UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended       September 30, 1998                

Commission File Number:             0000-23721
--------------------------------------------------------------------------------

                                 LIFEPOINT, INC.
             (Exact name of registrant as specified in its charter)

DELAWARE                                     #33-0539168                        
(State or other jurisdiction of             (I.R.S. Employer
incorporation or organization)              Identification Number)

10400 Trademark Street, Rancho Cucamonga, CA       91730             
 (Address of Principal Executive Offices)         (Zip Code)

         (909) 466-8047                                                         
Registrant's Telephone Number, Including Area Code


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
         [x] Yes           [  ] No


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the last practicable date.

As of November 10, 1998  - Common Stock, $.001 Par Value, 11,711,206 shares
<PAGE>



                                    PART I

                             FINANCIAL INFORMATION

Item 1.  Financial Statements

                                LIFEPOINT, INC.
                       (A DEVELOPMENT STAGE ENTERPRISE)
                                BALANCE SHEETS


                                                 September 30
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                                     1998         March 31
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                                  (Unaudited)       1998
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current Assets:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
      Cash and cash equivalents                        $ 656,511      $ 597,254
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
      Prepaid expenses and other current assets          418,570        150,150
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Total current assets                     1,075,081        747,404
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Property and equipment, net                              189,398        286,188
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Patents and other assets, net                             53,463         39,692
--------------------------------------------------------------------------------
-----------------------------------------------==================-==============
                                                     $ 1,317,942    $ 1,073,284
-----------------------------------------------==================-==============
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                        LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current Liabilities:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
      Accounts payable                         $ 180,057             $ 119,577
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
      Accrued expenses                           541,516               217,876
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Total current liabilities          721,573               337,453
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Commitments and contingencies (Note 4)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Stockholders' equity:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 Common stock, $.001 par value; 50,000,000 shares
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
   authorized, 11,711,206 and 10,497,206 issued and
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
   outstanding at September 30, 1998 and March 31, 1998,
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
   respectively                                    11,711                10,497
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Additional paid-in capital                        13,554,323         12,398,933
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Deficit accumulated in the development stage     (12,969,665)       (11,673,599)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Total stockholders' equity             596,369            735,831
--------------------------------------------------------------------------------
-----------------------------------------------==============-==================
                                                 $ 1,317,942        $ 1,073,284
-----------------------------------------------==============-==================



    The accompanying notes are an integral part of the financial statements.
                                        2
<PAGE>


                   LIFEPOINT, INC.

          (A DEVELOPMENT STAGE ENTERPRISE)

              STATEMENTS OF OPERATIONS

                     (Unaudited)

<TABLE>

                                                                                                                  Cumulative

<CAPTION>
                                                                                                                     From
                                              For the                          For the                          October 8, 1992
                                          Three Months Ended                 Six Months Ended                   (Inception) to
                                             September 30                    September 30                        September 30,

                                                1998            1997        1998             1997                   1998

<S>                                        <C>              <C>             <C>              <C>                    <C>    
Revenues                                              $ -             $ -              $ -               $ -                  $ -
Costs and Expenses:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
  General and Administrative Expenses             474,082          33,256          657,491           170,534            3,242,039
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
  Research and Development                        294,491         170,832          558,193           700,674            6,277,294
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
  Depreciation and Amortization                    52,149          88,761          104,178           105,491              880,870
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
  Interest Expense - Parent                             -               -                -            34,530               95,790
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
  Management Fees - Parent                              -               -                -           409,838            2,089,838
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
  Interest Expense                                      -               -                -                 -              119,300
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Total Costs and Expenses                          820,722         292,849        1,319,862         1,421,067           12,705,131
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Loss from Operations                             (820,722)       (292,849)      (1,319,862)       (1,421,067)         (12,705,131)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Other Income/(Expense)                             19,133               -           23,796                 -             (264,534)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------===============--==============--===============--================-====================--
Net Loss                                        $(801,589)     $ (292,849)     $(1,296,066)      $(1,421,067)       $ (12,969,665)
-------------------------------------------===============--==============--===============--================-====================--
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Earnings per Common Share:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
  Weighted Average Common Shares
------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------===============--==============--===============--================-----------------------
    Outstanding                                11,697,597       7,297,206       11,223,632         6,707,502
-------------------------------------------===============--==============--===============--================-----------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------===============--==============--===============--================-----------------------
Net Loss Per Common Share                         $ (0.07)        $ (0.04)         $ (0.12)          $ (0.21)
-------------------------------------------===============--==============--===============--================-----------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Earnings per Common Share, Assuming
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
  Dilution:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
    Weighted Average Common Shares
------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------===============--==============--===============--================-----------------------
      Outstanding                              15,225,506       7,297,206       14,389,151         6,707,502
-------------------------------------------===============--==============--===============--================-----------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Net Loss Per Common Share, Assuming
------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------===============--==============--===============--================-----------------------
  Dilution                                        $ (0.05)        $ (0.04)         $ (0.09)          $ (0.21)
-------------------------------------------===============--==============--===============--================-----------------------
</TABLE>


    The accompanying notes are an integral part of the financial statements.
                                        3
<PAGE>
<TABLE>
<CAPTION>

                          LIFEPOINT, INC.
                 (A DEVELOPMENT STAGE ENTERPRISE)
                     STATEMENTS OF CASH FLOWS
                            (Unaudited)

                                                                                                        Cumulative
                                                                                                        From
                                                                                                        October 8, 1992
                                                             For the Six Months Ended                  (Inception) to
                                                                   September 30                         September 30,
                                                             1998                1997                   1998

<S>                                                         <C>                 <C>                     <C>    


Cash Flow from Operating Activities:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Net Loss                                              $ (1,296,066)       $ (1,421,067)           $ (12,969,665)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Adjustments to Reconcile Net Loss to Net Cash
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Used by Operating Activities:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
        Depreciation and Amortization                            104,178             105,491                  880,870
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
        Consulting Expense                                       137,930                   -                  137,930
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
        Disposal of Property and Equipment                             -                   -                  237,976
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
        Unrealized Loss on Marketable Securities                       -                   -                  627,512
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
        Amortization of Bond Discount                                  -                   -                   (4,855)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Changes in Operating Assets and Liabilities:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      (Increase) Decrease in Prepaid Expenses and
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
        Other Current Assets                                      48,650                   -                  (67,099)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      (Increase) Decrease in Other Assets                         (9,792)              4,993                  (14,128)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Decrease in Bank Overdraft                                       -            (119,514)                       -
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Increase (Decrease) in Accounts Payable                     60,480            (159,126)                 234,416
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Increase (Decrease) in Accrued Expenses                      5,980             168,122                   88,856
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Net Cash Used by Operating Activities                           (948,640)         (1,421,101)             (10,848,187)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Cash Flow From Investing Activities:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Sale of Marketable Securities                                    -                   -                3,285,625
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Purchases of Marketable Securities                               -                   -               (3,908,281)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Purchases of Property and Equipment                         (6,197)            (19,065)                (602,974)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Proceeds from Sale of Property and Equipment, Net                -                   -                   80,828
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Patent Costs                                                (5,170)             (1,402)                 (44,409)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Net Cash Used by Investing Activities                            (11,367)            (20,467)              (1,189,211)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Cash Flow from Financing Activities:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Sales of Common Stock                                    1,025,000                   -               11,246,226
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Expenses of Stock Offering                                  (5,736)                  -               (1,681,586)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Payment of Loan to Parent                                        -                   -               (1,917,057)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Proceeds of Loan by Parent                                       -                   -                1,634,762
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Proceeds of Loan Payable - Parent                                -           1,464,811                4,715,067
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Payment of Loan Payable - Parent                                 -                   -               (1,299,782)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Proceeds of Capital Leases                                       -                   -                  101,572
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Payments of Capital Leases                                       -                   -                 (105,293)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Proceeds of Brokerage Loan Payable                               -                   -                2,674,683
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Payments of Brokerage Loan Payable                               -                   -               (2,674,683)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities                      1,019,264           1,464,811               12,693,909
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------


</TABLE>

    The accompanying notes are an integral part of the financial statements.
                                        4

<PAGE>
<TABLE>
<CAPTION>


                          LIFEPOINT, INC.
                 (A DEVELOPMENT STAGE ENTERPRISE)
                     STATEMENTS OF CASH FLOWS

                            (Continued)

                                                                                                                   Cumulative
                                                                                                                      From
                                                                                                                 October 8, 1992
                                                                           For the Six Months Ended               (Inception) to
                                                                                September 30                      September 30,
                                                                           1998                1997                   1998
<S>                                                                 <C>                  <C>                  <C>    

Increase (Decrease) in Cash and Cash Equivalents                                59,257              23,243                  656,511
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents - Beginning of Period                                597,254                   -                        -
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------===================--==================---======================
Cash and Cash Equivalents - End of Period                                    $ 656,511            $ 23,243                $ 656,511
--------------------------------------------------------------------===================--==================---======================
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Supplemental Disclosure of Cash Information:
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------===================--==================---======================
      Cash Paid for Interest                                                       $ -                 $ -                $ 192,046
--------------------------------------------------------------------===================--==================---======================
------------------------------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Noncash Operating Activities:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Value of Common Stock Issued (Returned) and
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------===================--==================---======================
        Additional Paid-in Capital for Consulting Services                     (12,660)                  -                  137,340
--------------------------------------------------------------------===================--==================---======================
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Noncash Investing Activities:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Value of Assets Transferred to Lessor in Lieu of
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------===================--==================---======================
        Payment on Capital Leases                                                    -                   -                   71,405
--------------------------------------------------------------------===================--==================---======================
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Noncash Financing Activities:
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Value of Common Stock Issued and Additional
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
        Paid-in Capital for the Tranfer of Assets from
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------===================--==================---======================
        Parent                                                                       -             344,000                  781,060
--------------------------------------------------------------------===================--==================---======================
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Value of Common Stock Issued to Parent and
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
        Additional Paid-in Capital for the Forgiveness of
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------===================--==================---======================
        Debt                                                                         -           3,082,996                3,160,502
--------------------------------------------------------------------===================--==================---======================
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
      Value of Warrants to be Issued for Consulting
------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------===================--==================---======================
        Services                                                               467,660                   -                  467,660
--------------------------------------------------------------------===================--==================---======================
</TABLE>

    The accompanying notes are an integral part of the financial statements.
                                        5


<PAGE>


                                 LIFEPOINT, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998
                                   (Unaudited)


NOTE 1  - Basis of Presentation

         In the opinion of LifePoint,  Inc. (the  "Company"),  the  accompanying
unaudited  financial  statements  reflect all  adjustments  (which  include only
normal  recurring  adjustments  except as disclosed  below) necessary to present
fairly the  financial  position,  results of  operations  and cash flows for the
periods presented. Results of operations for interim periods are not necessarily
indicative of the results of operations for a full year due to external  factors
which are  beyond the  control of the  Company.  This  Report  should be read in
conjunction  with the  Company's  Annual Report on Form 10-K for the fiscal year
ended March 31, 1998 (the "Annual Report").
         In February  1997,  the  Financial  Accounting  Standards  Board issued
Statement  No. 128,  Earnings per Share (FASB No. 128),  which is effective  for
annual and interim periods ending after December 15, 1997. FASB No. 128 replaced
the previously  required primary and fully diluted earnings per share (EPS) with
basic and diluted EPS.  Unlike  primary  earnings per share,  basic earnings per
share  excludes  any  dilutive  effects of  options,  warrants  and  convertible
securities.  Diluted  earnings  per  share  is very  similar  to the  previously
required  fully diluted  earnings per share.  All earnings per share amounts for
all periods have been  presented and,  where  necessary,  restated to conform to
FASB No. 128. There were no adjustments necessary to net loss in calculating the
income  available to common  stockholders  after  assumed  conversions  of stock
options and warrants that are considered to be dilutive.  The adjusted  weighted
average  shares to give effect for the  assumed  conversion  of  dilutive  stock
options and warrants is presented on the Statements of Operations.

NOTE 2. - Continuing Operations and Liquidity

         The Company has historically incurred recurring operating losses due to
the fact that it is still a development stage enterprise  incurring research and
development  expenses and deriving no revenues  and has  experienced  an ongoing
deficiency in working capital.  The Company  financed its operations  during the
quarter ended June 30, 1998 from the remainder of the net proceeds of $1,434,000
realized  from a private  placement in November and  December  1997  pursuant to
Regulation  D under the  Securities  Act of 1993,  as amended  (the  "Securities
Act"),  which sold  3,200,000  shares of the Company's  Common Stock,  $.001 par
value (the "Common Stock"), at $0.50 per share or an aggregate purchase price of
$1,600,000.  Recognizing  that such  financing  would  only  furnish  sufficient
working  capital  through  July 1998,  the Company  initiated  a second  private
placement in July 1998 pursuant to Regulation D under the Securities Act, with a
minimum of  1,000,000  shares and a maximum  of  5,000,000  shares of the Common
Stock at $1.00 per share.  The Company closed on the minimum of 1,000,000 shares
on July 17, 1998, and on August 26, 1998, the Company sold an additional  25,000
shares of the Common  Stock,  or an aggregate of 1,025,000  shares of the Common
Stock offered pursuant to the private placement. The

                                        6
<PAGE>

                                 LIFEPOINT, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998
                                   (Unaudited)
                                   (Continued)

NOTE 2. - Continuing Operations and Liquidity (Continued)

offering  of a minimum of  1,000,000  and a maximum of  5,000,000  shares of the
Common  Stock  expired by its terms on October 14, 1998  without any  additional
shares being sold.
           The Company will require additional capital to continue the research,
development and ultimate  manufacture and marketing of its product.  The Company
now estimates it will cost approximately $5,000,000 to complete the prototype of
its first product and an  additional  $8,000,000 to bring the product to market.
As a result of its  continuing  operational  losses and its  continuing  capital
requirements  at March 31, 1998,  there was raised  substantial  doubt about the
Company's  ability to continue as a going concern.  The financial  statements in
this Report do not  include  any  adjustments  to reflect  the  possible  future
effects,  if any,  on the  recoverability  and  classification  of assets on the
amounts and  classification  of liabilities  that may result from the outcome of
this uncertainty.
          The Company continues to pursue parallel paths in addition to 
initiating another private  placement to secure  funding;  strategic partnering,
venture  capital investors and a possible public offering.  There can be no
assurance that any of these additional  sources of financing will be available 
and, in such event, the Company will not be able to complete its  research and  
development  on a timely basis.

NOTE 3  - Property and Equipment

           Property and equipment is summarized as follows:
                                                September 30,        March 31,
                                                    1998               1998
                                               ----------------     ------------
           Furniture and Fixtures                    $293,699          $287,502
           Test Equipment                             425,768           425,768
           Leasehold Improvements                     209,155           209,155
                                               ----   -------     ----  -------
                                                      928,622           922,425
           Less:  Accumulated Depreciation            739,224           636,237
                                               ----   -------     ----  -------
                                                     $189,398          $286,188
                                                     ========          ========

                                        7

<PAGE>


                                 LIFEPOINT, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998
                                   (Unaudited)
                                   (Continued)


     NOTE 4 - Commitments and  Contingencies 
          In June 1995,  the License  Agreement  with the Department of the Navy
then held by Substance  Abuse  Technologies,  Inc.  ("SAT"),  the Company's then
parent,  was renegotiated and amended to provide for minimum annual royalties of
$100,000 per year commencing October 1, 1995 and terminating September 30, 2005.
Additional  royalties  will be paid  pursuant to a schedule  based upon sales of
products.  Through March 31, 1997, the Company  sub-licensed this Agreement from
its then parent and,  accordingly,  had  obligations  to its then parent for the
royalty payments required by the License Agreement. This license was transferred
from SAT to the Company  effective with the sale of SAT's majority  ownership of
the Common Stock on October 29, 1997. The Navy settled all past  liabilities for
the transferred license for $10,000. 
          On March 3,  1998,  the  license  from  the  Navy was  expanded  to an
exclusive,  worldwide  license  for all  saliva  diagnostics.  The  terms of the
license expansion are currently being negotiated.

NOTE 5 - Stockholders' Equity

          During the quarter  ended June 30, 1998,  the Company  issued  300,000
shares of stock to a consultant in exchange for services to be rendered  through
January 2000. The excess of the value of the services of $149,700 over the stock
value was recorded as an increase to additional paid-in capital.  The obligation
to issue these shares was provided  for at March 31, 1998.  By mutual  agreement
this contract was terminated on September 10, 1998, and 145,000  unearned shares
were  returned  to  the  Company.Additionally,   all  stock  options  were  also
cancelled.
          During the quarter  ended  September  30,  1998,  the  Company  issued
100,000 shares of stock to a consultant in lieu of cash,  for internet  investor
relations work to be performed over the following six months. During the quarter
ended  September 30, 1998, the Company issued  warrants to three outside parties
to purchase an aggregate of 600,000 shares of the Common Stock at prices ranging
from  $0.50 to $2.16  per  share  as  payment  for  consulting  services.  As of
September 30, 1998, there were warrants outstanding to purchase 2,621,289 shares
of the Common Stock.
         The LifePoint,  Inc. 1997 Stock Option Plan (the "Plan"), as adopted by
the Board of  Directors of the Company on August 14, 1997 and amended on June 5,
1998,  now  provides  for the  granting of options to purchase an  aggregate  of
2,000,000   shares   (originally   1,000,000   shares)  of  the  Common   Stock.
Stockholders'  approval  of the Plan is being  sought at the  Annual  Meeting of
Stockholders  on August 13, 1998.  Options  granted under the Plan may either be
incentive stock options  designed to meet the requirements of Section 422 of the
Internal Revenue

                                        8
<PAGE>


                                 LIFEPOINT, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998
                                   (Unaudited)
                                   (Continued)

NOTE 5 - Stockholders' Equity (Continued)
Code of 1986, as amended,  or non-statutory  or non-qualified  stock options not
intended  to  satisfy  such  requirements.  The  exercise  price  per  share for
incentive  stock options will not be less than 100% of the fair market value per
share of the Common Stock on the grant date. For  non-statutory or non-qualified
stock  options,  the  exercise  price per share may not be less than 85% of such
fair market value. No option may have a term in excess of ten years.
         During the quarter  ended  September 30, 1998, no options were granted
pursuant to the Plan. As of September 30, 1998, there were 1,100,000 shares held
by a total of 12 employees pursuant to the Plan.


                                        9
<PAGE>


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

General.

         The Company was  incorporated  on October 8, 1992 under the laws of the
State of Delaware as a wholly-owned  subsidiary of Substance Abuse Technologies,
Inc.  ("SAT").  Effective January 1, 1993, SAT sublicensed or transferred to the
Company  certain  rights or assets to develop drug testing  products in exchange
for  3,500,000  shares of the Common Stock.  In October 1993,  the Company had a
public  offering of the Common Stock in which an  aggregate of 1,721,900  shares
was sold. As of September  30, 1997,  SAT owned  5,575,306  shares of the Common
Stock or 76.4% of the  7,297,206  shares of the Common  Stock then  outstanding.
From its inception  until October 31, 1997,  the Company was a subsidiary of SAT
or otherwise under its control.  SAT ceased providing advances to the Company in
August  1997 as a  result  of its  inability  to  secure  financing  for its own
programs.  On September 10, 1997,  SAT filed a petition  under Chapter 11 of the
Federal  Bankruptcy  Code.  The  Company   temporarily   suspended  its  product
development  activities on September 19, 1997, but did not file for  bankruptcy.
The Company was able to resume such  activities  on October 27, 1997 as a result
of a loan by an unaffiliated  party. On October 29, 1997, the majority ownership
of the  Company  was  transferred  from SAT to Meadow Lane  Partners,  LLC.  The
Company is now completely independent from SAT.

         The   Company  is  a   development   stage   company   focused  on  the
commercialization  of the flow immunosensor  technology  licensed from the Naval
Research Laboratories. The flow immunosensor technology, in combination with the
focus on the use of saliva as a non-invasive test medium, will allow the Company
to develop a broadly  applicable  non-invasive,  rapid,  on-site diagnostic test
system.  The first  product under  development  is for the detection of drugs of
abuse and alcohol.  However,  other major  market  opportunities  include  rapid
diagnostic  testing  (substances  of abuse,  drug  overdose,  and heart attack),
long-term  therapeutic  drug  monitoring  to determine  efficacy and  compliance
(cardiovascular   disease,   osteoporosis),    and   wellness/health   screening
(cardiovascular disease, osteoporosis, cancer).

Liquidity and Capital Resources.

         Until  August  1997 when SAT's  inability  to secure its own  financing
caused SAT to cease  advances  to the  Company,  SAT had been the sole source of
financing to the Company since the Company's public offering of 1,721,900 shares
of the Common  Stock in October  and  November  1993,  which  netted the Company
approximately  $7,099,000.  During the  fiscal  year  ended  March 31,  1997 and
through  July  1997,  SAT  advanced  $3,426,994  to  the  Company  to  fund  its
operations,  all of which  was  subsequently  reflected  as  additional  capital
contributions from SAT.

         As a result of two loans made to the Company in  September  and October
1997  totaling   $310,000   ($10,000  from  an  officer  and  $300,000  from  an
unaffiliated source), both loans secured by a lien on the assets of the Company,
the Company  recommenced its product development on October 27, 1997. During the
third  quarter of 1997,  the  Company  repaid  the loans  from the net  proceeds
($1,434,000)  of  a  private  placement  pursuant  to  Regulation  D  under  the
Securities  Act,  which sold  3,200,000  shares of the Common Stock at $0.50 per
share or an aggregate purchase price of $1,600,000.

            The  Company's  management  at the  time  of the  private  placement
estimated  that the net  proceeds  from the private  placement  would enable the
Company to continue its  operations,  at the reduced  level,  through July 1998.
Management has been actively pursuing during 1998, on a parallel basis,  venture
capital, strategic partnering, and/or a private placement for all or part of the
required funding.

         However,  because management recognized that it may have beyond July to
implement  one of  these  long  term  financing  possibilities,  in  July  1998,
management  implemented  a private  placement of  $1,000,000 to $5,000,000 in an
effort to enable the Company to continue its operations,  including research and
development  of its  product,  until one of these long term  financing  programs
could  be  successfully  implemented.   The  Company  received  the  minimum  of
$1,000,000  on July 16,  1998,  and, on August 26,  1998,  the  Company  sold an
additional  25,000  shares of the Common  Stock,  or an  aggregate  of 1,025,000
shares of the Common Stock offered pursuant to this second private placement. 
                                        10
<PAGE>

The offering of a minimum of 1,000,000 and a maximum of 5,000,000  shares of the
Common Stock expired by its terms on October 14, 1998  without any  additional  
shares being sold.

          The latest  estimate of the Company's  management is that, to complete
the development of a saliva- based drugs of abuse and alcohol  testing  product,
it will require additional funding of $13,000,000, of which $5,000,000 is needed
to develop the  prototype,  and that the product is not  expected to be launched
until late in the second  quarter of 2000.  Such estimates as to amount and date
are  based on the  assumption  that at least  $3,000,000  in  financing  will be
obtained in the next few months.

         The Company has engaged the services of The Kriegsman Group, founded by
Steven  Kriegsman,  a Los  Angeles-based  investment banker focused on obtaining
private financing for young medical,  biotech, and pharmaceutical companies. The
Kriegsman  Group has been  focusing  on  implementing  a private  placement  for
$7,000,000 to  $10,000,00 in equity from  individuals  or  institutions  for the
Company.  Ambient  Capital  Group,  Inc.,  also a Los  Angeles-based  investment
banker, will act as co-agent with The Kriegsman Group in such an offering.

         The Company's  management  has also been  exploring the  possibility of
obtaining a strategic  partner for the Company.  To this end, the Company has an
agreement with Burrill & Company  ("Burrill"),  a San  Francisco-based  merchant
bank focused  exclusively on servicing life science  companies.  Burrill assists
its portfolio  companies in maximizing  their value  through  various  strategic
partnering relationships. Burrill & Company was founded by G. Steven Burrill, an
internationally  recognized financial,  business,  and management advisor to the
life science  industry.  Mr.  Burrill is founder of The Biotech  Meeting and the
International Life Sciences Partnering Conference, both held annually. A team of
twelve  professionals is augmented by a world class Business Advisory Board. The
Board is comprised of eight members including: Jack Bowman, former Company Group
chairman of Johnson & Johnson;  Irwin Lerner,  retired  Chairman of the Board of
Hoffmann-La Roche Inc.;  Herbert Conrad,  former President of the Pharmaceutical
Division and senior Vice  President of  Hoffmann-La  Roche Inc.;  Paul  Freiman,
former  Chairman  and Chief  Executive  Officer  of Syntex  Corporation;  Martin
Gerstel, former chairman and Chief Executive Officer of ALZA Corporation;  Leigh
Thompson,  former Scientific Officer of Eli Lilly and Company.  Burrill had been
engaged to introduce  LifePoint to potential  partners with an on-going interest
in  saliva-based  diagnostics or  point-of-care  diagnostics  and which might be
otherwise  interested  in  partnering  with or  acquiring  LifePoint at an early
stage.

         Management  is also  pursuing  the  possibility  of a  venture  capital
investment; however, most venture capital investors prefer a private company for
their  investment,  and look to an  Initial  Public  Offering  ("IPO")  as their
preferred  exit  strategy.  Although  management  continues to work with several
interested  venture capital firms,  this potential route of funding is currently
not the most likely to occur.

         Management has also pursued the possibility of an  underwritten  public
offering and has received  expressions of interest from several well-known small
national  and  large  regional  firms.  This  option  has  been  put on  hold by
management  due to the  length  of time  required  to  close  such  transaction;
however,  it remains an alternative to be pursued  following a private financing
for capital requirements.

Results of Operations

Three Months Ended September 30, 1998 vs. September 30, 1997

          During the  quarter  ended  September  30,  1998,  the  Company  spent
$294,491 on research and development  and an additional  $474,082 on general and
administrative  expenses,  as compared with $170,832 and $33,256,  respectively,
during the three  months  ended  September  30,  1997.  The higher  research and
development and general and administrative  expenditures in the 1998 period were
due to the fact that  during the same  period in  September  1997,  the  Company
ceased  the  product  development   program,   and  had  significantly   reduced
expenditures   for  that   period  of  time.   Additionally,   the  general  and
administrative  expenses for the three months ended September 30, 1998, included
corporate  legal  expenses  that were  higher  than  usual  due to timing  and a
significant royalty payment to the Navy.

                                        11
<PAGE>


         From  inception on October 8, 1992 to September  30, 1998,  the Company
has spent  $6,277,294 on research and  development and $3,242,039 on general and
administrative  expenses.  Management  fees  paid to SAT  aggregated  $2,089,838
during such period.

Six Months Ended September 30, 1998 vs. September 30, 1997

         During the six months  ended  September  30,  1998,  the Company  spent
$558,193 on research and development  and an additional  $657,491 on general and
administrative  expenses, as compared with $700,674 and $170,534,  respectively,
during the six months ended  September 30, 1997. The general and  administrative
expenses for the six months ended  September 20, 1998 are higher because, during
the same period in 1997,  significant  general and administrative  expenses were
paid to SAT as a management fee, and these expenses are now incurred directly by
the Company.  During the six months ended  September  30,  1997,  an  additional
$409,838 was paid to SAT as the management fee.  The research and development 
expenses for the six months ended September 30, 1998 were higher than the same
period during 1997 due to the fact that during the same period in September 1997
the Company ceased the product development program.

Forward-Looking Statements

         This  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations contains forward-looking statements which involve risk and
uncertainties.  Such  forward-looking  statements reflect  management's  current
views that the necessary  financing will be available,  when needed, to complete
the research and development program,  that the product will be developed at the
contemplated cost and within the projected  timetable,  that, during the interim
period before the Company begins marketing, competitors will not begin to market
a competitive saliva-based testing product and that the other risks described in
the Annual  Report and other  filings by the  Company  with the  Securities  and
Exchange   Commission  will  not  materially   adversely  affect  the  Company's
operations.  Because there can be no assurance  that  management's  expectations
will be realized, actual results may differ.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

         Not applicable.



                                        12
<PAGE>


                                     PART II
                                OTHER INFORMATION


Item 2.  Changes in Securities

(a)      Not applicable.

(b)      Not applicable.

(c)      Recent Sales of Unregistered Securities

(i) On July 23, 1998, the Company  closed as to the sale of 1,000,000  shares of
the Common Stock and, on August 26, 1998, the Company sold an additional  25,000
shares of the Common  Stock,  or an aggregate of 1,025,000  shares of the Common
Stock  offered  pursuant to a private  placement.  The  offering of a minimum of
1,000,000  and a maximum of 5,000,000  shares of the Common Stock expired by its
terms on October 14, 1998 without any additional shares being sold.

                  (ii) There were no  underwriters  for this private  placement.
The  shares of the  Common  Stock  were  offered  and sold to  persons  who were
accredited investors as such term is defined in Rule 501(a) under the Securities
Act of 1933, as amended (the "Securities Act").

                  (iii) The shares of the  Common  Stock were sold for $1.00 per
share or an aggregate  purchase price of $1,025,000.  There were no underwriting
discounts or commissions related to the private placement.

                  (iv) The  Company  claims  that the sales were exempt from the
registration  requirements  of the  Securities  Act  pursuant  to  Section  4(2)
thereunder  and Rule 506 of Regulation D thereunder,  the sales  constituting  a
transaction by an issuer not involving any public offering.  The purchasers were
all   accredited   investors,   each  of  whom  or  which  gave  an   investment
representation.

(d)      Not applicable.

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

(a)      The Annual Meeting of Stockholders was held on August 13, 1998.

         (b) At the  Meeting,  Peter S. Gold,  Linda H.  Masterson,  Jonathan J.
Pallin, and Paul Sandler were re-elected as the sole directors of the Company.

         (c) At the meeting, votes were taken as to three proposals as follows:

(1)      On the proposal to elect four directors:
                                                                       Broker
Nominee                    For                       Withheld          Non-Votes

Peter S. Gold              9,233,686                  6,900            1,200,081
Linda H. Masterson         9,233,686                  6,900            1,200,081
Jonathan J. Pallin         9,233,686                  6,900            1,200,081
Paul Sandler               9,233,686                  6,900            1,200,081


                                        13
<PAGE>

                  (2) On the  proposal  to  ratify  the  appointment  of Ernst &
Young, LLC as independent auditors for the fiscal year ending March 31, 1999:


                                                                       Broker
For                        Against                   Withheld          Non-Votes

9,158,186                  67,000                    15,400            1,200,081

                  (3)  On the proposal to adopt the LifePoint, Inc. 1997 Stock 
Option Plan and to ratify the prior grants of options thereunder:
                                                                       Broker
For                        Against                   Withheld          Non-Votes

9,115,261                  104,925                   20,400            1,200,081


         (d)      Not Applicable.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

              None

(b)      Reports on Form 8-K

              There  were no Reports on Form 8-K filed  during the  quarter  for
which this Report is filed.



                                   SIGNATURES

         Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned therein to be duly authorized.

                                 LIFEPOINT, INC.
                                (Registrant)


Date: November 13, 1998            By   /s/ Linda H. Masterson                  
                                   ---------------------------------------------
                                   Linda H. Masterson
                                   President and Chief Executive Officer

                                        14