     =============    =============   =============

Converion of debenture interest for common stock                      $    106,894    $   164,055   $      27,122
                                                                     =============    =============   =============
Stock granted to related party for note receivable                    $       -       $    25,000   $        -
                                                                     =============    =============   =============
Conversion of warrants for common stock                               $       -       $   510,168   $     375,000
                                                                     =============    =============   =============


The accompanying notes are an integral part of these statements.
</TABLE>




NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES

1.   Organization

     Biocontrol  Technology, Inc. - BICO  (the  Company)  and  its
     subsidiaries  are  engaged in the development,  manufacturing
     and   marketing   of  biomedical  products   and   biological
     remediation products.

2.   Principles of Consolidation

     The  consolidated financial statements include  the  accounts
     of: Diasensor.com, Inc. (Diasense) a 52% owned subsidiary  as
     of  December 31, 1998 and 1997; Petrol Rem, Inc., a 67% owned
     subsidiary  as of December 31, 1998 and 1997;  IDT,  Inc.,  a
     99.1%  owned  subsidiary as of December 31,  1998  and  1997;
     International  Chemical Technologies,  Inc.,  a  58.4%  owned
     subsidiary   as  of  December  31,  1998  and  Barnacle   Ban
     Corporation, a 100% owned subsidiary as of December 31,  1998
     and   1997.    All  significant  intercompany  accounts   and
     transactions  have  been eliminated.   Subsidiary  losses  in
     excess  of  the  unrelated investors'  interest  are  charged
     against the Company's interest.

3.   Cash and Cash Equivalents

     For  purposes  of  the statement of cash flows,  the  Company
     considers  all highly liquid investments with a  maturity  of
     three months or less at acquisition to be cash equivalents.

4.   Inventory

     Inventory is valued at the lower of cost (first-in, first-out
     method)  or  market.   An  inventory valuation  allowance  is
     provided  against  finished  goods  and  raw  materials   for
     products for which a market has not yet been established.

5.   Property and Equipment

     Property  and  equipment are accounted for at  cost  and  are
     depreciated over their estimated useful lives on a  straight-
     line  basis.   Amortization of assets recorded under  capital
     leases is included with depreciation expense.

6.   Patents

     Patents  are  amortized  over their legal  or  useful  lives,
     whichever  is less.  Accumulated amortization on patents  was
     $94,508   and  $90,176  at  December  31,  1998,  and   1997,
     respectively.


7.   Goodwill
     The  Company recognized $5,310,501 of goodwill in  connection
     with  a  Stock Purchase Agreement dated February 20, 1998  to
     acquire  58.4%  of International Chemical Technologies,  Inc.
     For  purposes  of  amortizing this goodwill,  management  has
     determined   a   useful   life  of  5   years.    Accumulated
     amortization on goodwill was $878,080 at December 31, 1998.


8.   Deferred Revenue on Contract Billings

     Revenue  is  recognized from sales when products are  shipped
     and/or services performed.  Advance billings are recorded  as
     deferred revenue until shipment or performance.

9.   Loss Per Common Share

     Loss  per  common  share is based upon the  weighted  average
     number  of  common  shares  outstanding  which  amounted   to
     266,362,526  shares in 1998, 71,415,351 shares  in  1997  and
     42,266,597  shares  in  1996, respectively.  Shares  issuable
     under  stock options, stock warrants, convertible  debentures
     and   convertible   preferred   stock   are   excluded   from
     computations, as their effect is antidilutive.

10.  Research and Development Costs

     Research  and development costs are charged to operations  as
     incurred.     Machinery,   equipment   and   other    capital
     expenditures,  which  have  alternative  future  use   beyond
     specific research and development activities, are capitalized
     and depreciated over their estimated useful lives.

11.  Income Taxes

     The   Company   previously  adopted  Statement  of   Financial
     Accounting Standards No. 109 (FAS 109), Accounting for  Income
     Taxes,  which  requires  the asset  and  liability  method  of
     accounting for income taxes.  Enacted statutory tax rates  are
     applied  to temporary differences arising from the differences
     in  financial statement carrying amounts and the tax bases  of
     existing assets and liabilities. Due to the uncertainty of the
     realization of income tax benefits, (Note K), the adoption  of
     FAS  109  had  no  effect on the financial statements  of  the
     Company.
     
12.  Interest

     The  Company follows the policy of capitalizing interest as  a
     component  of  the  cost  of  property,  plant  and  equipment
     constructed for its own use.  Total interest incurred for  the
     periods  December  31,  1998,  1997,  and  1996  was  $589,300
     $528,942,  and  $236,280,  respectively,  of  which  $481,025,
     $315,624,   and   $133,460,  respectively,  was   charged   to
     operations.

13.  Estimates and Assumptions

     The  preparation  of financial statements in  conformity  with
     generally  accepted accounting principles requires  management
     to  make  estimates and assumptions that affect  the  reported
     amounts of assets and liabilities and disclosure of contingent
     assets and liabilities at the date of the financial statements
     and  the reported amounts of revenues and expenses during  the
     reporting  period.   Actual results could  differ  from  those
     estimates.  The Company has established allowances based  upon
     management's  evaluation of inventories, accounts  receivable,
     and receivables from related parties.
     
14.  Common Stock Warrants

     The Company recognizes cost, if any, on warrants granted based
     upon  the excess of the market price of the underlying  shares
     of  common stock as of the warrant grant date over the warrant
     exercise price.  Had the Company adopted the fair value  based
     accounting method for recognizing stock-based compensation (as
     permitted  by  Financial  Accounting  Standard  No.  123)  its
     reported  net  losses (utilizing the Black-Scholes  method  of
     valuation) for the periods ending December 31, 1998, 1997  and
     1996  would  have been approximately $25,500,000, $33,400,000,
     and  $25,800,000, respectively.  Net loss per share under  the
     fair  value  based  accounting method for the  periods  ending
     December 31, 1998, 1997 and 1996 would have been approximately
     $.10, $.47, and $.92, respectively.

15.  Debt Issue Costs

     The  Company follows the policy of expensing debt issue  costs
     on  debentures during the period of debenture issuance.  Total
     debt  issue costs incurred for the periods December 31,  1998,
     1997,  and  1996  was  $1,865,682, $3,306,812,  and  $502,000,
     respectively.

16.  Concentration of Credit Risk

     Financial  instruments, which potentially subject the  Company
     to   significant  concentrations  of  credit   risk,   consist
     principally  of  cash  investments  at  commercial  banks  and
     receivables from officers and directors of the Company.   Cash
     and  cash  equivalents  are temporarily invested  in  interest
     bearing   accounts   in  financial  institutions,   and   such
     investments  may  be  in excess of the FDIC  insurance  limit.
     Receivables from directors and officers of the Company (Note C
     and  L)  are unsecured and represent a concentration of credit
     risk due to the common employment and financial dependency  of
     these individuals on the Company.

17.  Comprehensive Income

     The Company's consolidated net income (loss) is substantially
     the  same  as  comprehensive income  to  be  disclosed  under
     Statement of Financial Accounting Standards No. 130.

18.  Beneficial Convertible Debt Feature

     Beneficial   conversion  terms  included  in  the   Company's
     convertible   debentures  are  recognized  as   expense   and
     additional  paid  in  capital  at  the  time  the  associated
     debentures are issued.

19.  Reclassification

     Certain  items included in the financial statements of  prior
     periods  have been reclassified to conform to classifications
     in  the 1998 financial statements.  Such reclassification had
     no effect on prior year reported net losses.

NOTE B  - OPERATIONS AND LIQUIDITY

     The  Company  and its subsidiaries have incurred  substantial
     losses  in  1998  and in prior years and  have  funded  their
     operations and product development primarily through the sale
     of  stock and issuance of debt instruments.  Until such  time
     that products can be successfully developed and marketed, the
     Company and its subsidiaries will continue to need to fulfill
     working  capital requirements through the sale of  stock  and
     issuance  of debt.  The inability of the Company to  continue
     its   operations,  as  a  going  concern  would  impact   the
     recoverability and classification of recorded asset amounts.

     The  ability  of  the  Company to continue  in  existence  is
     dependent  on  its having sufficient financial  resources  to
     complete   the   research   and  development   necessary   to
     successfully  bring  products to market and  for  marketplace
     acceptance.  As a result of its significant losses,  negative
     cash  flows  from  operations,  and  significant  accumulated
     deficits  for each of the periods ending December  31,  1998,
     1997 and 1996, there is substantial doubt about the Company's
     ability to continue as a going concern.

     Management  believes  that  its currently  available  working
     capital, anticipated contract revenues,  subsequent sales  of
     stock and future debt issuance will be sufficient to meet its
     projected expenditures for a period of at least twelve months
     from December 31, 1998.




NOTE C - NOTES RECEIVABLE

     Notes  receivable  due  from various  related  and  unrelated
     parties consisted of:

                                     Dec. 31,     Dec. 31,
                                       1998         1997
  Related Parties
  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand     $    8,500    $    8,500
  with 12% interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         82,400        82,400
  with 10% simple interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         83,000        83,000
  with 8.25% simple interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         25,000        25,000
  with 8.25% simple interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         35,000        35,000
  with 8.25% simple interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         15,000        15,000
  with 8.25% simple interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         25,000          -
  with 8.25% simple interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand        250,000          -
  with 8.25% simple interest.

  Note receivable from Glenn
  Keeling, Director,
   Payable upon demand with 10%          5,000         5,000
  simple interest.

  Note receivable from Glenn
  Keeling, Director
   Payable upon demand with 8.25%       50,000        50,000
  interest.

  Note receivable from Glenn
  Keeling, Director
   Payable upon demand with 8.25%      190,000          -
  interest.

  Note receivable from Glenn
  Keeling, Director
   Payable upon demand with 8.25%       20,000        20,000
  interest.

  Note receivable from T.J. Feola,
  Director
   Payable upon demand with 8.25%       50,000        50,000
  interest.

  Note receivable from T.J. Feola,
  Director
   Payable upon demand with 8.25%      185,000          -
  interest.

  Note receivable from Dave Purdy,
  T.J. Feola, Fred Cooper, Glenn         -            35,000
  Keeling, all directors who are
  jointly liable to the company.

  Note receivable from Allegheny
  Food  Services, Inc. of which
  Joseph Kondisko, a former            200,000       250,000
  director, is principal owner,
  payable in monthly installments
  of $3,630, including interest at
  9.25%, with a final balloon
  payment on April 1, 2001.

  Unrelated Parties
  -----------------
  Note receivable from an
  individual, payable upon
  Demand with 8.75% interest.           12,000        12,000

  Note receivable from
  HemoCleanse, Inc., payable
  without Interest on demand.             -           75,000

  Note receivable from HemoCleanse
  Inc, payable on demand after
  December 31,2002 with interest
  accrued at a Rate of 20% per annum.  130,493          -
                                     -----------    ---------
                                     1,366,393       745,900
  Less current notes receivable              0       122,000
                                     -----------    ---------
  Noncurrent                      $  1,366,393    $  623,900
                                  ==============  ===========

     Accrued interest receivable on the related party notes as  of
     December   31,  1998  and  1997  was  $155,628  and  $75,343,
     respectively.

     Due  to  the  financial dependency of the above officers  and
     directors  on  the Company, an allowance of   $1,270,307  was
     provided by Management during 1998.


NOTE D - INVENTORY

     Inventories consisted of the following as of:

                                      Dec. 31,         Dec. 31,
                                        1998             1997

          Raw materials            $  3,498,976     $  4,380,254
          Work-in-process                     0           47,976
          Finished goods                954,589        1,005,788
                                   ------------     -------------
                                      4,453,565        5,434,018
          Less valuation allowance   (4,379,050)      (3,600,000)
                                   -------------    -------------
                                   $     74,515     $  1,834,018
                                   =============    =============

     The inventory valuation allowance was increased to $4,379,050
     in  1998,  from  $3,600,000 in 1997 and $ 1,507,869  in  1996
     based  upon  management's  estimation  of  market  value   of
     materials  for products for which a market has not  yet  been
     established.

NOTE E - ACCRUED LIABILITIES

     Accrued liabilities consisted of the following as of:

                                    Dec. 31,       Dec. 31,
                                      1998           1997
      Current
      Accrued interest          $   276,378       $  37,347
      Accrued payroll               733,657          12,500
      Accrued payroll taxes           1,919          13,606
        and withholdings
      Accrued vacation               46,654          87,652
      Other accrued liabilities      38,036          64,014
                                -----------       ---------
                                $ 1,096,644        $215,119
                                ===========       =========



NOTE F - BUSINESS SEGMENTS

The   Company   operates  in  three  reportable  business   segments:
Biomedical  devices,  which includes the  operations  of   Biocontrol
Technology, Inc., and Diasensor.com, Inc.;  Bioremediation, which includes
the operations of Petrol Rem, Inc.;  and Marine Paint Products, which
includes  the  operations of Barnacle Ban Corporation.  Following  is
summarized   financial  information  for  the  Company's   reportable
segments:



<TABLE>
                             Biomedical  Bioremediation   Marine      All    Consolidated
                             Devices                      Paint       Other
                                                          Products
<S>                         <C>              <C>          <C>       <C>      <C>

1998
Sales to external customers   1,028,484         45,382      40,835      31,267     1,145,968
Cost of products sold           483,388         33,061      32,777      38,595       587,821
Gross profit (Loss)             545,096         12,321       8,058      (7,328)      558,147
Identifiable assets           8,614,498        168,315       8,770   1,043,986     9,835,569
Capital expenditures            105,827              0           0       5,389       111,216
Depreciation & amortization   1,563,366         36,061       5,938     105,504     1,710,869

1997
Sales to external customers $   880,919       $138,362    $136,624  $        0  $  1,155,905
Cost of product sold            445,843         88,178     107,310           0       641,331
Gross profit                    435,076         50,184      29,314           0       514,574
Identifiable assets          11,122,314        602,460      56,860     999,666    12,981,300
Capital expenditures            661,095          4,460       8,680     526,933     1,000,051
Depreciation & amortization     720,150         33,976       2,751      93,925       850,802

1996
Sales to external customers     508,561         47,625      41,406         0       597,592
Cost of products sold           288,537         16,092      20,785         0       325,414
Gross profit                    220,024         31,533      20,621         0       272,178
Identifiable assets          13,683,657        380,851      96,710   382,773    14,543,991
Capital expenditures          3,362,400          9,188      23,755   293,840     3,689,183
Depreciation & amortization     498,256         35,725       5,406    48,120       587,507

</TABLE>

NOTE G - LONG TERM DEBT

Long term debt consisted of the following as of:
                                                     Dec. 31,       Dec. 31,
                                                       1998           1997

Note Payable to individuals with interest at       $  250,000     $        0
prime   plus   2%,   collateralized   by   a
confession of judgement, payable in  monthly
installments   of   $60,000   beginning   on
February  10,  1999  with  a  final  balloon
payment  of  all  remaining  principal   and
interest on May 10, 1999.

Note   Payable  in  connection  with   stock        2,900,000              0
purchase  agreement for  58.4%  interest  in
International  Chemical  Technologies,  Inc.
(ICTI). The note bears interest at a rate of
8%  and  is collateralized by the shares  of
ICTI purchased in the transaction.  The note
is   payable  in  monthly  installments   as
follows:   (I) on   the first  day  of  each
calendar month from April 1,1998 through and
including  September  1,  1998  a  principal
payment of $ 150,000 per month plus interest
(ii)    on  October  1,  1998,  a  principal
payment  of $1,000,000 plus accrued interest
(iii)   on  the  first day of each  calendar
month  from  November 1,  1998  through  and
including   November  1,  1999  a  principal
payment  of $ 100,000 per month plus accrued
interest  and  (iv)  on December 1,  1999  a
final   payment   equal  to  the   remaining
outstanding  principal  balance   plus   all
accrued  interest thereon.  At December  31,
1998, the Company was, and continues to  be,
in  default  on  the  terms  of  this  loan.
Accordingly,  the  unpaid balance  could  be
declared immediately due and payable at  the
option of the lender.

Note  Payable  by the Company's  subsidiary,        1,191,667              0
International  Chemical  Technologies,  Inc.
(ICTI)  to,   it's former shareholder.   The
loan  is  guaranteed  by  the  Company   and
collateralized   by   all    tangible    and
intangible assets of ICTI, and assignment of
ICTI's   interest  in  its  lease  for   its
production   facilities.    Principle    and
interest  at 9.5% per annum are  payable  in
thirty-five equal  monthly  installments  of
$36,111 each commencing on April 1,1998 with
a  final  payment of all remaining principal
and  interest  due  on March  1,  2001.   At
December  31,  1998, the  Company  was,  and
continues to be in default on the  terms  of
this  loan.  Accordingly, the unpaid balance
could   be  declared  immediately  due   and
payable at the option of the lender.

Commercial Premium Finance Agreement payable           53,296              0
in   nine  monthly  installments  of  $7,818
including interest at 8% per annum beginning
November 1, 1998.

Note  Payable  due on January 5,  1999  with          150,000              0
interest   at  a  rate  of  8%  per   annum.
Collateralized by 5,444,644  shares  of  the
Company's common stock.

Note  Payable to a bank in monthly  payments
of $999 including interest at a rate of 7.35%.            -           13,007
Collateralized  by cash on deposit.

Note  Payable  in monthly payments of $374
including interest at a rate of 18.00%.                 2,682          5,452
Collateralized by equipment.

Note  Payable to a bank in monthly  payments
of $433 including interest at a rate of 8.75%.          4,533          9,112
Collateralized by equipment.
                                                    ----------     ---------
                                                    4,552,178         27,571


Current portion of long-term debt                   4,552,178         18,765
                                                    ----------     ---------
Long-term debt                                     $        0        $ 8,806
                                                   ===========     =========

NOTE H - LEASES

     Operating Leases

     The  Company  is  committed under a  noncancelable  operating
     lease for its research and product development facility.  The
     lease  between the Company and a group of investors  (lessor)
     which  includes  four  of  the Company's  Executive  Officers
     and/or  Directors  is  for a period of 240  months  beginning
     September  1,  1990.  Monthly rental under the terms  of  the
     lease is $8,810 for a period of 119 months to August 1,  2000
     when  the monthly rental payments shall be fixed at an amount
     equal  to the fair rental value of the property as determined
     by mutual agreement of lessor and the Company for the balance
     of  the  lease.  Total rent expense was $ 105,720 in each  of
     the years 1998, 1997 and 1996.  Future minimum lease payments
     as  of  December 31, 1998 are $ 105,720 for 1999 and  $61,670
     for  2000  on  which  date  the  rental  payments  shall   be
     renegotiated.

     The  Company  and its related subsidiaries also  lease  other
     office  facilities, various equipment and  automobiles  under
     operating  leases  expiring in various  years  through  2002.
     Total  lease  expense related to these leases  was  $173,609,
     $295,809, and $239,096 in the years ended December 31,  1998,
     1997 and 1996, respectively.

     During  1996, the Company leased two manufacturing  buildings
     under  capital leases expiring in various years through 2011.
     The  assets and liabilities under capital leases are recorded
     at  the  lower  of  the present value of  the  minimum  lease
     payments  or  the fair value of the asset.   The  assets  are
     depreciated  over the lower of their related lease  terms  or
     their  estimated  productive lives.  Depreciation  of  assets
     under capital leases is included in depreciation expense.

     During  1998, the Company terminated the lease of one of  its
     two  manufacturing buildings in response to the filing  of  a
     judgement  for nonpayment under the terms of the lease.   The
     company  recognized  a  loss  of  $387,321  based  upon   the
     difference  between  the remaining lease obligation  and  the
     property relinquished.

     The  following  is a summary of property held  under  capital
     leases:

                                             Dec. 31,       Dec. 31,
                                              1998           1997

      Building                              $ 1,207,610    $ 1,207,610
      Construction in Progress                        0      1,465,152
      Land                                      133,750        246,250
      Equipment                                 289,531        297,828
                                            -----------      ---------
            Sub Total                         1,630,891      3,216,840

      Less: Accumulated Depreciation            277,069        159,129
                                            -----------      ---------
      Total Property under Capital Leases   $ 1,353,822    $ 3,057,711
                                            ===========    ===========

     Minimum  future  lease  payments  to  related  and  unrelated
     parties are as follows:
                            Related   Unrelated
                            Parties    Parties       Total

     1999                   105,720    423,314      529,034
     2000                    61,670    360,586      422,256
     2001                         0    337,893      337,893
     2002                         0    268,724      268,724
     2003                         0    252,720      252,720
     Thereafter                   0  1,630,566    1,630,566
                           --------  ---------    ---------
     Future minimum lease
       payments             167,390  3,273,803    3,441,193
                           ========  =========    =========

NOTE I - SUBORDINATED CONVERTIBLE DEBENTURE

     During 1998, 1997 and 1996 the Company issued subordinated 4%
     convertible debentures totaling $10,720,000, $20,230,000  and
     $6,600,000,  respectively.  Such convertible debentures  were
     issued pursuant to Regulation S, Regulation D, and/or Section
     4(2)  and  have  a one-year mandatory maturity  and  are  not
     saleable  or convertible for a minimum of 45 to 90 days  from
     issuance.   At  December 31, 1998 and 1997, the  subordinated
     convertible  debentures  totaled $2,825,000  and  $3,301,280,
     respectively.

     As  of  December 31, 1998, and 1997, the conversion price  of
     the  debentures would have been approximately $.059 and $.146
     per share, respectively, based upon a formula which applies a
     discount  to  the average market price for the previous  week
     and  determined by the length of the holding period.   As  of
     December  31,  1998, and 1997, the number of shares  issuable
     upon   conversion   of   all   outstanding   debentures   was
     approximately   60.1  million  and  23.9   million    shares,
     respectively,  which  would  have  reflected   discounts   of
     approximately 23% and 18%, respectively.

NOTE J - STOCKHOLDERS' EQUITY

     The  Board  of  Directors of the Company may issue  preferred
     stock in series, which would have rights as determined by the
     Board.

     During  1996,  2,730 shares of the Series I  preferred  stock
     were converted to common stock, 790 shares were redeemed  for
     cash and an escrow payable of $2,700 was established for  the
     redemption of the remaining 270 shares.

     During  1996,  20,000  shares of  the  Series  A  convertible
     preferred stock were sold and converted.

     During  1997  22,000  shares  of  the  Series  B  convertible
     preferred stock were sold and converted.

     Common Stock Warrants

     During 1998, warrants ranging from $.05 to $2.00 per share to
     purchase  2,670,000 shares of common stock  were  granted  at
     exercise  prices  which were equal to or  above  the  current
     quoted  market  price  of  the  stock  on  the  date  issued.
     Warrants  to purchase 7,831,662 shares of common  stock  were
     exercisable  at  December 31, 1998.  The per  share  exercise
     prices of these warrants are as follows:

                   Shares            Exercise
                                     Price
                      20,000              $.05
                      20,000              $.06

                     400,000              $.13
                      10,000              $.22
                   1,226,700              $.25
                      80,000              $.33
                      50,000              $.38
                       1,482              $.45
                     350,000              $.50
                   3,484,000             $1.00
                     200,000             $1.25
                     150,000             $1.48
                       2,000             $1.69
                   1,425,000             $2.00
                       2,000             $2.09
                      94,000             $2.125
                       2,000             $2.13
                      69,480             $2.25
                      50,000             $2.41
                     105,000             $2.75
                      25,000             $3.00
                      25,000             $3.20
                       5,000             $3.31
                      25,000             $3.50
                      10,000             $4.03
                  ----------
          Total    7,831,662
                  ==========

     The fiscal year in which common stock warrants were granted
     and the various expiration dates by fiscal year are as
     follows:

 Fiscal    Warrants          Warrants Expire During Fiscal Year
  Year      Granted     1999     2000      2001        2002       2003
Granted

  1990     406,700       -         -       226,700       -       180,000

  1991   1,251,482    351,482      -       900,000       -          -

  1992      25,000       -       25,000       -          -          -

  1993     154,000       -         -       144,000       -        10,000

  1994     130,000    130,000      -          -          -          -

  1995      21,000       -       21,000       -          -          -

  1996     609,480     59,480      -       550,000       -          -

  1997   2,544,000    200,000      -     1,400,000    944,000       -

  1998   2,690,000       -         -          -     1,200,000  1,490,000
         ---------    -------   -------    ------   ---------  ---------
         7,831,662    740,962    46,000  3,220,700  2,144,000  1,680,000
         =========  =========   =======  =========  =========  =========

     The  following  is  a summary of warrant transactions  during
     1998:

          Outstanding beginning of period:          5,346,662
          Granted during the twelve-month period:   2,690,000
          Canceled during the twelve-month period:    205,000
          Exercised during the twelve-month period:         0
                                                   ----------
          Outstanding and eligible for exercise:    7,831,662
                                                   ==========

     Common Stock Reserve

     At December 31, 1998 the Company has reserved unissued common
     stock as follows:

               Warrants                    7,831,662
               Convertible debentures     63,422,600
               Loan Security               5,444,644
                                          ----------
               Total                      76,698,906
                                          ==========

     Warrant Extensions

     During  1998,  the  Company extended  the  exercise  date  of
     warrants  to  purchase 1,510,180 shares of  common  stock  to
     certain  officers,  employees and consultants.   The  warrant
     shares  were  originally granted at exercise  prices  ranging
     from  $.25 to $3.20, and were extended at the original  grant
     price.  No expense was charged to operations since the market
     price was less than the original warrant price.

     During  1997,  the  Company extended  the  exercise  date  of
     warrants  to  purchase  177,800 shares  of  common  stock  to
     certain  officers and consultants.  The warrant  shares  were
     originally  granted at exercise prices ranging from  $.25  to
     $3.50,  and  were extended at the original grant  price.   No
     expense was charged to operations since the market price  was
     less than the original warrant price.

     During  1996,  the  Company extended  the  exercise  date  of
     warrants  to  purchase  351,482 shares  of  common  stock  to
     certain  officers and consultants.  The warrant  shares  were
     originally  granted at exercise prices ranging from  $.45  to
     $.50,  and  were extended at the original grant  price.   The
     Company  recorded  a  $604,342  expense  for  the  difference
     between  the fair market value on the date the warrants  were
     extended and the warrant exercise prices.

     Diasensor.com, Inc. Common Stock

     At  December 31, 1998, warrants to purchase 6,674,113  shares
     of Diasensor.com, Inc. common stock were exercisable. The per
     share  exercise  price for  3,255,000  shares  is  $.50,  for
     2,286,763 shares is $1.00 and for 1,132,350 shares is  $3.50.
     The warrants  expire at various dates  through  2003.  To the
     extent that all the  warrants  are  exercised, the  Company's
     proportionate ownership would be diluted from 52% at December
     31, 1998 to 40.3%.

     Diasensor.com,Inc. Warrant Extensions

     During 1998, Diasensor.com,Inc. extended the exercise date of
     warrants  to  purchase  825,000  shares  of  common  stock to
     certain officers, directors, employees and consultants.   The
     warrant shares were  originally granted at an  exercise price
     of $.50 and extended at the same price.No expense was charged
     to  operations  since the  market  price  was  less  than the
     original warrant price.

     During  1997, Diasensor.com, Inc. extended the exercise  date
     of warrants to purchase 2,236,550 shares of common  stock  to
     certain officers, directors, employees and consultants.   The
     warrant shares were originally granted at an  exercise  price
     of $1.00, and extended at the same price. Diasensor.com, Inc.
     recorded a $4,046,875 expense for the difference between  the
     assumed value on the date the warrants were extended and  the
     warrants' exercise prices.

     During 1996, Diasensor.com, Inc.  extended  the exercise  date
     of warrants to purchase 2,970,013  shares of common  stock  to
     certain officers, directors, employees  and consultants.   The
     warrant  shares  were  originally  granted at exercise  prices
     ranging from  $.50  to  $1.00,  and extended at the same price.
     Diasensor.com, Inc.  recorded  a  $8,571,033  expense  for the
     difference between the assumed value on the date  the warrants
     were extended and the warrants' exercise prices.

     Petrol Rem Common Stock

     At December 31, 1998 warrants to purchase 4,140,000 shares of
     Petrol  Rem  common stock were exercisable.   The  per  share
     exercise  price  for 3,940,000 is $.10 and for  2,000,000  is
     $1.00.   The  warrants expire at various dates through  2003.
     To  the  extent that if all the warrants were exercised,  the
     Company's proportionate ownership would be diluted  from  75%
     at December 31, 1998 to 62.1%.

     IDT Common Stock

     At December 31, 1998 warrants to purchase 4,330,000 shares of
     IDT  common  stock were exercisable.  The per share  exercise
     price for 4,135,000 shares is $.10 and for 175,000 shares  is
     $1.00 and for 20,000 shares is $2.00.  The warrants expire at
     various  dates through 2003. To the extent that  if  all  the
     warrants   were   exercised,  the   Company's   proportionate
     ownership would be diluted from 99.1% at December 31, 1998 to
     69.3%.


NOTE K - INCOME TAXES

     As  of  December 31, 1998, the company and its  subsidiaries,
     except  Diasensor.com, Inc.  and  Petrol Rem,  have available
     approximately $83,220,000 of net operating loss carryforwards
     for federal income  tax   purposes.   These carryforwards are
     available, subject to limitations,  to offset  future taxable
     income,  and  expire  in  tax  years  1998 through 2019.  The
     Company   also   has   research   and   development    credit
     carryforwards available to offset  federal  income  taxes  of
     approximately  $1,100,000 subject to limitations, expiring in
     tax  years  2005 through 2019.

     As  of  September  30,  1998, the end  of  its  fiscal  year,
     Diasensor.com, Inc. had available  approximately  $24,700,000
     of net operating loss  carryforwards  for  federal income tax
     purposes. These carryforwards, which expire during the  years
     2005 through  2019, are available, subject to limitations, to
     offset future taxable income.  Diasensor.com, Inc.  also  has
     research and development  credit  carryforwards available for
     federal income tax purposes of approximately $700,000,subject
     to limitations, expiring in the years 2005 through 2012.

     As   of   December  31,  1998,  Petrol  Rem   had   available
     approximately $10,150,000 of net operating loss carryforwards
     for  federal income tax purposes.  These carryforwards, which
     expire  during  the years 2008 through 2019,  are  available,
     subject  to  limitations, to offset  future  taxable  income.
     Petrol   Rem   also  has  research  and  development   credit
     carryforwards  available for federal income tax  purposes  of
     approximately $15,000.

     Certain  items  of  income  and  expense  are  recognized  in
     different  periods  for financial and  income  tax  reporting
     purposes.

     The  Company has not reflected any future income tax benefits
     for these temporary differences or for net operating loss and
     credit  carryforwards  because  of  the  uncertainty  as   to
     realization.  Accordingly, the adoption of  FAS  109  had  no
     effect on the financial statements of the Company.

     The  following  is  a  summary  of  the  composition  of  the
     Company's   deferred  tax  asset  and  associated   valuation
     allowance  at  December  31,  1998,  December  31,  1997  and
     December 31, 1996:



                           Dec. 31,1998     Dec. 31,1997   Dec. 31, 1996

       Net Operating Loss   $28,294,800     $ 21,508,400    $ 15,330,642
       Warrant Expense        2,741,397        2,741,397       2,741,397
       Tax Credit
       Carryforward           1,100,000          580,000         520,000
                            -----------     ------------     -----------
                             32,136,197       24,829,797      18,592,039
       Valuation Allowance  (32,136,197)     (24,829,797)    (18,592,039)
                            -----------     ------------     -----------
       Net Deferred Tax
       Asset                $         0    $           0     $         0
                            ===========     ============     ===========

     The  deferred tax benefit and the associated increase in  the
     valuation allowance are summarized in the following schedule:


                                                    Increase
                                                       in
                                      Deferred     Valuation
                                        Tax       Allowance     Net
                                       Benefit

     Year-ended December 31, 1998  ($ 7,306,400)   $ 7,306,400   $ 0
     Year-ended December 31, 1997  ($ 6,237,758)   $ 6,237,758   $ 0
     Year-ended December 31, 1996  ($ 4,702,742)   $ 4,702,742   $ 0
     From March 20,1972(inception) -------------   -----------   ---
     through December 31, 1998     ($32,136,197)   $32,136,197   $ 0


NOTE L - RELATED PARTY TRANSACTIONS

     Research and Development Activities
     The  Company is currently performing research and development
     activities  related to the non-invasive glucose  sensor  (the
     Sensor)  under  a  Research  and Development  Agreement  with
     Diasensor.com, Inc. If successfully developed,the Sensor will
     enable users  to  measure blood glucose levels without taking
     blood samples. Diasensor.com, Inc. acquired the rights to the
     Sensor, including  one United States  patent  from  BICO  for
     $2,000,000  on  November  18, 1991.  Such  patent covers  the
     process  of  measuring  blood  glucose levels non-invasively.
     Approval  to   market   the  Sensor  is  subject  to  federal
     regulations including the Food and Drug Administration (FDA).
     The  Sensor  is  subject to clinical  testing and  regulatory
     approvals by the FDA.   BICO is responsible for substantially
     all activities in connection  with the development,  clinical
     testing, FDA approval  and  manufacturing of  the  Sensor. As
     discussed in Note B, BICO finances  its  operations  from the
     sales  of  stock  and issuance of debt and was reimbursed for
     costs incurred under the terms and conditions of the Research
     and Development Agreement for the research and development of
     the  Sensor by  Diasensor.com, Inc..  If  BICO is  unable  to
     perform under the Research and Development  or  Manufacturing
     Agreements, Diasensor.com, Inc.  would  need to rely on other
     arrangements to develop and manufacture the Sensor or perform
     these  efforts  itself.

     BICO and Diasensor.com, Inc. have  entered  into  a series of
     agreements  related  to  the  development,  manufacturing and
     marketing of the Sensor.   BICO is to  develop the Sensor and
     carry out all steps necessary to bring the  Sensor  to market
     including  1)  developing  and  fabricating   the  prototypes
     necessary for clinical testing; 2)  performing  the  clinical
     investigations   leading  to  FDA   approval  for  marketing;
     3)  submitting  all  applications to the  FDA  for  marketing
     approval; and 4) developing a manufacturable  and  marketable
     product.  Diasensor.com, Inc. is to conduct the  marketing of
     the Sensor.  The  following  is  a  brief description  of the
     agreements:

     Manufacturing Agreement

     The manufacturing  agreement  between BICO and Diasensor.com,
     Inc. was entered into on January 20, 1992.  BICO is to act as
     the exclusive manufacturer of production  units of the Sensor
     upon the completion of the Research and Development Agreement
     and  sell  the   units  to  Diasensor.com, Inc.  at  a  price
     determined  by  the  agreement.  The term of the agreement is
     fifteen years.

     Research and Development Agreement

     Under a January 1992 agreement between BICO and Diasense.com,
     Inc. beginning in  April 1992,  BICO  received  $100,000  per
     month, plus all direct costs for the research and development
     activities of the Sensor.  This agreement replaced a previous
     agreement  dated May 14, 1991.  The term of the new agreement
     is  fifteen  years.  Under the terms of this  agreement,  the
     Company billed Diasensor.com, Inc. $2,955,863 in research and
     development and general and administrative expenses  for  the
     year   ending   December 31, 1995.  In July 1995,   BICO  and
     Diasensor.com, Inc. agreed to suspend billings,  accruals  of
     amounts  due  and  payments  pursuant  to  the  research  and
     development agreement pending the FDA's review of the Sensor.

     Purchase Agreement

     In November 1991, BICO entered into a Purchase Agreement with
     Diasense.com, Inc.  under  which  Diasens.com, Inc.  acquired
     BICO's rights to the Sensor for a cash payment of $2,000,000.
     This agreement  permits BICO to use Sensor technology for the
     manufacture and sale by BICO of a proposed implantable closed
     loop system. BICO will pay Diasens.com, Inc. a  royalty equal
     to five percent of the  net sales of  such implantable closed
     loop system.

     Real Estate Activities

     Four of the Company's Executives and/or Directors are members
     of  an  eight-member partnership which in July 1990 purchased
     the  Company's real estate in Indiana, Pennsylvania, and each
     has personally guaranteed the payment of lease obligations to
     the   bank   providing  the  funding.   For  their   personal
     guarantees,  the four individuals each received  warrants  to
     purchase 100,000 shares of the Company's common stock  at  an
     exercise price of $.33 per share until June 29, 1998.

     Amounts due from Officers

     At  December  31, 1998 and 1997, Mr. Cooper owed the  Company
     $8,500  related to a 12 percent simple interest demand  loan.
     At  December  31, 1998 and 1997, Mr. Cooper owed the  Company
     $82,400, related to a 10 percent simple interest demand loan.
     At  December 31, 1998, Mr. Cooper owed the Company  $458,000,
     (including  a  $25,000  note for common  stock  purchased  in
     1997),  related to 8.25 percent simple interest demand loans.
     The  accrued interest owed by Mr. Cooper on all demand  notes
     at  December  31,  1998 and 1997 was $ 109,599  and  $67,092,
     respectively.

     At  December 31, 1998 and 1997, the Company had a demand loan
     of $5,000 with 10 percent simple interest with Glenn Keeling,
     a  Director.  At December 31, 1998 and 1997 the Company had a
     demand  loan of $50,000 with 8.25 percent interest  with  Mr.
     Keeling.   At December 31, 1998 and 1997, the Company  had  a
     demand  loan of $20,000 with 8.25 percent interest  with  Mr.
     Keeling.  At December 31, 1998 the Company had a demand  loan
     of $190,000 with 8.25 percent interest with Mr. Keeling.  The
     accrued  interest owed by Mr. Keeling on all demand notes  at
     December  31,  1998  and  1997  was  $  27,810  and   $7,664,
     respectively.

     At  December 31, 1998 and 1997, the Company had a demand loan
     of $50,000 with 8.25 percent simple interest with T.J. Feola,
     a Director. At December 31,1998 the Company had a demand loan
     of  $185,000  with  8.25 percent  simple  interest  with  Mr.
     Feola.   The accrued interest owed by Mr. Feola on the demand
     note  at  December 31, 1998 and 1997 was $ 18,219  and  $588,
     respectively.

     At  December  31, 1997, the Company had a note receivable  of
     $35,000  with 8.25 percent simple interest with  Dave  Purdy,
     Fred Cooper, T.J. Feola and Glenn Keeling,  all Directors who
     are jointly liable.  As of December 31, 1998, this  loan  had
     been repaid in full.

     At  December 31, 1997, the Company had extended  a  one  year
     judgment  note payable September 1, 1997, for $250,000,  with
     an  interest  rate  of  prime plus one percent,  with  Joseph
     Kondisko,  Allegheny  Food Services,  Inc.  of  which  Joseph
     Kondisko,  a  former  director, is principal  owner.   As  of
     December  31,  1998, this loan had been reduced to  $200,000,
     and  restructured to require monthly installments of  $3,630,
     including  interest of 9.25% with a final balloon payment  on
     April 1, 2001.

     Advances to Officers

     During  the  periods  1998  and 1997,  the  Company  and  its
     subsidiaries  made advances to Mr. Cooper.  At  December  31,
     1998  and  1997,  these advances accumulated to  $90,779  and
     $34,732, respectively.

     Employment Contracts

     The Company's employment contracts with four officers and two
     employees  commenced  November 1, 1994 and  end  October  31,
     1999.   These  employment  contracts set  forth annual  basic
     salaries  aggregating  $1,500,000 in  1997  and  expiring  in
     periods  beginning  October  1999  through  2002,  which  are
     subject  to  review  and adjustment.  The  contracts  may  be
     extended  for two to three  year periods.   In the  event  of
     change   in  control  in  the  Company  and  termination   of
     employment,   continuation  of  annual   salaries   at   100%
     decreasing  to 25% are payable in addition to the issuing  of
     shares  of  common  stock as defined in the  contracts.   The
     contracts also provide for severance, disability benefits and
     issuances of BICO common stock under certain circumstances.

NOTE M - COMMITMENTS AND CONTINGENCIES

     Litigation

     Several  class  action lawsuits have been filed  against  the
     company  and  its subsidiary Diasensor.com, Inc. as  well  as
     certain  of  their  directors,   all   of  which  have   been
     consolidated into a single action.  The suit alleges  various
     violations of federal securities laws on behalf of a class of
     plaintiffs who purchased common stock of the Company  between
     April 25,1995 and February 26, 1996,  at which time the value
     of the Company's stock dropped as a result of an  unfavorable
     recommendation  of  a  Panel Review convened  by  the  United
     States Food and Drug Administration with respect to a certain
     medical device owned by Diasensor.com, Inc. and  manufactured
     by the Company.  To date,  a complaint  has been filed in the
     action,to which the defendants have filed a Motion to Dismiss.
     The Company has engaged in voluntary mediation  in  order  to
     explore whether settlement is an option.  As a result of  the
     mediation,  the  plaintiffs agreed to a "standstill"  period,
     which has now expired; however, no further activity has  been
     conducted  by  the  plaintiffs  to  move  the  case  forward.
     Management believes that no federal securities violation  has
     occurred, and they intend to strongly defend the action.   At
     this  time it is not possible to predict the outcome  of  the
     litigation or to estimate the potential damages arising  from
     the claims, since the number of class members, and the volume
     and pricing of shares traded, are unknown.

     Pennsylvania Securities Commission

     The  Pennsylvania  Securities  Commission  is  conducting   a
     private  investigation  of the Company  and  its  subsidiary,
     Diasense.com, Inc. in connection with the sale of securities.
     The  Companies have cooperated with and provided  information
     to  the Pennsylvania Securities Commission in connection with
     the private investigation.  As the Commission's investigation
     is  not  yet complete, there can be no estimate or evaluation
     of the likelihood of an unfavorable outcome in this matter or
     the range of possible loss, if any.

     Additional Legal Proceedings

     During April 1998, the Company and its affiliates were served
     with  subpoenas by the U.S. Attorneys' office  for  the  U.S.
     District Court for the Western District of Pennsylvania.  The
     subpoenas   requested   certain  corporate,   financial   and
     scientific  documents and the Company has provided  documents
     in response to such requests.

     License Agreement

     Under  terms  of  a license agreement with a  shareholder  of
     Petrol  Rem for the marketing rights with respect to  certain
     inventions Petrol Rem is to make minimum royalty payments  of
     $50,000 per year for each year starting in 1999 through 2001.

NOTE N - EMPLOYEE BENEFIT PLAN

     The  Company  has  a  defined  contribution  plan  with  401k
     provisions which covers all employees meeting certain age and
     period  of service requirements.  Employer contributions  are
     discretionary as determined by the Board of Directors.  There
     have  been  no  employer contributions to  the  plan  through
     December 31, 1998.

NOTE O - SUBSEQUENT EVENTS

     Public Offering

     Subsequent to December 31, 1998, and through March 19,  1999,
     the  Company raised funds totaling $4,290,000 pursuant to its
     public offering.

     Common Stock

     Subsequent to December 31, 1998 and through March  19,  1999,
     the  Company issued a total additional 143,455,285 shares  of
     common stock bringing total outstanding common stock at March
     19, 1999, to 564,228,854.


NOTE P -STOCK PURCHASE AGREEMENT


     Effective  March  4,  1998,  pursuant  to  a  Stock  Purchase
     Agreement dated February 20, 1998, the Company acquired 58.4%
     of   International  Chemical  Technologies,  Inc.  (ICTI)   a
     development stage corporation.  ICTI commenced operations  in
     May 1997 and plans to engage in the business of manufacturing
     and  marketing, and licensing rights with respect to  certain
     corrosion/wear-resistant metal alloy coating compositions.

     Consideration  for the purchase of the 58.4%  interest  in  ICTI
     included  a  cash payment of $1,030,000; a promissory  note  for
     $3,350,000  at 8%; 2,000,000 shares of Biocontrol  common  stock
     (fair market value of $250,000), a warrant to purchase 1,000,000
     shares  of  Biocontrol  stock for $2 per share  anytime  through
     March  4,  2003; and the guarantee by Biocontrol of a promissory
     note for $1,300,000 payable by ICTI to the seller.

     The  pro  forma results listed below are unaudited  and  reflect
     purchase  price accounting adjustments assuming the  acquisition
     occurred  at  January 1, 1997.  The pro forma  results  are  not
     necessarily indicative of what actually would have occurred   if
     the  acquisition  had  been  in effect  for  the  entire  period
     presented.   In  addition,  they  are  not  intended  to  be   a
     projection of future results and do not reflect any efficiencies
     that might be achieved from the combined operation.

          Revenue          $  1,434,953
          Net loss         $(32,404,191)
          Loss per share   $      (0.45)

NOTE Q - YEAR 2000 ISSUE

     The Company is currently working to resolve the potential impact
     of   the   Year   2000  on  the  processing  of   date-sensitive
     information.   The  Year 2000 Issue is the  result  of  computer
     programs  being written using two digits (rather than  four)  to
     define  the applicable year.  Programs which are susceptible  to
     problems after December 31,1999 are those which recognize a date
     using  "00"  as the year 1900 rather than the year  2000,  which
     could result in miscalculations or system failures.  Based  upon
     a  review of its own internal programs and software, the Company
     currently  believes that the Year 2000 will not pose significant
     operational  problems to its information systems,  because  such
     systems  are  already compliant or will be made  compliant  with
     minor   adjustments.    In  addition,  ChaseMellon   Shareholder
     Services,  the Company's transfer agent, has disclosed  that  it
     will be Year 2000 compliant and that no interruptions in service
     will occur.  The Company is also conducting an investigation  of
     its  major  suppliers,  vendors and other parties  to  determine
     their  respective  plans  for the  Year  2000  compliance.   The
     Company's common stock currently trades on the Nasdaq electronic
     bulletin  board; Nasdaq and its parent, the NASD, have  analyzed
     its products and systems; are addressing their Year 2000 issues;
     and  are  implementing  a  plan to test  their  systems  and  to
     remediate  any Year 2000 problems.  As of this date, Nasdaq  has
     not  made  a  definitive statement regarding  when  it  will  be
     compliant,  but  has  stated that it  is  making  all  necessary
     changes to its trading systems.  The Company's current estimates
     indicate that the costs of addressing potential problems are not
     expected  to have a material impact upon the Company's financial
     position, results of operations or cash flows in future periods.
     There  can  be  no  assurance, however,  that  modifications  to
     information  systems  which impact the  Company  and  which  are
     required to remediate year 2000 issues will be made on a  timely
     basis  and  that  they will not adversely affect  the  Company's
     systems or operations.