U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

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


Commission file number:    0-23153

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

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



5095 West 2100 South
Salt Lake City, Utah                                                 84120
(Address of principal executive offices)                           (Zip Code)

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


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

As of February 8, 1999,  the  registrant  had issued and  outstanding  2,681,169
shares of Common Stock, par value $.0001.


           Transitional Small Business Disclosure Format (Check One):
                                 Yes [X] No [ ]




                                     Page 1

<PAGE>

                                TABLE OF CONTENTS



                                                                        Page No.

PART I.  FINANCIAL INFORMATION

1.        Financial Statements

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

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

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

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

2.       Management's Discussion and Analysis or Plan of Operation.............7

PART 2.  OTHER INFORMATION................................................... 10



                                     Page 2

<PAGE>
<TABLE>
<CAPTION>
                                                   VOLU-SOL, INC. AND SUBSIDIARY
                                            Condensed Consolidated Balance Sheet
                                                                     (UNAUDITED)
 
                                                               December 31, 1998
--------------------------------------------------------------------------------

               Assets

Current Assets:
<S>                                                                 <C>        
     Cash                                                           $     9,191
     Accounts receivable, less allowance for
        doubtful accounts of $3,176                                      81,950
     Inventories                                                        168,870
                                                                    ------------

               Total current assets                                     260,011

Property and equipment, net                                             165,972
Other assets                                                             24,347
                                                                    ------------

               Total assets                                         $   450,330
                                                                    ============


               Liabilities and Stockholders' Equity

Current liabilities:
     Accounts payable                                               $    19,592
     Accrued liabilities                                                 39,933
     Preferred stock dividends payable                                   29,313
     Accrued interest payable                                            19,213
     Notes payable                                                      346,149
                                                                    ------------

               Total current liabilities                                454,200
                                                                    ------------

Commitments and contingencies                                                --

Stockholders' equity:
     Preferred Stock, $.0001 par value; 10,000,000
     shares authorized:
        10,363 shares issued and 5,863 shares
        outstanding (aggregate liquidation preference
        $ 2,834,277)                                                  2,274,819
     Common Stock, par value $.0001; 50,000,000
     shares authorized, 2,681,169 shares issued and
     outstanding                                                            268
     Additional paid-in capital                                       1,911,541
     Preferred stock subscriptions receivable                          (900,000)
     Accumulated deficit                                             (3,290,498)
                                                                    ------------

               Total stockholders' equity                                (3,870)
                                                                    ------------

               Total liabilities and stockholders' equity           $   450,330
                                                                    ============


--------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                     Page 3

<PAGE>
                                                   VOLU-SOL, INC. AND SUBSIDIARY
                                  Condensed Consolidated Statement of Operations
                                                                     (UNAUDITED)

                                                 Three Months Ended December 31,
--------------------------------------------------------------------------------


                                                       1998           1997
                                                  ---------------------------

Sales                                             $   133,919    $   121,401
Cost of goods sold                                     93,101        120,419
                                                  ---------------------------

         Gross Margin                                  40,818            982

Selling, general and administrative expenses          277,998        171,712
                                                  ---------------------------

         Loss from operations                        (237,180)      (170,730)

Other income (expense):
     Interest Income                                       85            899
     Interest Expense                                  (7,708)        (9,843)
                                                  ---------------------------

     Net loss before provision for income taxes      (244,803)      (179,674)

Provision for income taxes                                 --             --
                                                  ---------------------------

         Net loss                                 $  (244,803)   $  (179,674)
                                                  ===========================

Dividends on Series A preferred stock                 (29,313)       (10,082)
                                                  ===========================

Net loss applicable to common stock               $  (274,116)   $  (189,756)
                                                  ===========================

Net loss per common share - basic and diluted           (0.11)         (0.09)
                                                  ===========================

Weighted average common shares outstanding          2,446,288      2,111,216
                                                  ===========================



--------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.

                                     Page 4

<PAGE>
                                                   VOLU-SOL, INC. AND SUBSIDIARY
                                  Condensed Consolidated Statement of Cash Flows
                                                                     (UNAUDITED)


                                                Three Months Ended December 31,
                                                      1998         1997
                                                  ---------------------------

Cash flows from operating activities:
     Net loss                                      $(244,803)   $(179,674)
     Adjustments to reconcile net loss to
         net cash used in operating activities:
             Depreciation                             19,975       19,646
             Preferred stock issued for services     140,000           --
             (Increase) decrease in:
                 Accounts receivable                 (19,242)       7,059
                 Inventories                            (299)     (34,108)
                 Other assets                         12,117         (700)
             Decrease in:
                 Accounts payable                    (22,942)      (8,924)
                 Accrued liabilities                 (15,526)     (42,180)
                                                  ---------------------------

                     Net cash used in
                     operating activities:          (130,720)    (238,881)
                                                  ---------------------------

Cash flows from Investing activities                      --           --

Cash flows from financing activities:
     Proceeds from sale of preferred stock            53,500       50,000
     Proceeds from notes payable                      70,000           --

                     Net cash provided by
                     financing activities            123,500       50,000
                                                  ---------------------------

                     Net decrease in cash             (7,220)    (188,881)

Cash, beginning of period                             16,411      337,691
                                                  ---------------------------

Cash, end of period                                $   9,191    $ 148,810
                                                  ===========================




--------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.

                                     Page 5

<PAGE>                                     


                          VOLU-SOL, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

(1)      PRESENTATION OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The  accompanying  unaudited  condensed  consolidated  financial  statements  of
Volu-Sol,  Inc. and Volu-Sol Reagents  Corporation,  its wholly owned subsidiary
(collectively,  the  "Company"),  have been prepared  consistent  with generally
accepted accounting  principles for interim financial  information in accordance
with  the   instructions  to  Form  10-QSB  and  Item  310  of  Regulation  S-B.
Accordingly,  such  unaudited  financial  statements  do not  include all of the
information and footnotes required by generally accepted  accounting  principles
for  complete  financial   statements.   In  the  opinion  of  management,   all
adjustments,  consisting  only of normal  recurring  adjustments,  necessary  to
present fairly the financial  position,  results of operations and cash flows of
the Company for the interim  periods  presented,  have been included.  Operating
results  for the  three  months  ended  December  31,  1998 are not  necessarily
indicative of the results that may be expected for the year ending September 30,
1999.  The  Company  suggests  that  these  condensed   consolidated   financial
statements  be read in  conjunction  with the  financial  statements  and  notes
thereto  included in the Company's Form 10-KSB for the year ended  September 30,
1998.

(2)      RELATED-PARTY TRANSACTIONS

From March 5, 1997 through  December 31, 1998,  the Company  borrowed money from
Biomune Systems, Inc. ("Biomune,"the  Company's former parent) totaling $486,500
(through the date of this report),  of which $372,149 remains  outstanding as of
the date of this report,  and is evidenced by a promissory  note. The note bears
interest  at an annual  rate of ten  percent  and is due on demand.  Accrued but
unpaid interest on the note totaled $19,213 at December 31, 1998 and is included
in "accrued interest payable" in the accompanying condensed consolidated balance
sheet as of December 31, 1998. The Company  anticipates  repaying this debt from
proceeds raised in a private placement of the Company's Series A Preferred Stock
(see Note 4).

(3)      INVENTORIES

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

Raw materials, packaging and supplies                  $   47,281
Instruments, biological stains and reagents               121,589
                                                       ----------
                                                       $  168,870
                                                       ==========
                              


(4)      SERIES A PREFERRED STOCK

As of December 31, 1998,  the Company has $900,000 of  subscriptions  receivable
from the sale of 4,500  shares of Series A  Preferred  Stock.  During  the three
months  ended  December 31,  1998,  the Company  sold 267.50  shares of Series A
Preferred Stock for $53,500 in cash.  During the three months ended December 31,
1998,  the  Company  issued  a total of 700  shares  of the  company's  Series A
Preferred Stock as commissions for consulting  services provided to the company.
The Series A Preferred  Stock became  convertible  into Common  Stock  beginning
January 1, 1998. The "conversion price," which is the basis for such conversion,
is the lesser of (i) 80

                                     Page 6

<PAGE>



% of the average  closing bid price of the Company's  Common Stock for the three
trading days  immediately  preceding  the date of  conversion  or (ii) $1.25 per
share.  An investor that  subscribed  to 6,000 shares of the Company's  Series A
Preferred  at  $200  per  share  has  paid   $300,000  of  a  total   $1,200,000
subscription.  The  investor  has  notified  the  Company  that it will  pay the
$900,000 balance of its subscription at such time as the Company begins trading.

(5)      NET LOSS PER COMMON SHARE

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

During the three  months  ended  December  31, 1998 the Company  issued  469,762
shares of Common Stock, as part of the original divestiture,  in the nature of a
dividend.

At December 31, 1998, there were outstanding  options to purchase 527,350 shares
of Common  Stock and there  were  5,862.65  shares of Series A  Preferred  Stock
convertible  into a minimum of 938,024 shares of Common Stock,  neither of which
are  included  in  the   computation  of  Diluted  EPS  because  they  would  be
anti-dilutive.  The  options all relate to options to  purchase  Biomune  common
stock  outstanding at the time of the  divestiture.  The holders of such Biomune
options were also granted options to purchase Volu-Sol common stock.

(6)      SUBSEQUENT EVENTS

As of  February 8, 1999 the Company had  borrowed  an  additional  $26,000  from
Biomune, Inc. the Company's former parent.

ITEM 2.           Management's Discussion and Analysis or Plan of Operation

         Until  October 1, 1997,  the Company  was a division  and then a wholly
owned subsidiary of Biomune.  Effective October 1, 1997, Biomune divested itself
of the  Company  by  distributing  Volu-Sol  Common  Stock to holders of Biomune
Common  Stock as of March 5,  1997.  Since  October  1, 1997,  the  Company  has
operated as a separate entity.  The following  discussion and analysis should be
read  in  conjunction  with  the  Company's  unaudited  condensed   consolidated
financial  statements and the notes thereto contained  elsewhere in this report.
The  discussion  of these  results  should  not be  construed  to imply that any
condition or  circumstance  discussed  herein will  necessarily  continue in the
future.

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

                                     Page 7

<PAGE>

occurrence of unanticipated events. A more detailed description of such risks is
contained in the Company's annual report on form 10-KSB for the year.

Results of Operations

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

         During the three months ended December 31, 1998, the Company's revenues
totaled  $133,919  compared to $121,401 for the three months ended  December 31,
1997. This increase in revenues resulted primarily from the sales of reagents.

         Cost of revenues for the three  months ended  December 31, 1998 totaled
$93,101  compared to $120,419 for the three months ended  December 31, 1997. The
overall  gross  margin  for the  three  months  ended  1998 was 30% of  revenues
compared to less than 1% of revenues  for the  comparable  three months ended in
1997.  The  increase  in the gross  margin on sales of stains  and  reagents  is
attributable to shipping charges that are now being paid by customers as well as
a price increase that was  implemented in March 1998.  Also, the increased gross
margin results from a continued  effort to create a leaner  production  team and
better inventory management.

         Selling,  general and administrative  expenses totaled $277,998 for the
three months ended December 31, 1998,  compared to $171,712 for the three months
ended  December 31, 1997,  an overall  increase of  $106,286.  This  increase is
primarily  attributable to consulting  expenses paid through the issuance of the
Company's Series A Preferred Stock, at a value of $140,000.

         Interest  expense  decreased  from  $9,843 for the three  months  ended
December 31, 1997 to $7,708 for the three months  ended  December 31, 1998.  The
decrease in interest  expense is due to repayment of some of the borrowings from
Biomune, the Company's former parent.

         The Company incurred a net loss applicable to common shares of $274,116
for the three months ended  December 31, 1998 compared to a net loss  applicable
to common shares of $189,756 for the three months ended December 31, 1997.  This
increase is due  primarily to  consulting  expenses paid through the issuance of
the Company's Series A Preferred Stock.

         It is anticipated that the net losses  applicable to common shares will
increase in the future due to dividend requirements associated with the Series A
Preferred   Stock.   As  of  December  31,  1998,   the  Company  had  remaining
subscriptions  receivable  totaling  $900,000.  If only those  subscriptions are
collected  and no further  sales of Series A Preferred  Stock are made,  the net
loss  applicable to common shares would increase by  approximately  $225,000 for
the  one-time  charge  related  to  the  beneficial  conversion  feature  and by
approximately $90,000 per year for recurring dividends at 10 percent.

Liquidity and Capital Resources

         The Company  currently is unable to finance its operations  solely from
its cash flows from operating activities.  From October 1, 1993 through December
31, 1998,  Biomune financed the Company's  operations  through a series of loans
and other  capital  contributions  totaling  approximately  $2,900,000.  Of this
amount,  $372,149  represents a note payable to Biomune through the date of this
report which bears  interest at the rate of 10% per year and which is payable on
demand.  The Company has announced its intentions to sell up to 12,000 shares of
its Series A Preferred  Stock for  $2,400,000.  The Series A Preferred  Stock is
convertible  into Common Stock of the Company.  The "conversion  price" which is
the basis for such conversion is the lesser of

                                     Page 8

<PAGE>



(i) 80% of the average  closing bid price of the Company's  Common Stock for the
three  trading days  immediately  preceding the date of conversion or (ii) $1.25
per share.  The  Company  issued a total of 967.50  shares of Series A Preferred
Stock during the period covered by this report.

         The Company  intends to use the proceeds  from the sale of the Series A
Preferred to repay its indebtedness to Biomune  ($372,149 as of the date of this
Report),  pay the  expenses  of the offer  and sale of the  stock  and  expenses
incurred  in  the  divestiture  of the  Company,  acquire  yet-to-be  identified
complimentary  businesses or product rights, and supplement working capital. The
Company  believes that cash generated by operations,  together with the proceeds
from  the  sale  of its  securities  will be  sufficient  to  meet  its  capital
requirements for a minimum of twelve months.

         As of December  31,  1998,  the Company had cash of $9,191 and negative
working  capital of $194,189  compared to cash of $16,411 and  negative  working
capital of $145,665 as of December 31, 1997.

         During  the  three  months  ended  December  31,  1998,  the  Company's
operating  activities  used cash of $130,720,  much of which was provided by the
sale of Series A Preferred  Stock and funds  borrowed from  Biomune.  During the
three months ended December 31, 1997, the Company's  operating  activities  used
cash in the  amount  of  $238,881,  which was  provided  by the sale of Series A
Preferred Stock and funds borrowed from Biomune.

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

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

Forward-looking Statements and Certain Risk Factors

         Statements  which are not historical facts contained in this report are
forward-looking  statements.  Section  27A of the  Securities  Act of  1933,  as
amended,  provides a safe  harbor for  forward-looking  statements.  In order to
comply with the terms of the safe harbor, the Company cautions that a variety of
factors  could cause the  Company's  actual  results to differ  materially  from
anticipated  results  or  other  expectations  expressed  in  this  report.  The
forward-looking   statements  contained  in  this  Management's  Discussion  and
Analysis  or  Plan  of  Operation  also   contemplate  a  number  of  risks  and
uncertainties  that could  cause  actual  results to differ  from  projected  or
anticipated  results.  The risk factors discussed in Part I, Item 1 ("Business")
and in the "Management's  Discussion and Analysis or Plan of Operation" (Item 6)
of the  Company's  Annual  Report  on Form  10-KSB  for the  fiscal  year  ended
September 30, 1998 may also affect actual operating results.


         PART II - OTHER INFORMATION


                                     Page 9

<PAGE>



ITEM 2.           Changes in Securities

         Unregistered  sales of equity  securities during quarter (other than in
reliance on Regulation S).

           The  following  information  sets forth certain  information  for all
securities the Company sold during the quarter ended December 31, 1998,  without
registration under the Securities Act of 1933 (the "Securities Act").

         During the three  months  ended  December  31,  1998,  the Company sold
267.50 shares of Series A Preferred  Stock for cash proceeds  totaling  $53,500.
All sales  were so  accredited  investors  (as that term is  defined in Rule 501
under Regulation D).

         The Series A Preferred is  convertible  to common stock at the holder's
option into the number of shares of the  Company's  common stock  determined  by
dividing $200.00 plus any accrued and unpaid regular or special  dividends by an
amount  equal to the lesser of (i) the market  price of the common  stock on the
date  of  conversion  less  20%;  or  (ii)  $1.25.  In the  event  of a  merger,
consolidation or sale of all or  substantially  all of the assets of the Company
or a similar business  combination  involving the Company,  all of the shares of
Series A  Preferred,  at the option of the  holder,  may be  converted  into the
number of shares of common stock into which the shares of Series A Preferred are
convertible  at  the  time  of the  closing  of  such  transaction.  Based  on a
conversion factor of $200/$1.25, the number of shares issued during the last two
fiscal years would be convertible into a total of 722,520 shares of common stock
as of the date of this Report.

         Notwithstanding  the  conversion  rights of the Series A Preferred,  no
single  holder (or group of affiliated  holders) may convert  shares of Series A
Preferred  into shares of common  stock in an amount  that would  result in such
holder's  aggregate  ownership of shares of common stock  exceeding  4.9% of the
total number of issued and outstanding shares of common stock.

         In making the foregoing offers and sales of restricted and unregistered
securities , the Company  relied on the  provisions of Sections 3(b) and 4(2) of
the Securities Act and rules and regulations promulgated thereunder,  including,
but not limited to Rules 505 and 506 of Regulation D, which exempts transactions
that do not involve any public  offering of securities from  registration  under
the  Securities  Act. The offer and sale of the  securities in each instance was
not made by any means of general  solicitation,  the securities were acquired by
the investors without a view toward distribution, and all purchasers represented
to the Company that they were sophisticated and experienced in such transactions
and investments and able to bear the economic risk of their investment. A legend
was placed on the  certificates  and instruments  representing  these securities
stating that the securities  evidenced by such  certificates or instruments,  as
the case may be, have not been  registered  under the Securities Act and setting
forth the  restrictions  on their transfer and sale. Each investor also signed a
written agreement that the securities would be sold only upon registration under
the   Securities   Act  or  pursuant  to  an  applicable   exemption  from  such
registration.


ITEM 4.           Exhibits and Reports on Form 8-K

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

         Exhibit No.                Description

         27                         Financial Data Schedule


                                     Page 10

<PAGE>



         (b)      Reports on Form 8-K

         On October 5, 1998,  the Company filed a Current  Report on Form 8-K to
report its agreement with Nasdaq regarding the issuance of additional  shares as
part of the divestiture of the Company from Biomune.

         On October 15, 1998,  the Company filed a Current Report on Form 8-K to
report the change of its independent public accountants.


                                     Page 11

<PAGE>


                                   SIGNATURES

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

                                                              VOLU-SOL, INC.



Date: February 5, 1999                             By: /s/ W. W. Kirton, III
                                                     ---------------------------
                                                     Wilford W. Kirton, III,
                                                     Chief Executive Officer






Date: February 5, 1999                             By: /s/ Michael G. Acton
                                                     ---------------------------
                                                     Michael G. Acton,
                                                     Acting Principal Accounting
                                                     Officer

A:\10QSB.WPD

                                     Page 12