SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                  ------------

                                    FORM 10-K
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended September 30, 1999

                                       OR

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

                          Commission File No. 000-23531

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


             DELAWARE                              93-0820945
  (State or other jurisdiction)                   (I.R.S. Employer
   incorporation or organization)                  Identification No.)

                     16160 SW Upper Boones Ferry Road
             Portland, Oregon                        97224-7744
   (Address of principal executive offices)          (Zip Code)

                                 (503) 670-7702
              (Registrant's telephone number, including area code)


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

           Securities registered pursuant to Section 12(g) of the Act:
    Common Stock (including preferred stock purchase rights), $.01 par value
                                (Title of Class)

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

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

      The aggregate market value of the registrant's common stock held by
  non-affiliates of the registrant, as of November 30, 1999, was approximately
                                  $3,750,000.

  The number of shares outstanding of the registrant's common stock, par value
              $.01 per share, on November 30, 1999 was 4,070,612.

                       DOCUMENTS INCORPORATED BY REFERENCE

    Parts of registrant's Proxy Statement dated January 17, 2000 prepared in
 connection with the Annual Meeting of Stockholders to be held on February 29,
        2000 are incorporated by reference into Part III of this Report.


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                                        T A B L E  O F  C O N T E N T S


                                                  PART I
    <S>                                                                                        <C>
     ITEM 1. BUSINESS.....................................................................      3

     ITEM 2. PROPERTIES...................................................................     12

     ITEM 3. LEGAL PROCEEDINGS............................................................     13

     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..........................     13

                                                  PART II

     ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
                   STOCKHOLDER MATTERS....................................................     13

     ITEM 6. SELECTED FINANCIAL DATA......................................................     14

     ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS....................................     15

     ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                   ABOUT MARKET RISK......................................................     19

     ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..................................     19

     ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                   ON ACCOUNTING AND FINANCIAL DISCLOSURE.................................     19

                                                  PART III

     ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..........................     20

     ITEM 11. EXECUTIVE COMPENSATION......................................................     20

     ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                   OWNERS AND MANAGEMENT..................................................     20

     ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............................     20

                                                  PART IV

     ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
                   REPORTS ON FORM 8-K....................................................     20


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                                     PART I

     CERTAIN   STATEMENTS  IN  THIS  REPORT   CONSTITUTE   "FORWARD-LOOKING
     STATEMENTS"  WITHIN THE MEANING OF THE PRIVATE  SECURITIES  LITIGATION
     REFORM  ACT OF  1995.  STATEMENTS  THAT  EXPRESSLY  OR BY  IMPLICATION
     PREDICT FUTURE RESULTS, PERFORMANCE OR EVENTS ARE FORWARD-LOOKING. THE
     WORDS "BELIEVES,"  "INTENDS," "EXPECTS,"  "ANTICIPATES,"  "ESTIMATES,"
     AND SIMILAR EXPRESSIONS ALSO IDENTIFY FORWARD LOOKING-STATEMENTS.  THE
     FORWARD-LOOKING   STATEMENTS   INVOLVE   KNOWN  AND   UNKNOWN   RISKS,
     UNCERTAINTIES  AND OTHER  FACTORS  THAT MAY CAUSE THE ACTUAL  RESULTS,
     PERFORMANCE OR ACHIEVEMENTS  OF THE COMPANY OR INDUSTRY  RESULTS TO BE
     MATERIALLY   DIFFERENT  FROM  ANY  FUTURE   RESULTS,   PERFORMANCE  OR
     ACHIEVEMENTS  EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING  STATEMENTS.
     WITH  RESPECT  TO THE  COMPANY,  THESE  FACTORS  INCLUDE  ITS  LIMITED
     INDEPENDENT OPERATING HISTORY; UNCERTAINTY OF ADDITIONAL FUNDING; LOSS
     OR IMPAIRMENT OF SOURCES OF CAPITAL; DEPENDENCE ON STRATEGIC PARTNERS;
     UNCERTAINTIES   RELATING  TO  PATENTS  AND  PROPRIETARY   INFORMATION;
     DEPENDENCE ON KEY  PERSONNEL;  TECHNOLOGICAL  CHANGE AND  COMPETITION;
     UNCERTAINTIES  AS TO CONSUMER  ACCEPTANCE  OF  GENETICALLY  ENGINEERED
     PRODUCTS; CHANGES IN LAWS OR REGULATIONS; AS WELL AS THE OTHER FACTORS
     DISCUSSED  IN  EXHIBIT  99  HERETO  WHICH IS  HEREBY  INCORPORATED  BY
     REFERENCE.  GIVEN THESE  UNCERTAINTIES,  READERS ARE  CAUTIONED NOT TO
     PLACE UNDUE RELIANCE ON THE FORWARD-LOOKING STATEMENTS.  AGRITOPE DOES
     NOT INTEND TO UPDATE ANY FORWARD-LOOKING STATEMENTS.



ITEM 1.  BUSINESS

Agritope, Inc. ("Agritope" or the "Company") is an Oregon-based agricultural
biotechnology company that develops improved plant products and provides
technology to the agricultural industry. Agrinomics LLC, its joint venture with
Aventis CropScience, S.A. ("Aventis CropScience"), conducts a gene discovery
program, which is directed at finding and determining the function of plant
genes. Aventis CropScience was formed in December 1999, combining the businesses
formerly known as Rhone-Poulenc Agro and AgrEvo. The technology developed or
acquired by the Company includes a variety of genes, promoters and enabling
technologies.

Agritope utilizes its patented ethylene control technology to develop a wide
variety of fruits and vegetables that are resistant to the decaying effects of
ethylene. The Company has also acquired certain rights to certain proprietary
genes (the "Salk Genes") from the Salk Institute for Biological Studies (the
"Salk Institute"). Agritope believes that the Salk Genes may have the potential
to confer disease resistance, enhance crop yield, control flowering, regulate
cell division and enhance gene expression in plants. Agritope has an option to
obtain a worldwide license to use the Salk Genes in a wide range of fruit and
vegetable species.

The Company consists of two segments: Agritope Research and Development, as
described above, and a majority-owned subsidiary, Vinifera, Inc. ("Vinifera").
See Note 11 of Notes to Consolidated Financial Statements for selected financial
information regarding both segments. Vinifera propagates and markets grapevines
to the U.S. premium wine grape production industry. Agritope believes that
Vinifera offers one of the most technically advanced grapevine plant propagation
and disease screening and elimination programs available to the grape production
industry.

B I O T E C H N O L O G Y   P R O G R A M

Historically, Agritope's biotechnology program focused on using the tools and
techniques of plant genetic engineering to regulate the synthesis of ethylene in
ripening fruits and vegetables. Ethylene is a gaseous plant hormone, which in
higher plant species is responsible for fruit and vegetable ripening and
senescence as well as numerous other physiological effects. The Company has
identified and patented a single gene that can be inserted into plants and
expressed to regulate the plant's ability to produce ethylene. In recent years,
the Company has expanded its research to genetically regulating other
physiological processes in plants. Agritope is also conducting research in the
area of disease control, including screening plants for the presence of disease
and creating genetically engineered plants with resistance to pathogens.

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<PAGE>

RIPENING CONTROL. The fresh produce industry is based largely upon rapid
harvesting, processing and distribution of fruits and vegetables in order to
prevent spoilage and ensure the arrival of product at retail outlets in
acceptable condition for consumer purchase and use. The post-harvest period for
most fruits and vegetables is one of continuous ripening and senescence (aging),
as evidenced by rapid changes in color, texture, flavor, nutrient content, and
other quality attributes. Product losses during harvesting, processing, packing,
shipping and distribution can reach substantial proportions of overall crop
yield. Growers frequently incur losses resulting from abandoning crops in the
field or having shipments refused by receivers because the produce is overripe.
In addition, wholesalers and retailers may be forced either to discard or sell
overripe produce at reduced prices and consumers often must use produce shortly
after purchase to avoid spoilage. Studies published in the Marketing Research
Report of the U.S. Department of Agriculture ("USDA") have estimated
post-harvest losses of 30% and 40%, respectively, for strawberries shipped from
Florida to the Chicago and New York markets. In the U.S. fruit and vegetable
markets, post-harvest losses are estimated to amount to several billion dollars
annually.

Post-harvest losses are largely attributable to the effects of ethylene. Because
ethylene is a gas, it not only affects the plant producing it, but also
surrounding plants as well. The physiological effects of ethylene include
initiation and enhancement of ripening, senescence, leaf abscission and
drooping, and flower fading and wilting. Common examples include the ripening
and subsequent rotting of tomatoes and apples, discoloration in lettuce and
broccoli, and the short bloom life of cut flowers.

The importance of controlling ethylene production in plants has been recognized
for decades, and has been addressed primarily through the use of controlled
atmosphere storage, chemical treatment, and special packaging. Conventional
techniques for controlling ethylene production have serious disadvantages that
include high cost, time-critical handling requirements and lack of consistent
ripening. For example, the majority of product sold in the fresh tomato market
today is composed of "gas-green" tomatoes. These tomatoes are picked and packed
while still green and firm. Prior to shipping to wholesale customers, green
tomatoes are exposed to ethylene gas in order to initiate ripening of the
product. In general, gas-green tomatoes are perceived by consumers to have less
desirable taste and texture than vine-ripened tomatoes.

Agritope believes the ability to regulate ethylene and control ripening through
genetic engineering represents an opportunity to provide a superior product to
consumers while also improving profitability for growers and distributors.
Growers may achieve higher marketable yields due to fewer losses of overripe
product in the field and may lower labor costs by decreasing frequency of
harvest. For packer/shippers, better control of product marketability may result
in improved inventory flexibility and control, and more uniform product quality.

ETHYLENE CONTROL TECHNOLOGY. Agritope's ethylene control technology is focused
on the use of a patented gene known as SAMase. The expression of SAMase in
plants produces an enzyme that acts to degrade one of the important precursor
compounds (S-adenosylmethionine or "SAM") necessary for the production of
ethylene. Agritope has genetically engineered plants to express the SAMase gene
only when certain levels of rising ethylene concentrations are reached in the
tissues of the fruit or plant. This feature causes the production of greater
levels of the enzyme that degrades SAM in response to a correspondingly higher
level of ethylene. Agritope believes that this technology thus offers a major
advantage over other approaches to ripening control in that the production of
ethylene may be specifically reduced to levels that allow for the initiation of
ripening but that delay the spoiling effects of excess ethylene. Therefore, the
fruit can be maintained at an optimal level of ripeness for an extended period
of time. An additional benefit of Agritope's technology is that the reaction
catalyzed by the SAMase gene produces compounds normally found in plants.
Agritope believes its SAMase technology can be utilized for the control of
ethylene in any plant species where ethylene affects ripening or senescence.

Agritope's application of ethylene control technology to various fruit and
vegetable crops is at different stages, as described below. There are difficult
scientific objectives to be achieved with respect to application of the
technology to certain crops before the technical or commercial feasibility of
the modified crops can be

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demonstrated. There can be no assurance that the technology can be successfully
applied to particular crops or that the modified crops can be successfully and
profitably produced, distributed and sold.

In 1999, Agritope licensed its ethylene control technology to Ball Horticultural
Company ("Ball"), a global leader in the development, production and marketing
of floricultural crops. Under the terms of the license, Ball was granted a
license to utilize Agritope's proprietary ethylene control technology, including
rights to genes and gene promoters, to develop and produce novel floricultural
crops. In return, Agritope will receive royalties on the sale of products and
derivatives that incorporate the licensed technology.

A U.S. patent covering the use of any gene that encodes S-adenosylmethionine
hydrolase (the enzyme expressed in any plant species by the SAMase gene)
protects Agritope's ripening control technology. In addition to the patent on
the SAMase gene, utility claims have been allowed on the promoter/gene
combination used by Agritope in applications currently under development as well
as potential applications in all other fruit-bearing plants. In the area of
regulated gene expression and ripening control, Agritope has seven additional
U.S. patents issued and two U.S. patents allowed but not yet issued. Agritope
also has three pending U.S. patents in this area. Agritope also holds five
foreign patents as well as 26 pending foreign applications, also primarily
related to ripening control technology.

THE SALK GENES. In 1997, Agritope acquired certain rights to certain proprietary
genes discovered by scientists at the Salk Institute. The Company believes that
the Salk Genes may have the potential to confer disease resistance, enhance
yield, control flowering, regulate cell division and enhance gene expression in
plants. Agritope believes these new technologies will allow Agritope to leverage
its ability to genetically engineer fruits and vegetables and enhance its
ability to broaden its pipeline of new genetically engineered products. U.S. and
foreign patent filings have been made with respect to each of the Salk Genes. A
U.S. patent covering one gene, LEAFY, has been issued to the Salk Institute.

Under the terms of the Salk agreement, Agritope has an option to obtain an
exclusive or nonexclusive worldwide license to use the Salk Genes in a wide
range of fruit and vegetable crops. The agreement permits Agritope to use each
Salk Gene for research and evaluation purposes, for which Agritope will pay an
annual access fee until it elects to license the gene for commercial purposes.
Agritope will pay a license issue fee and royalty for each Salk Gene it elects
to license. Agritope has also agreed to reimburse a percentage of applicable
Salk Institute patent costs. Salk Institute retains ownership of the Salk Genes,
subject to applicable U.S. government rights. Agritope will own any modified
plant species and fruit and vegetable crops it develops using the Salk Genes,
and will therefore have control of the marketing and distribution rights to such
products.

Agritope's work with the Salk Genes to produce desirable fruit and vegetable
crops is at an early stage. There are difficult scientific objectives to be
achieved before the technological or commercial feasibility of the products can
be demonstrated. There can be no assurance that any of Agritope's products under
development using the Salk Genes, if and when fully developed and tested, will
perform in accordance with Agritope's expectations, that necessary regulatory
approvals will be obtained in a timely manner, if at all, or that these products
can be successfully and profitably produced, distributed and sold.

Agritope is currently conducting research regarding the following specific Salk
Genes:

CDR1 is a gene that may confer systemic acquired resistance ("SAR") to plants.
SAR is the ability of plants to develop a powerful disease resistance state.
After exposure to a non-lethal inoculum of a bacterial, viral or fungal
pathogen, a plant will possess a heightened ability to defend itself against a
broad range of new pathogenic challenges. Scientists at the Salk Institute, in
collaboration with those at the Samuel Roberts Nobel Foundation, have discovered
a gene, CDR1, which appears to play a key role in the maintenance of SAR.
Agritope intends to utilize CDR1 in the development of plant varieties that have
increased disease resistance to a broad range of plant pathogens.

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DET2 is a gene that controls brassinosteroid synthesis in plants.
Brassinosteroids are compounds that are naturally produced in minute quantities
in plants and play a key role in plant growth and development. In addition to
being difficult to extract (due to their small quantity within the plant),
brassinosteroids are also exceedingly difficult to synthesize using organic
synthesis methods. Nevertheless, research has demonstrated that application of
purified brassinosteroids to crop plants can result in enhanced yields.
Scientists at the Salk Institute have identified a key enzymatic step that
limits brassinosteroid synthesis in plants and cloned the gene, DET2, which
encodes the enzyme. Expression of the gene in transgenic plants has produced
plants with enhanced growth properties due to increased synthesis of
brassinosteroid by the transgenic plant.

BRI1 is a gene that encodes the plant receptor for brassinosteroids. The BRI1
gene encodes a receptor-like protein kinase involved in brassinosteroid
signaling and provides further opportunities for biotechnological applications
related to yield increase in transgenic plants. In principle, it is possible to
manipulate both hormone biosynthesis with DET2, as described above, as well as
the level of brassinosteroid receptor through BRI1. In theory, it is possible to
generate BRI1 derivatives that have been activated as if brassinosteroid were
bound to the gene. Both approaches, either separately or together, have the
potential to greatly stimulate plant growth and yield.

CYCLIN is a gene that is involved in regulating cell division. Salk Institute
scientists have expressed the CYCLIN gene in transgenic plants and believe it
may play a role in accelerating plant growth, which is especially noticeable in
the roots. Furthermore, transgenic crop plants containing the CYCLIN gene are
also expected to have enhanced vegetative growth properties.

LEAFY is a gene that is responsible for the initiation of flower development in
plants. Scientists at the Salk Institute have demonstrated accelerated flowering
in several species as a result of LEAFY expression. Transgenic aspen trees
expressing LEAFY develop flowers within months rather than the 8 to 10 years
that a non-transgenic aspen requires. Agritope intends to investigate uses of
the LEAFY gene in tree fruits, vegetables and grapevines. Inhibiting LEAFY
expression in selected crop species may also retard or prevent flowering, which
could be of value in vegetable crops such as lettuce and celery.

BOOSTER ELEMENT ("BE") is a genetic element (a small piece of DNA) that can be
combined with plant gene promoters to enhance gene expression. The BE technology
is applicable to a range of plant genetic engineering strategies, including the
Company's SAMase ripening control technology, and Salk Genes. For example,
certain crops may need a higher level of SAMase expression to produce a specific
level of ripening control. BE may up-regulate the promoters controlling SAMase
expression and thus improve the utility of the SAMase technology.

FUNCTIONAL GENOMICS. In July 1999, Agritope and Aventis CropScience formed
Agrinomics LLC ("Agrinomics") which has begun a research, development and
commercialization program in the field of agricultural functional genomics.
Agritope owns a 50% interest in Agrinomics and Aventis CropScience owns the
remaining 50% interest.

Agrinomics will identify, develop and commercialize novel genes expected to be
discovered under a gene discovery program called the ACTTAG(TM) Gene Discovery
Program. The ACTTAG program utilizes activation tagging, a technique that
enables researchers to rapidly discover genes and the traits they confer.
Agrinomics and its academic collaborators at The Salk Institute of San Diego,
California will generate genetically modified seeds that will be screened by
Agrinomics for a wide variety of traits such as disease resistance, insect
resistance, new morphologies, abiotic stress tolerance, improved flowering
characteristics, herbicide targets, herbicide tolerance and improved nutritional
qualities. Agrinomics has an option to collaborate with scientists at the
University of Edinburgh, Scotland in the ACTTAG program who would also generate
genetically modified seeds for screening in the ACTTAG program, but it has not
yet exercised the option.

Aventis CropScience is expected to make capital contributions to Agrinomics, in
cash, totaling $20 million over a five-year period. A $5 million contribution to
support the first year of operations was made in 1999. Agritope contributed the
ACTTAG technology, a collection of seeds generated using the ACTTAG techniques

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and expertise in molecular and cell biology. In addition, Agritope will perform
research work at its Oregon research facility, greenhouses and farm. Aventis
CropScience will also provide high-throughput screening, robotics, microarray
and bioinformatics technologies and support, and perform research work at its
Research Triangle Park research facility and at other locations.

Agrinomics intends to develop a network of research and commercial alliances
with a broad range of interests including food and beverages, feed grains, fiber
crops and forestry. Alliance participants would provide funding for specific
projects. Participants would receive rights to technology in their field of
interest as well as access to technology developed within the Agrinomics
network.

In December 1999, a joint venture owned by Vilmorin Clause & Cie ("Vilmorin") of
France and Biotech Plant Genomic Fund of Israel, entered into a research
agreement with Agrinomics. Under the terms of the research agreement, the joint
venture will sponsor a $7.5 million five-year research program to discover genes
that confer desirable traits in certain vegetables. Agrinomics will use $2.5
million of the funding to reimburse the joint venture for conducting screening
activities in the program.

ADDITIONAL TECHNOLOGIES. Agritope conducts research on several additional
early-stage technologies. For example, Agritope scientists have devised a
genetic engineering strategy to confer seedlessness to fruit crops. In addition,
Agritope has completed a Phase I Small Business Innovation Research ("SBIR")
grant to develop a novel geminivirus resistance strategy and to incorporate the
approach into commercial tomato varieties. A second Phase I grant to continue
the project is pending. Geminiviruses are a class of plant viruses that cause
widespread damage in several crops including tomato, pepper, beans, melon,
squash and cotton. Agritope has entered into an option agreement with The Ohio
State University to use the geminivirus resistance strategy in a wide range of
crop species susceptible to whitefly transmitted geminiviruses. The Company also
entered into a collaboration agreement in 1999 with a specialist in the field of
synthetic organic chemistry at the University of Calgary, Canada, Dr. Thomas G.
Back, who has discovered a unique technology for the synthesis of novel
brassinosteroids with exceptionally high biological activity. Under terms of the
collaboration, Dr. Back will synthesize compounds in his laboratory and deliver
them to Agritope for evaluation and commercial development.

Agritope also maintains a leading position in promoter discovery, allowing the
targeted expression of introduced genes to certain tissues or to specific
developmental stages in plants. Company scientists have isolated or synthesized
a number of fruit-specific promoters for a wide variety of fruits and
vegetables, including apple, banana, peach, melon, tomato, and raspberry. In
conjunction with work targeted at developing seedless plant varieties, two
different seed-specific plant promoters have been identified and isolated. Other
plant promoters identified include those that will target gene expression in a
root-specific, senescence or wounding-associated manner. These promoters may be
useful for the directed expression of our ethylene control genes as well as the
Salk Genes and others.

E X I S T I N G   D E V E L O P M E N T   P R O G R A M S

Agritope's research and development programs are currently directed toward
several highly perishable fruit and vegetable crops described below.

MELON. The U.S. wholesale fresh melon market was estimated at $1.3 billion for
1998. Perishability in melons results in substantial product losses during the
processes of production, harvesting and distribution. Agritope believes that
melons represent a substantial market opportunity for implementation of its
ripening control technology. Recent scientific reports have demonstrated a
dramatic increase in shelf life for specialty type melons in which the ability
to produce ethylene has been impaired. Using proprietary seed varieties supplied
by two units of Vilmorin, Clause Semences and its U.S. affiliate Harris Moran
Seed Company ("Harris Moran"), Agritope is developing commercial melon varieties
with controlled ripening and increased post-harvest product life. Transgenic
melons containing Agritope's ethylene control gene are currently being evaluated
jointly by Harris Moran and Agritope technicians. Additional field trials will
be conducted in the

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2000 planting season, including trials designed to demonstrate the performance
of the improved varieties in the wholesale distribution channel.

TOMATO. Annual U.S. wholesale fresh market tomato revenues were estimated at
$1.1 billion for 1998. In order to facilitate the commercialization of its
ethylene control technology for this market, Agritope formed Superior Tomato
Associates, L.L.C. ("Superior Tomato") in 1996. Superior Tomato is a joint
venture with Sunseeds Company ("Sunseeds"), a developer and producer of several
leading fresh market tomato varieties.

Agritope provides genetic engineering technology and regulatory expertise, has
responsibility for managing the joint venture, and has a two -thirds equity
ownership interest in Superior Tomato. Sunseeds provides elite tomato germplasm
and breeding expertise in the development of transgenic varieties. Superior
Tomato owns rights to any fresh market cherry, roma and vine-ripened large
fruited tomato varieties developed for the joint venture using Agritope ethylene
control technology and Sunseeds germplasm. Superior Tomato also owns any
technology jointly developed by Agritope and Sunseeds. The parties otherwise
retain all rights to their respective technologies. Superior Tomato is currently
in the process of developing and testing transgenic cherry, roma, and large
fruited vine-ripe tomato varieties. Agritope has developed transgenic inbred
lines of elite tomato germplasm provided by Sunseeds.

Prior to the formation of Superior Tomato, Agritope submitted safety,
nutritional and environmental information on a prototype transgenic tomato line
to both the USDA and the FDA. In March 1996, the USDA issued its finding that
this line has no significant environmental impact and would no longer be
considered a regulated article. During the same month, the FDA announced that
Agritope had completed the food safety consultation process with respect to its
prototype transgenic tomato line and that the variety did not raise issues that
would require pre-market review or approval by that agency. In order to commence
sale of selected varieties, Agritope will be required to make supplemental
submissions to the USDA and FDA that establish that such varieties are
comparable to the previously cleared lines.

RASPBERRY. The wholesale raspberry market, estimated in 1998 at $50 million
annually in the U.S., has experienced limited growth because of the extreme
perishability of the fruit. Agritope believes that the successful development of
raspberries containing its ethylene control technology could permit a
significant expansion of the fresh raspberry market.

Agritope is pursuing active research involving raspberry in three different
areas: (1) enhancement of post-harvest shelf life using Agritope's ethylene
control technology; (2) possible control of gray mold and (3) control of
raspberry bushy dwarf virus using a pathogen derived resistance gene.

RASPBERRY: POST-HARVEST SHELF LIFE. In collaboration with Sweetbriar
Development, Inc. ("Sweetbriar"), the largest fresh raspberry producer in the
U.S., Agritope has engineered several of Sweetbriar's proprietary commercial
raspberry varieties to contain the SAMase gene. Over the past several years,
Sweetbriar has obtained promising results from a series of field evaluations of
certain of its proprietary raspberry varieties containing the SAMase gene. In
1999, the field trials included evaluating the impact of simulated shipping
conditions. Based on the successful completion of such trials, field trials
scheduled for 2000 will include review of actual transportation to market under
normal shipping conditions.

Successful development of a commercial transgenic raspberry, which would be
owned by Sweetbriar, will require successful completion of the scheduled field
trials and filings to obtain the appropriate regulatory clearances. If these
conditions are met, Sweetbriar will produce the new raspberries for distribution
and marketing by Driscoll Strawberry Associates, the largest distributor of
fresh raspberries and strawberries in the U.S. Agritope would receive royalties
on wholesale product sales. Separately, Agritope has integrated its ripening
control technology into several public domain varieties.

RASPBERRY: FUNGAL CONTROL. BOTRYTIS CINEREA is a fungal pathogen that causes
both pre-harvest and post-harvest fruit rot of red raspberry, resulting in loss
estimated to be greater than 25%. Agritope researchers have

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transformed plants with a gene that may confer resistance against fungal
infection. Transgenic plants are currently undergoing field evaluations in
cooperation with Sweetbriar and the USDA.

RASPBERRY: PATHOGEN RESISTANCE. Raspberry bushy dwarf virus ("RBDV") is the most
common virus disease of raspberry, affecting yield and fruit quality. The virus
occurs throughout the raspberry growing areas of the world and has become an
increasingly important problem over the past 10 years. Major effects of RBDV
infection are crumbly fruit and reduced yield. Transmission of RBDV is
associated with flowering and, therefore, control is very difficult or
impossible by chemical means.

Agritope has developed a genetic engineering approach to develop RBDV resistance
in red raspberry. Transgenic plants have been evaluated in greenhouse trials in
cooperation with a USDA/ARS Horticultural Crops Research facility. Based on
early results, Agritope was awarded a Phase I SBIR grant in 1999 to continue the
research project.

VEGETABLE AND FLOWER CROPS. Agritope and Vilmorin, entered into a research and
development agreement (the "Vilmorin Research Agreement") in December 1997
covering certain vegetable and flower crops. Under the terms of the Vilmorin
Research Agreement, Vilmorin will provide proprietary seed varieties and
germplasm to Agritope for use in research projects funded by Vilmorin, in which
Agritope technology, and possibly Vilmorin technology, may be applied to the
various covered crops. A project advisory committee, consisting of two
scientists each from Agritope and Vilmorin, recommends projects for approval by
Vilmorin and Agritope. Unless otherwise agreed, Vilmorin will pay, on a
quarterly basis, all Agritope's out-of-pocket expenses, including employee
salaries and overhead, for each selected research project.

Agritope and Vilmorin have agreed to negotiate in good faith the terms of future
commercialization agreements applicable to any commercial-stage products that
arise out of such research and development projects. It is the intent of the
parties that Agritope will receive royalties on revenues generated through sales
of modified crops or modified seeds resulting from the research projects, or
that Agritope will receive revenues through participation in programs providing
royalties to Agritope and Vilmorin based on savings realized by growers and
distributors growing or handling the modified products. If the parties are
unable to agree on the terms on which a modified crop or seed is to be
commercialized, the terms of commercialization will be determined by "baseball"
style arbitration, in which the arbitrator chooses all of the terms proposed by
one party or the other without modification or compromise.

Each of Agritope and Vilmorin will continue to own its existing proprietary
technology. The parties will jointly own any new technology developed in the
course of the research, other than modified crops or seeds. Each will have a
right to commercialize the new technology in designated fields of use, subject
to an obligation to pay royalties for such use to the other party.

During the term of the agreement, Vilmorin will have a right of first refusal to
fund and participate in research projects proposed by Agritope involving the
genetic alteration of a covered crop. The agreement provides that Agritope will
deal with Vilmorin as a most favored customer in connection with research and
commercialization agreements. Unless terminated for default, the agreement will
remain in effect until the earlier of (i) expiration of all patents (and absence
of trade secrets) for technology used in modified crops and seeds for which the
parties have entered into commercialization agreements, and (ii) the date on
which Vilmorin ceases to own at least 214,285 shares of Agritope capital stock.

In connection with the Vilmorin Research Agreement, Vilmorin purchased 214,285
shares of Agritope Series A Preferred Stock ("Series A Preferred") at a price of
$7 per share. Vilmorin has agreed to provide additional funding totaling $1
million either by exercising its option to purchase Series A Preferred or
through the financing of research and development projects. Through September
30, 1999, Vilmorin has funded or agreed to fund projects totaling $796,000.

                                       9
<PAGE>

In September 1999 Vilmorin purchased 500,000 shares of Agritope's Series A
Convertible Preferred Stock for $2.5 million. For every four shares of Series A
Stock purchased in the private placement, Vilmorin also received a warrant to
purchase one additional share of Series A Stock at a price of $7 per share at
any time over the next five years. Vilmorin subsequently sold 150,000 shares of
Series A Stock together with the related warrants to an Israeli seed company,
Hazera Quality Seeds Ltd.("Hazera"), for $750,000. After completion of the sale,
Vilmorin owned 564,285 shares of Series A Stock, or 11.8% of the outstanding
capital stock of Agritope. Hazera's holdings amounted to 3.1% of Agritope's
outstanding capital stock.

A majority equity interest in Vilmorin is owned by Groupe Limagrain, S.A..,
which is, in turn, owned by Societe Cooperative Agricole Limagrain
("Cooperative"), a French agricultural cooperative and one of the largest seed
companies in the world. Cooperative's principal business is the production of
seeds for grains, corn, garden vegetables, and oil-producing plants.

ORNAMENTAL PLANTS. In 1999 Agritope licensed its SAMase ethylene technology to
Ball Horticultural Company ("Ball"), a global leader in the development,
production and marketing of ornamental species. Ball was granted a license to
the technology for use in ornamental plants, including rights to both genes and
gene promoters. In return, Agritope will receive royalties on the sale, if any,
of plants and derivatives that incorporate the licensed technology.

OTHER CROPS. Agritope is also pursuing research and development programs to
incorporate its SAMase technology into other crops where perishability causes
significant losses in the production and distribution process. These include
strawberries, bananas, peaches, pears and apples. Agritope is working with
leading proprietary tree fruit germplasm of peach, apple and pear and maintains
thousands of shoots through routine micropropagation techniques. Agritope has
developed rapid and efficient shoot regeneration methods in apple and pear.
Transformation experiments to incorporate SAMase, the ripening control gene,
into apple and pear cultivars are in progress. A patent application has been
filed with respect to a novel method of apple transformation discovered during
the course of the experimental work.

One component of introducing Agritope's ethylene control technology into tree
fruit is to target the expression of ethylene control genes to the ripening
fruit. Toward this goal, Agritope has several proprietary promoters that have
already been proven in tomato and melon. In addition, Agritope has been actively
identifying and testing fruit-specific promoters from apple, banana, peach, and
pear. Once appropriate promoters are isolated and tested, they are used to
direct expression of ethylene control genes in ripening fruit of genetically
modified plants.

The estimated U.S. wholesale markets in 1998 ranged from approximately $275
million for pears, to $1.3 billion for apples and $2.4 billion for bananas.

COMMERCIALIZATION STRATEGY. Agritope is currently evaluating a number of
commercialization strategies in order to realize the value of its technology.
The Company intends to generate revenues by licensing rights to its technology
in exchange for license fees, royalties and other payments. Agritope intends to
focus its development and licensing efforts primarily toward growers and
distributors of fruits and vegetables who are likely to derive the most benefit
from the reduced costs and spoilage losses that could potentially result from
using the Company's technologies.

As part of the Vilmorin Research Agreement, Agritope and Vilmorin have agreed to
negotiate in good faith the terms of future commercialization agreements
covering any products that reach commercial-stage development. Agritope
anticipates that it will receive royalties on the sale of any products,
including modified crops or seeds that arise out of research and development
projects conducted by Agritope and funded by Vilmorin.

G R A N T S   A N D   C O N T R A C T S

U.S. DEPARTMENT OF COMMERCE GRANT. In October 1997, Agritope was awarded a U.S.
Department of Commerce, National Institute of Standards and Technology ("NIST"),
Advanced Technology Program

                                    10
<PAGE>

("ATP") grant. The award covers a three-year project and totals $990,000.
Agritope was awarded the grant for use in the application of its proprietary
ripening-control technology to certain tree fruits and bananas.

The NIST/ATP grant provides cost-shared funding for research and development
projects with potential for important broad-based economic benefits to the U.S.
Agritope will bear $1.8 million of the total costs of the program, which are
estimated at $2.8 million. The awards are made on the basis of a rigorous
competitive review that considers both scientific and technical merit.

SBIR PROGRAMS. Agritope actively participates in the SBIR programs sponsored by
the USDA. The SBIR programs have two phases. Phase I covers a six-month project
period and a total award not to exceed $100,000. Phase II covers a two-year
project period and a total award not to exceed $750,000. In 1999, Agritope was
awarded a Phase I grant for $65,000 for the study of pathogen derived resistance
to raspberry bushy dwarf virus in red raspberry. In 1997, Agritope received a
$55,000 Phase I grant for work on geminivirus resistance strategies in tomatoes.
Agritope was awarded a Phase I grant of $50,000 in 1994 plus a Phase II grant of
$198,000 in 1995 for development of diagnostic tests for the detection of
grapevine leafroll virus.

COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS. Agritope has entered into two
Cooperative Research and Development Agreements ("CRADA's") with the U.S.
Department of Agriculture/Agricultural Research Services ("USDA/ARS"). Under the
CRADA's, Agritope will collaborate with USDA/ARS laboratories by providing
research services or partial funding for research projects. In return, Agritope
has been granted a right of first refusal to obtain a license for any resulting
inventions. The objective of the first CRADA is to create raspberries that are
resistant to RBDV. This research is a collaborative effort with the Northwest
Center for Small Fruit Research in Oregon. The research under this program in
1999 was partially funded by a Phase I SBIR grant (See "SBIR Programs"
above).  The second CRADA is funded jointly by Agritope and Harris Moran Seed
Company. It is aimed at furthering the understanding of the ethylene associated
physiological processes in ripening cantaloupe using SAMase-transformed
cantaloupe. This research is being carried out in collaboration with a USDA/ARS
research station in Texas.

OTHER GRANTS AND CONTRACTS. Agritope has also received grant support in the past
from the Oregon Strawberry Commission and Oregon Raspberry and Blueberry
Commission for antifungal biocontrol research. Agritope also receives funds for
research and development programs from its strategic partners, including
Vilmorin (See "Agritope Existing Development Programs-Vegetable and Flower
Crops"). Agritope intends to continue to participate in the SBIR program,
similar grant programs and projects with strategic partners. Agritope regularly
makes application for new grants, but there is no assurance that grant support
will be continued.

T E C H N O L O G I C A L   C H A N G E   A N D   C O M P E T I T I O N

A number of companies are engaged in research related to plant biotechnology,
including other companies that rely on the use of recombinant DNA as a primary
scientific strategy. Many of these companies are larger and have more resources
than Agritope. Technological advances by others could render Agritope's
technologies less competitive or obsolete. Competition in the fresh produce
market is intense and is expected to increase as additional companies introduce
products with longer shelf life and improved quality. There can be no assurance
that such competition will not have an adverse effect on Agritope's business and
results of operations.

V I N I F E R A ,   I N C.

Vinifera was incorporated in 1993 to participate in the grapevine nursery
business. Industry sources have estimated that 30 million grafted wine grapevine
plants were delivered to customers in California for the 1998 planting season.
Through proprietary processes, Vinifera propagates and grafts grapevine plants
for sale to vineyards and to growers of table grapes. All of Agritope's current
product sales are attributable to Vinifera.

                                       11
<PAGE>

Traditionally, grapevine plants for sale to vineyards are produced seasonally
using field grown, dormant cuttings that are grafted. In contrast, Vinifera uses
year-round greenhouse propagation and a herbaceous grafting method that employs
very young, actively growing cuttings. As a result of greenhouse propagation,
Vinifera is able to develop in two years a quantity of new plants that is
approximately ten times larger than can be produced with traditional techniques.
In addition, herbaceous grafting with green cuttings could allow a vineyard to
begin commercial production of grapes from a newly planted vineyard a year
sooner than would otherwise be possible. This grafting process also produces
sturdier unions than dormant grafting, resulting in significantly higher yields
of successful grafts, both at the propagation stage and in the survival of
actual plantings in the field. Agritope Research and Development provides
disease-testing services for Vinifera.

Vinifera is headquartered in Petaluma, California. Its library of grapevine
plants includes 30 different phylloxera-resistant types of rootstock, 100
different wine varietal clones, and two different table grape varietal clones.
Vinifera believes that this collection of different grapevine clones is one of
the largest in the world. Vinifera's U.S. customer base consists of over 275
vineyards in California, Washington and Oregon.

Several well-established family-owned nurseries that are significantly larger
than Vinifera provide competition in the grapevine nursery business. Like
Vinifera, these companies are based in California to service the major
concentration of grape growers in the United States. Vinifera believes that
growers tend to purchase plants from more than one nursery on the basis of
availability and price of desired plant varieties and on the perceived quality
of the product as measured by the health, survival and disease status of the
plants. Vinifera believes that it is the only nursery in the industry that
performs herbaceous grafting and, through its disease testing and elimination
program, the only nursery whose primary focus is on distinctive, premium quality
products and service.

P E R S O N N E L

At September 30, 1999, Agritope and its subsidiaries had 61 full-time employees,
including 31 in research and development, nine in administration and 21 at the
Vinifera grapevine plant nursery operation, which also employs seasonal
part-time employees as needed. Agritope considers its relations with its
employees to be excellent. None of its employees are represented by labor
unions.

Agritope employs seven persons holding Ph.D. degrees with specialties in the
following disciplines: applied botany, bacteriology and public health,
biological sciences, genetics, plant pathology and plant sciences. From time to
time, Agritope also engages the services of scientists as consultants to augment
the skills of its scientific staff.

S C I E N T I F I C   A D V I S O R Y   B O A R D

Agritope utilizes the services of a Scientific Advisory Board. The Scientific
Advisory Board meets periodically to review Agritope's research and development
efforts and to apprise Agritope of scientific developments pertinent to
Agritope's business. The Agritope Scientific Advisory Board consists of Eugene
W. Nester, Ph.D., Professor and Chair, Department of Microbiology, University of
Washington; Peter R. Bristow, Ph.D., Associate Professor of Plant Pathology,
Washington State University; Antoine de Courcel, Scientific Director, Vilmorin
Clause & Cie. and Joseph R. Ecker, Ph.D., Professor, Department of Biology
University of Pennsylvania. Dr. Nester is a member of the National Academy of
Sciences.

ITEM 2.  PROPERTIES

Agritope leases approximately 17,000 square feet of office and laboratory space
in Portland, Oregon. Agritope relocated its office and research and development
operations to leased facilities on March 15, 1998. The lease agreement, as
amended in September 1999 to add additional adjacent space, requires monthly
rental payments on a triple net lease basis of $16,610 through May 1, 2001, and
thereafter of $18,104 until expiration of the lease on February 28, 2003.
Agritope also owns a 15-acre farm in Woodburn, Oregon,

                                       12
<PAGE>

which it uses for propagation of experimental crops and for the ACTTAG gene
discovery program. Greenhouse capacity at the farm currently totals 50,000
square feet.

Vinifera leases 380,000 square feet of greenhouse space at two locations in
Petaluma, California. A 250,000 square-foot greenhouse is leased under a lease
that expires January 31, 2003 with the right to extend for two successive
five-year terms at stipulated rental rates. The lease provides an option to
purchase the leased premises for $1.3 million after February 1, 2001. A second
lease covering 130,000 square feet of greenhouse space expires in March 2004
with the right to extend for two successive five-year terms at stipulated rental
rates and a one-year option, which expires on March 31, 2005, to purchase, for
$2.5 million, the 130,000 square feet space, an adjacent greenhouse of 70,000
square feet and nine acres of land.

Agritope believes that its present facilities are adequate to meet current
requirements.

ITEM 3.  LEGAL PROCEEDINGS

As of the date of this filing, Agritope is not a party to any material pending
legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS

Agritope common stock (the "Common Stock") is traded on The Nasdaq Stock Market
under the symbol "AGTO." Trading commenced on December 29, 1997. As reported by
Nasdaq, the following table sets forth the range of high and low sales prices
for the Common Stock since commencement of trading:

                     YEAR ENDED SEPTEMBER 30, 1999
                     --------------------------------------------------------

                      Sales price per share                 High        Low

                      First Quarter ....................    2.125       0.875

                      Second Quarter ...................    3.375       1.250

                      Third Quarter ....................    3.625       1.250

                      Fourth Quarter ...................    4.125       1.875



                     YEAR ENDED SEPTEMBER 30, 1998
                     --------------------------------------------------------
                      Sales price per share                 High        Low

                      First Quarter ....................    7.500       6.000
                       (from December 29, 1997)

                      Second Quarter ...................    8.000       4.375

                      Third Quarter ....................    5.000       3.125

                      Fourth Quarter ...................    4.250       1.375



At November 30, 1999, the Company had 4,070,612 shares of Common Stock
outstanding, held by 823 stockholders of record.

                                       13
<PAGE>

Agritope has never declared or paid cash dividends on its common stock. Agritope
currently anticipates that it will retain all future earnings for use in the
operation and growth of its business and does not anticipate paying any cash
dividends in the foreseeable future.

On September 28, 1999, the Company completed a $2.5 million private placement of
500,000 shares of Series A Preferred Stock at a price of $5 per share. Vilmorin
purchased the shares. For every four shares of Series A Stock purchased in the
private placement, Vilmorin also received a warrant to purchase one additional
share of Series A Stock at a price of $7 per share at any time over the next
five years. Vilmorin subsequently sold 150,000 shares and related warrants to
Hazera Quality Seeds Ltd. of Israel. See Note 6 to Consolidated Financial
Statements. The shares and warrants were sold in reliance upon the Regulation S
exemption under the Securities Act of 1933, in off-shore transactions to non-US
persons. The purchasers made representations regarding their status and actions
necessary to comply with Regulation S.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected historical consolidated income and
balance sheet data of Agritope and its subsidiaries. The consolidated balance
sheet data at September 30, 1999 and 1998 and the consolidated operating results
data for the years ended September 30, 1999, 1998, and 1997 have been derived
from audited consolidated financial statements and notes thereto included in
this Annual Report. The balance sheet data at September 30, 1997, 1996 and 1995
and operating results data for the years ended September 30, 1996 and 1995 are
derived from audited consolidated financial statements and notes thereto not
included in this Annual Report. This information should be read in conjunction
with the consolidated financial statements and notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>

(In thousands, except per share data)                      YEAR ENDED SEPTEMBER 30,
                                        ----------------------------------------------------------------

<S>                                     <C>          <C>          <C>           <C>         <C>
CONSOLIDATED OPERATING RESULTS               1999         1998         1997         1996         1995(1)

Revenues................................ $  3,551     $  2,800     $  1,551      $   585     $  2,110
Operating costs and expenses............    9,124        9,024        6,089        2,821        9,920
Other income (expense), net ............      537           98       (4,427)(2)     (265)        (235)
Minority interest in subsidiary net loss      360          882          274            -            -
Net loss................................   (4,675)      (5,244)      (8,691)      (2,501)      (8,045)
Net loss per share (basic and diluted) (3)  (1.15)       (1.42)       (3.23)        (.93)       (2.99)
Shares used in per  share calculations (3)  4,061        3,705        2,691        2,691        2,691


                                                                   SEPTEMBER 30,
                                         --------------------------------------------------------------

CONSOLIDATED BALANCE SHEET                   1999         1998         1997         1996         1995

Working capital (deficiency)............ $  5,786     $  6,884     $  1,659    $  (3,163)    $    846
Total assets............................   15,471       14,390        7,285        5,670        4,067
Revolving line of credit................    1,463            -            -            -            -
Long-term debt..........................        5           10           15            -           22
Convertible notes.......................        -            -            -        3,620        3,620
Accumulated deficit.....................  (51,094)     (46,419)     (41,175)     (32,478)     (29,976)
Stockholder's equity ...................    9,323       11,010        4,763        1,008           75

</TABLE>

     (1) Data for 1995 includes revenues of $2.0 million and operating losses of
$3.8 million attributable to business units, which were divested.
     (2) Includes non-cash charges of $2.3 million, reflecting the permanent
impairment in the value of Agritope's investment in affiliated companies, and
$1.2 million for the conversion of Agritope convertible notes into Epitope, Inc.
common stock, no par value ("Epitope Stock") at a reduced price.
     (3) Net loss per share (basic and diluted) is presented on a pro forma
basis assuming that the distribution of Agritope common stock pursuant to the
spin-off had occurred on October 1, 1994. Potentially dilutive securities are
excluded from net loss per share calculations as their effect would have been
antidulutive.

                                       14
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

The following discussion of operations and financial condition should be read in
conjunction with the consolidated financial statements and notes thereto
included elsewhere in this Annual Report.

O V E R V I E W

Agritope is organized into two segments: The Research and Development segment
develops improved plant products and provides technology to the agricultural
industry. The Grapevine Propagation segment, operated by Agritope's
majority-owned subsidiary, Vinifera, Inc. ("Vinifera"), propagates, grows and
distributes grapevine plants to the premium wine industry. It also provides
disease testing and elimination services.

To date, the Research and Development segment has not completed
commercialization of its technology. A portion of the research and development
efforts conducted by the segment has been performed under various research
grants and contracts.

In July 1997, the board of directors of Epitope, Inc. ("Epitope") approved a
management proposal to spin off Agritope, subject to obtaining financing for
Agritope and the satisfaction of certain other conditions. The spin-off was
completed on December 30, 1997. To finance its operations as an independent
entity, Agritope sold 1,343,704 shares of Agritope common stock, including
associated preferred stock purchase rights, to certain foreign investors
pursuant to the Regulation S exemptions under the Securities Act of 1933, as
amended. The shares were sold at a price of $7 per share, for net aggregate
proceeds of $9.4 million. Proceeds were received immediately after the spin-off.
In connection with a research and development collaboration, Agritope also sold
214,285 shares of its newly designated Series A Preferred Stock to Vilmorin at a
price of $7 per share, for an aggregate price of $1.5 million. The proceeds of
the preferred stock sale were received approximately one week after the
completion of the spin-off. Epitope no longer owns or controls any shares of
Agritope stock following the spin-off.

The accompanying consolidated financial statements have been prepared to reflect
the historical operating results and financial condition of Agritope and its
subsidiaries. The operating statements include the cost of certain corporate
overhead services which were provided on a centralized basis for the benefit of
the medical products business conducted by Epitope and the agricultural
biotechnology business conducted by Agritope and its subsidiaries ("Shared
Services"). Such expenses were allocated using activity indicators which, in the
opinion of management, represent a reasonable measure of the respective
business' utilization of or benefit from such Shared Services. Epitope provided
such services through December 1, 1997 and, pursuant to a Transition Services
and Facilities Agreement, continued to provide office and laboratory space and
certain other services after that date until March 15, 1998 when the Company
moved to a separate facility.

                                       15

<PAGE>


R E S U L T S   O F   O P E R A T I O N S

YEARS ENDED SEPTEMBER 30, 1999, 1998 AND 1997

REVENUES. Total revenues increased by $752,000 million or 27% from 1998 to 1999,
and increased by $1.2 million or 80% from 1997 to 1998. Revenues by component
are shown below:
<TABLE>
<CAPTION>

YEAR ENDED SEPTEMBER 30 (IN THOUSANDS)             1999              1998               1997
<S>                                            <C>               <C>               <C>
Product sales
Grapevine plant sales.......................    $ 2,503           $ 2,575            $ 1,436

Grants and contracts
Government research grants..................        314               207                 30
Research projects with strategic partners...        498                 -                 53
Revenues from affiliates....................        236                 -                  -
Other.......................................          -                18                 32
                                              ---------              ----               ----
                                                  1,048               225                115

Total revenue...........................        $ 3,551           $ 2,800            $ 1,551
</TABLE>

Grapevine plant sales pertain to Vinifera, Agritope's majority-owned subsidiary.
Grapevine plant sales decreased slightly in 1999 compared to 1998, but Vinifera
continued to expand its customer base. Sales were made to approximately 275
customers in 1999 as compared to 175 customers in 1998 and 60 customers in 1997.
Vinifera sales to new customers in 1999 replaced sales to one customer that
accounted for 32.2% and 23.4% of net sales in 1998 and 1997, respectively. No
single customer accounted for more than 5% of net sales during the year ended
September 30, 1999. Vinifera commenced commercial stage operations in 1996.
Vinifera currently has confirmed orders of approximately $2.6 million for
delivery in the spring and summer of 2000 as compared to confirmed orders of
$1.6 million at the beginning of fiscal 1999. Proposed sales contracts are also
pending for an additional $1.4 million orders planned for delivery in the 2000
planting season.

Grant and contract revenues pertain to research projects directed at developing
superior new plants through genetic engineering. Revenue from such projects can
vary significantly from year to year as new projects are started while other
projects may be extended, completed or terminated. In addition, not all research
projects conducted by Agritope receive grant or contract funding. Grant and
contract revenues in 1999 included revenues from its strategic partner, Vilmorin
and from its newly formed joint venture, Agrinomics LLC.

In October 1997, the Company was awarded a three-year matching grant totaling
$990,000 under the Advanced Technology Program of the U.S. Department of
Commerce National Institute of Standards and Technology ("NIST") to study the
application of Agritope's ripening technology to certain tree fruits and
bananas. The NIST grant funds 49% of the Company's direct costs incurred for the
study. Grant and contract revenues include $262,000 and $129,000, in 1999 and
1998, respectively, applicable to the study. In addition, the Company received
matching funds in 1998 totaling $100,000 for the purchase of equipment used in
conducting the research program.

Revenues from grants under the Small Business Innovation Research program
totaled $52,000, $78,000, and $30,000 in 1999, 1998 and 1997, respectively.

GROSS MARGIN. Vinifera recorded a gross margin of 6.8% in 1999. Production
yields improved significantly from those achieved in 1998, resulting in lower
unit costs of production. Vinifera recorded a negative gross margin in 1998.
Grafted plants were lost in 1998 due to abnormal weather conditions which caused
grafting yield in 1998 to be significantly lower than planned, especially in the
fourth quarter of 1998, and resulted in

                                       16
<PAGE>

a charge of $974,000 to reduce inventory to net realizable value. Gross margin
on product sales was 7.7% of sales for 1997.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses in 1999,
1998 and 1997 totaled $3.1 million, $2.5 million and $1.7 million, respectively.
Increased expenses of $634,000 in 1999 were as the result of the addition of
projects funded by Vilmorin and Agrinomics, together with a higher level of
activity on the NIST grant. Research project expenses increased $790,000 in 1998
compared to 1997 as the Company initiated work on banana and tree fruit under
the NIST grant and also conducted extensive field trials of its extended
shelf-life cantaloupes

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses in 1999, 1998 and 1997 were $3.69 million, $3.14 million
and $3.08 million, respectively. The increase of $546,854 in 1999 was
attributable to several factors, primarily increased compensation expense
related to amortization of expense for stock options granted in December 1997,
increased sales expenses at Vinifera due to expanded sales activity and
increased legal fees related to the Company's proposed gene discovery program.
Rent, depreciation and other costs of occupancy also increased in 1999 as a
result of the Company's move to expanded quarters in March 1998. The increases
were partially offset by decreases in other professional fees and travel
expenses due to the fact that expenses in the first quarter of the 1998 fiscal
year included non-recurring fees and expenses incurred in connection with the
transition from operating as a wholly owned subsidiary to operating as an
independent public company. In 1998, expenses included non-cash charges of
$309,000 for amortization of the excess of fair value of stock options at date
of grant over the exercise price and $81,000 representing the fair value of
stock options issued to consultants. Expenses in 1997 included $913,000 of costs
incurred by Vinifera, which was not part of Agritope during the first eleven
months of 1996. During 1997, Vinifera expanded greenhouse capacity and continued
to establish marketing and administrative functions at its new headquarters
location in Petaluma, California. Such activities contributed to relatively high
selling, general and administrative expenses in comparison to product sales
levels.

Selling, general and administrative expenses included $228,000 and $1.4 million
for the allocation of Shared Services in 1998 and 1997, respectively. Epitope
provided such services through December 1, 1997 and, pursuant to a Transition
Services and Facilities Agreement, continued to provide office and laboratory
space and certain other services after that date until March 15, 1998 when the
Company moved to a separate facility.

OTHER INCOME (EXPENSE), NET. In 1999, Agritope sold a portion of its equity
interest in Vinifera to certain minority shareholders thereby reducing its
majority interest from 64% to 57%. The gain on the sale amounted to $290,000 and
is included in other income. Also in 1999, Vinifera received, and recorded as
other income, a payment of $170,000 representing reimbursement for certain
expenses incurred in prior years to explore establishment of a grapevine nursery
business in Spain in cooperation with a minority shareholder of Vinifera.
Vinifera ultimately decided to discontinue its participation in the project and
was reimbursed for expenses it incurred for the benefit of the venture.

In 1998, Vinifera sold its minority interest in Vinifera Sudamericana, SA for
$70,000 and recognized a loss of $130,000 in other expense.

During 1997, Agritope recorded a non-cash charge to results of operations of
$2.3 million, reflecting the permanent impairment in the value of its investment
in two wholesale fresh-flower distribution businesses. Agritope also incurred a
charge of $1.2 million for conversion of $3.4 million principal amount of
Agritope convertible notes into Epitope common stock at a reduced conversion
price. Also in 1997, a charge of $744,000 was recorded as other expense in
recognition of the Company's contingent liability as primary lessee on two
leases pertaining to the fresh flower businesses. See Note 9 to Consolidated
Financial Statements.

                                       17
<PAGE>

Interest income of $103,000 and $224,000 was earned in 1999 and 1998,
respectively, from investment of proceeds of private placements of capital stock
in the last three quarters of 1998.

L I Q U I D I T Y   A N D   C A P I T A L   R E S O U R C E S

SEPTEMBER 30,                                   1999                  1998
(in thousands)

Cash and cash equivalents................    $ 4,204               $ 3,904
Working capital .........................      5,786                 6,884

At September 30, 1999, Agritope had working capital of $5.8 million as compared
to working capital of $6.9 million at September 30, 1998. Vinifera's inventory
increased $1.8 million due to increased order activity and improved yield. The
plants can be maintained in greenhouses or stored outside for several years
during which time they continue to grow. Inventory on hand at September 30, 1999
represents grapevine plants expected to be sold in the spring and summer of 2000
and 2001.

During 1999, expenditures for property and equipment were $447,000, principally
for greenhouse improvements and expansion of grapevine propagation blocks at
Vinifera. The Company also expended $485,000 for proprietary technology related
to its patent portfolio. For the first nine months of 1999, Vinifera used
expanded credit from vendors on open account and internally generated cash from
collection of accounts receivable and deposits on future orders to fund
operations and capital expenditures. In June 1999 Vinifera replaced a $1.5
million working capital line from Agritope with a $1.5 million commercial bank
line. Advances of $363,000 under the line were used to support Vinifera's fourth
quarter operating requirements. Agritope's cash requirements for the first nine
months of 1999 were supplied primarily from cash reserves supplemented by
research funding from government agencies and Vilmorin Clause & Cie
("Vilmorin"), a strategic partner, and, in the fourth quarter, from its newly
formed joint venture, Agrinomics LLC. In addition, Agritope received $1 million
from Vinifera in connection with refinancing the Vinifera line of credit.

Agritope expended $1.3 million in 1998 to furnish and equip its newly occupied
facilities and $638,000 for patents and licenses of proprietary technology.
Vinifera expended $861,000 to expand production capacity. Agritope has also
acquired certain rights to certain proprietary genes for which it made payments
of $300,000 in 1999 and 1998. Such amounts are included in "patents and
proprietary technology, net."

In June 1999, Agritope entered into stock purchase agreements with certain
minority shareholders of Vinifera pursuant to which minority ownership of
Vinifera will increase from 36% to approximately 50% over a three-year period.
Agritope received proceeds totaling $874,000 and its ownership interest in
Vinifera was reduced from 64% to 57%.

In September 1999, the Company completed a $2.5 million private placement of
500,000 shares of Series A Preferred Stock at a price of $5 per share. Vilmorin
purchased the shares. For every four shares of Series A Stock purchased in the
private placement, Vilmorin also received a warrant to purchase one additional
share of Series A Stock at a price of $7 per share at any time over the next
five years. Vilmorin subsequently sold 150,000 shares and related warrants to a
strategic partner, Hazera Quality Seeds Ltd. of Israel.

Historically, the primary sources of funds for meeting Agritope's requirements
for operations, working capital and business expansion have been cash from its
former parent company, Epitope, sale of convertible notes, investments in
Vinifera by minority shareholders, and funding from strategic partners and other
research grants. In 1999 Agritope received proceeds of $2.5 million from a
private placement of 500,000 shares of Series A stock and $874,000 from the sale
of a portion of its majority interest in Vinifera to certain minority
shareholders. In 1998, Agritope realized $1.2 million in cash from Epitope prior
to the spin-off. Proceeds from private placements in 1998 yielded $9.8 million
for Agritope and minority shareholders of Vinifera invested another $1.8 million
in Vinifera. Agritope expects to continue to require significant funds to
support its operations and research activities. Agritope intends to utilize cash
reserves, cash generated from sales of products, and research funding from
strategic partners and other research grants to provide the necessary funds.
Agritope may also rely on the sale of equity securities to generate additional
funds.

                                       18
<PAGE>

Agritope presently anticipates that funds on hand as of September 30, 1999, will
be sufficient to finance operations for the upcoming year, based on currently
estimated revenues and expenses. Because this estimate is based on a number of
factors, many of which are beyond the Company's control, there can be no
assurance that this estimate will prove to be accurate, and to the extent that
Agritope's operations do not progress as anticipated, additional capital may be
required. Additional capital may not be available on acceptable terms, if at
all, and the failure to raise such capital would have a material adverse effect
on Agritope's business, financial condition, and results of operations.

Agritope has completed a Year 2000 compliance review of its systems and
procedures to determine the costs and risks related to the Year 2000 date
conversion. As a result of this review, the Company believes that it will not
incur material Year 2000 remedial costs and that its operations will not be
materially affected by the Year 2000 conversion, and as a consequence it has not
established a contingency plan.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of September 30, 1999, Vinifera, Inc. a majority-owned subsidiary of the
Company had borrowings under a $1.5 million revolving line of credit, which is
subject to interest rate risk. Due to the short-term nature of the borrowings
under this credit facility, an immediate 10% increase in interest rates would
not have a material effect on the Company's financial condition or the results
of operations.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information with respect to this Item is contained in the Company's consolidated
financial statements included in response to Item 14 of this Annual Report on
Form 10-K.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

(a)  Effective February 23, 1998, Agritope dismissed its prior independent
     accountant, PricewaterhouseCoopers LLP. The decision to change accountants
     was recommended by Agritope's Audit Committee and was approved by its Board
     of Directors.

     PricewaterhouseCoopers LLP reports on Agritope's financial statements for
     fiscal years 1997 and 1996 did not contain an adverse opinion or disclaimer
     of opinion, nor were they qualified or modified as to uncertainty, audit
     scope or accounting principles, except that the PricewaterhouseCoopers LLP
     report on the financial statements for the year ended September 30, 1997
     included an explanatory paragraph regarding a change in the basis of
     presentation of such financial statements from those previously issued.

     During the audits for the years 1997 and 1996 and through the date hereof,
     there were no disagreement between Agritope and PricewaterhouseCoopers LLP
     on any matters of auditing scope or procedures, which disagreements, if not
     resolved to the satisfaction of PricewaterhouseCoopers LLP, would have
     caused it to make a reference to the subject matter of the disagreements in
     connection with its reports.

     Agritope requested that PricewaterhouseCoopers LLP furnish it with a letter
     addressed to the Securities and Exchange Commission stating whether or not
     it agrees with the above statements. A copy of such letter, dated February
     27, 1998, was filed as Exhibit 16 to a report on Form 8-K dated February
     23, 1998 and is incorporated herein by reference.

(b)  Effective February 23, 1998, Agritope engaged Arthur Andersen LLP ("Arthur
     Andersen") as its principal accountant. During fiscal years 1997 and 1996
     and through February 23, 1998, Agritope did not consult Arthur Andersen
     regarding any of the matters or events set forth in Item 304 (a) (2) (i)
     and (ii) of Regulation S-K.

                                       19
<PAGE>

                                    PART III

The Company has omitted from Part III the information that will appear in the
Company's definitive proxy statement for its 2000 annual meeting of stockholders
(the "Proxy Statement"), which will be filed within 120 days after the end of
the Company's fiscal year pursuant to Regulation 14A.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item is incorporated by reference to the
information under the caption "Election of Directors" and
"Executive Officers" in the Proxy Statement

ITEM 11.  EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference to the
information under the caption "Executive Compensation" in the Proxy Statement

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is incorporated by reference to the
information under the caption "Principal Shareholders" in the Proxy Statement

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated by reference to the
information under the caption "Certain Transactions" in the Proxy Statement

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>

(a) (1) and (a) (2)  Financial Statements and Schedules
                                                                                           PAGE
<S>                                                                                         <C>
Agritope, Inc. and Subsidiaries
Reports of Independent Accountants......................................................     21
Consolidated Balance Sheets as of September 30, 1999 and 1998...........................     23
Consolidated Statements of Operations
  for the years ended September 30, 1999, 1998 and 1997.................................     24
Consolidated Statements of Changes in Stockholders' Equity
  for the years ended September 30, 1999, 1998 and 1997.................................     25
Consolidated Statements of Cash Flows
  for the years ended September 30, 1999, 1998 and 1997.................................     26
Notes to Consolidated Financial Statements..............................................     27
</TABLE>

No schedules are included in the foregoing financial statements because the
required information is inapplicable or is presented in the financial statements
or related notes thereto.

(a) (3) Exhibits

See Index to Exhibits following the signature page of this report.

(b) Reports on Form 8-K

No reports on Form 8-K were filed in the fourth quarter of the fiscal year
covered by this report.

                                       20
<PAGE>

A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

R E P O R T   OF   I N D E P E N D E N T   A C C O U N T A N T S

To the Board of Directors and Stockholders of Agritope, Inc.

We have audited the accompanying consolidated balance sheets of Agritope, Inc.
(a Delaware corporation) and subsidiaries as of September 30, 1999 and 1998, and
the related consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Agritope, Inc. and subsidiaries as of September 30, 1999 and 1998, and the
consolidated results of its operations and its cash flows for each of the two
years then ended in conformity with generally accepted accounting principles.


                           /s/ ARTHUR ANDERSEN LLP


Portland, Oregon,
October 29, 1999




                                       21
<PAGE>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

R E P O R T   O F   I N D E P E N D E N T   A C C O U N T A N T S

To the Board of Directors and Stockholders of Agritope, Inc.

In our opinion, the consolidated statements of operations, stockholders' equity
and cash flows for the year ended September 30, 1997 present fairly, in all
material respects, the results of operations and cash flows of Agritope, Inc.and
its subsidiaries for the year ended September 30, 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with generally accepted auditing standards,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above. We have not audited the
consolidated financial statements of Agritope, Inc. for any period subsequent to
September 30, 1997.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP


Portland, Oregon
October 31, 1997


                                       22
<PAGE>
<TABLE>
<CAPTION>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S
C O N S O L I D A T E D   B A L A N C E   S H E E T S


SEPTEMBER 30                                                                1999                      1998
ASSETS
<S>                                                                 <C>                     <C>
Current assets
Cash and cash equivalents............................                $  4,203,937            $   3,904,087
Trade accounts receivable, net.......................                     355,187                1,033,860
Other accounts receivable............................                     165,480                  124,690
Due from affiliate...................................                     119,088                        -
Inventories..........................................                   5,053,888                3,289,172
Prepaid expenses.....................................                      73,440                  172,196
                                                                     ------------             ------------
Total current assets.................................                   9,971,020                8,524,005

Property and equipment, net..........................                   3,511,824                4,100,804
Patents and proprietary technology, net..............                   1,945,586                1,736,998
Other assets and deposits ...........................                      42,752                   28,519
                                                                     ------------             ------------
                                                                      $15,471,182              $14,390,326
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable.....................................                    $642,178            $     178,171
Revolving line of credit.............................                   1,463,000                        -
Advances from minority shareholders of subsidiary....                     180,616                        -
Current portion of installment notes payable.........                       4,576                    4,255
Current portion of lease liability...................                     140,935                  358,404
Deposits on customer orders..........................                   1,173,303                  599,944
Salaries, benefits and other accrued liabilities.....                     580,028                  499,313
                                                                     ------------             ------------
Total current liabilities............................                   4,184,636                1,640,087

Long-term portion of installment notes payable.......                       5,465                   10,238
Long-term portion of lease liability.................                           -                  115,785
Minority interest....................................                   1,958,538                1,613,977
Commitments and contingencies

Stockholders' equity
Preferred stock, par value $.01
  10,000,000 shares authorized; 714,285 shares
  and 214,285 shares issued and outstanding,  respectively                  7,143                    2,143
Common stock, par value $ .01
  30,000,000 shares authorized; 4,070,612 shares
  and 4,050,150 shares issued and outstanding,
  respectively.......................................                      40,706                   40,502
Additional paid-in capital...........................                  60,369,181               57,386,675
Accumulated deficit..................................                 (51,094,487)             (46,419,081)
                                                                     -------------            -------------
                                                                        9,322,543               11,010,239
                                                                      $15,471,182             $ 14,390,326
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

</TABLE>

                                                            23
<PAGE>
<TABLE>
<CAPTION>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S
C O N S O L I D A T E D   S T A T E M E N T S   O F   O P E R A T I O N S

FOR THE YEAR ENDED SEPTEMBER 30                    1999              1998               1997
<S>                                       <C>               <C>                <C>
Revenues
Product sales...........................   $  2,503,377      $  2,574,976       $  1,436,498
Grants and contract revenues............        811,676           224,688            114,692
Revenue from affiliates.................        236,416                 -                  -
                                           ------------      ------------       ------------
                                              3,551,469         2,799,664          1,551,190

Costs and expenses
Product costs...........................      2,333,673         3,414,293          1,326,163
Research and development costs..........      3,105,183         2,471,374          1,681,646
Selling, general and
 administrative expenses................      3,685,291         3,138,437          3,081,074
                                           ------------      ------------       ------------
                                              9,124,147         9,024,104          6,088,883

Loss from operations....................     (5,572,678)       (6,224,440)        (4,537,693)
                                           -------------     -------------      -------------

Other income (expense), net
Interest income.........................        102,742           224,350                  -
Interest expense........................        (21,446)           (1,248)           (25,307)
Gain on sale of stock of subsidiary.....        289,603                 -                  -
Valuation loss..........................              -                 -         (2,258,080)
Debt conversion.........................              -                 -         (1,216,654)
Other, net..............................        166,365          (125,052)          (927,234)
                                           ------------       ------------      -------------
                                                537,264            98,050         (4,427,275)

Minority interest in subsidiary net loss        360,008           882,423            274,369
                                           ------------       -----------       -------------

Net loss................................   $ (4,675,406)     $ (5,243,967)      $ (8,690,599)

Net loss per share (basic and diluted)..        $ (1.15)          $ (1.42)          $  (3.23)

Weighted average number
  of shares outstanding.................      4,061,474         3,705,490          2,690,770

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
</TABLE>

                                       24
<PAGE>
<TABLE>
<CAPTION>


A G R I T O P E ,  I N C .  A N D  S U B S I D I A R I E S
C O N S O L I D A T E D  S T A T E M E N T S  O F  C H A N G E S
I N  S T O C K H O L D E R S '  E Q U I T Y

                                           PREFERRED       COMMON        ADDITIONAL     ACCUMULATED
                                               STOCK        STOCK   PAID-IN CAPITAL         DEFICIT
<S>                                       <C>          <C>             <C>            <C>
Balances at September 30, 1996............ $       -    $  26,908       $33,465,214    $(32,484,515)
Compensation expense for stock  awards....         -            -            33,063               -
Compensation expense for
 stock option  grants.....................         -            -            20,832               -
Capital contributed by Epitope, Inc., upon
  exchange of convertible notes...........         -            -         4,529,009               -
Equity issuance costs.....................         -            -           (86,134)              -
Minority interest investment in subsidiary         -            -           742,752               -
Cash contribution from Epitope, Inc.......         -            -         7,206,196               -
Net loss for the year ....................         -            -                 -      (8,690,599)
                                           --------- ------------ -----------------    -------------
Balances at September 30, 1997............         -       26,908        45,910,932     (41,175,114)

Compensation expense for
 stock option grants......................         -            -           390,420               -
Common stock issued as compensation-
  15,670 shares...........................         -          157            40,345               -
Common stock issued in private placement-
  1,343,704 shares........................         -       13,437        10,322,333               -
Preferred stock issued in private placement-
  214,285 shares..........................     2,143            -         1,497,852               -
Equity issuance costs ....................         -            -        (2,023,347)              -
Cash contribution from Epitope, Inc.......         -            -         1,248,140               -
Net loss for the year ....................         -            -                 -      (5,243,967)
                                           --------- ------------ -----------------    -------------
Balances at September 30, 1998 ...........     2,143       40,502        57,386,675     (46,419,081)

Compensation expense for
 stock option grants......................         -            -           457,861               -
Common stock issued as compensation-
 20,462 shares............................         -          204            40,953               -
Preferred stock issued in private placement-
 500,000 shares...........................     5,000            -         2,615,000               -
Equity issuance costs ....................         -            -          (131,308)              -
Net loss for the year ....................         -            -                 -      (4,675,406)
                                           --------- ------------ -----------------    -------------
Balances at September 30, 1999 ...........  $  7,143    $  40,706       $60,369,181    $(51,094,487)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

</TABLE>

                                                             25
<PAGE>
<TABLE>
<CAPTION>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S
C O N S O L I D A T E D   S T A T E M E N T S   O F   C A S H   F L O W S

FOR THE YEAR ENDED SEPTEMBER 30                               1999              1998             1997
<S>                                                   <C>              <C>              <C> >
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss.............................................  $(4,675,406)     $ (5,243,967)    $ (8,690,599)
Adjustments to reconcile net loss to net cash
  used in operating activities:
Depreciation and amortization........................    1,307,937           951,209          566,813
Loss on sale of property.............................        3,637                54                -
Gain on sale of common stock of subsidiary...........     (289,603)                -                -
Compensation expense for stock awards................       41,157            40,502           33,063
Compensation expense for stock option grants.........      457,861           390,420           20,832
Minority interest in subsidiary net loss.............     (360,008)         (882,423)        (274,369)
Valuation loss.......................................            -                `-        2,258,080
Non-cash portion of cost of debt conversion..........            -                 -        1,149,054
Decrease (increase) in receivables...................      637,883          (535,637)        (325,590)
(Increase) in receivable from affiliate..............     (119,088)                -                -
(Increase) in inventories............................   (1,764,716)       (1,207,877)      (1,571,550)
Decrease (increase) in prepaid expenses..............       98,756           104,028         (275,412)
Decrease (increase) in other assets and deposits.....      (14,233)           (1,722)          21,462
Increase in accounts payable and accrued liabilities.      665,058            86,966        1,022,592
Increase (decrease) in deposits on customer orders...      573,359           210,013          (76,986)
Other................................................            -           162,647                -
                                                        ----------        ----------       ----------
Net cash used in operating activities................   (3,437,406)       (5,925,787)      (6,142,610)

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment..................     (446,730)       (2,126,906)      (1,927,209)
Proceeds from sale of property.......................          900            11,033                -
Proceeds from sale of common stock of subsidiary.....      873,836                 -                -
Expenditures for patents and proprietary
  technology.........................................     (485,352)         (646,712)        (870,910)
Investment in affiliated companies...................            -            70,000          (56,419)
                                                        ----------        ----------       ----------
Net cash used in investing activities................      (57,346)       (2,692,585)      (2,854,538)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt...........................            -                 -           20,887
Principal payments on long-term debt ................       (4,452)           (4,331)        (242,063)
Payments on long-term lease obligation...............     (333,254)         (317,920)               -
Proceeds from revolving line of credit...............    1,463,000                 -                -
Advances from minority shareholders of subsidiary....      180,616                 -                -
Proceeds from issuance of stock, net.................    2,488,692         9,812,418                -
Minority interest investment in subsidiary...........            -         1,779,768        1,540,000
Cash from Epitope, Inc...............................            -         1,248,140        7,206,196
                                                      ------------      ------------       ----------
Net cash provided by financing activities............    3,794,602        12,518,075        8,525,020

Net increase (decrease) in cash and cash equivalents.      299,850         3,899,703         (472,128)
Cash and cash equivalents at beginning of year.......    3,904,087             4,384          476,512
                                                      ------------      ------------      -----------
Cash and cash equivalents at end of year............. $  4,203,937      $  3,904,087       $    4,384

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
</TABLE>

                                                            26

<PAGE>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S
N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  1    T H E   C O M P A N Y

Agritope, Inc. (the "Company" or "Agritope") is an Oregon-based agricultural
biotechnology company that develops improved plant products and provides
technology to the agricultural industry. Its 57% owned subsidiary, Vinifera,
Inc. ("Vinifera"), offers superior grapevine plants to the premium wine industry
together with disease testing and elimination services. Agrinomics LLC
("Agrinomics") is a 50% owned subsidiary that conducts a gene discovery program.
Superior Tomato Associates, LLC ("Superior Tomato") is a 66-2/3% owned
subsidiary formed to develop and market longer-lasting tomatoes. Agrimax Floral
Products, Inc. ("Agrimax") is an inactive subsidiary that holds a 9% interest in
UAF, Limited Partnership ("UAF"), a fresh flower distribution operation based in
Tampa, Florida. Prior to December 30, 1997, Agritope was a wholly owned
subsidiary of Epitope, Inc. ("Epitope"), an Oregon corporation engaged in the
development and marketing of medical diagnostic products.

AGRITOPE SPIN-OFF. In July 1997, the Epitope board of directors approved a
management proposal to spin off Agritope, subject to obtaining financing for
Agritope and the satisfaction of certain other conditions. In December 1997,
Agritope sold 1,343,704 shares of Agritope common stock in a private placement
to certain investors for aggregate net proceeds of $9,406,000, immediately after
the spin-off. The spin-off was accomplished by a distribution of 2,690,776
shares of Agritope common stock to Epitope shareholders, representing 100% of
Epitope's holdings of Agritope common stock.

Agritope and Epitope entered into certain agreements governing the ongoing
relationship between the companies after the spin-off, including a Separation
Agreement, a Tax Allocation Agreement, a Transition Services and Facilities
Agreement and an Employee Benefits Agreement. Pursuant to the Employee Benefits
Agreement, Agritope established replacement plans that effectively continue to
provide benefits available under current Epitope benefit plans.

DELAWARE REINCORPORATION; RECAPITALIZATION. In November 1997, in connection with
the spin-off of Agritope by Epitope, Agritope agreed to merge with Agritope,
Inc., a newly formed Delaware corporation. The purpose of the merger was to
change the Company's domicile from Oregon to Delaware and increase the Company's
authorized capital stock to 30 million shares of common stock, par value $.01
per share, and 10 million shares of preferred stock, par value $.01 per share.
The merger occurred on December 3, 1997.

On November 25, 1997, the Agritope board of directors declared a stock dividend
of 690,866 shares of Agritope common stock to the sole Agritope stockholder.
Subsequently, 2,690,766 shares of Agritope common stock were distributed to the
shareholders of Epitope in the spin-off and the remaining shares, representing
fractional interest, were redeemed for cash. All of the shares of Agritope
common stock that were distributed to Epitope shareholders have been reflected
as outstanding for all periods presented in the accompanying financial
statements.

BASIS OF PRESENTATION. The accompanying consolidated financial statements
include the assets, liabilities, revenues and expenses of Agritope and its
majority owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation. Minority-owned investments and
joint ventures are accounted for using the equity method. Investments of less
than 20% are carried at cost or estimated net realizable value, whichever is
lower. Intercompany balances with Epitope have been reflected as capital
contributions (common stock and additional paid-in capital) in the accompanying
consolidated financial statements because they were converted into a permanent
capital contribution in conjunction with the spin-off.

                                       27

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A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S
N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  2    S U M M A R Y   O F   S I G N I F I C A N T   A C C O U N T I N G
   P O L I C I E S

Certain corporate overhead services such as accounting, annual meeting costs,
annual report preparation, audit, executive management, facilities, finance,
general management, human resources, information systems, investor relations,
legal services, payroll and SEC filings were provided by Epitope on a
centralized basis for the benefit of Agritope ("Shared Services"). Such expenses
have been allocated to Agritope in the accompanying financial statements using
activity indicators, which, in the opinion of management, represent a reasonable
measure of Agritope's utilization of such Shared Services. These activity
indicators, which were reviewed periodically and adjusted to reflect changes in
utilization, include number of employees, number of computers, and level of
expenditures. Management believes that the amount allocated for these Shared
Services is not materially different from the amount that would be incurred by
Agritope for such services provided on a stand-alone basis. Allocated Shared
Services of $227,990 and $1,402,895, respectively, for 1998 and 1997 are
included under the caption "Selling, general and administrative expenses" in the
accompanying consolidated statements of operations. Epitope discontinued
provision of Shared Services in March 1998 when Agritope moved to separate
physical facilities.

CASH AND CASH EQUIVALENTS. For purposes of the consolidated balance sheets and
statements of cash flows, all highly liquid investments with maturities at time
of purchase of three months or less are considered to be cash equivalents.

INVENTORIES. Inventories, consisting principally of growing grapevine plants at
Vinifera, are recorded at the lower of average cost or market. Average cost
includes all direct and indirect costs attributable to the growing grapevine
plants. Inventory is summarized as follows:

SEPTEMBER 30                                          1999             1998
Operating supplies ........................    $   143,757       $  142,900
Work-in-process ...........................      1,437,617          128,374
Finished goods ............................      3,472,514        3,017,898
                                                 ---------        ---------
                                                $5,053,888      $ 3,289,172

Loss of grafted plants due to abnormal weather conditions in 1998 caused
grafting yield to be significantly lower than planned, especially in the fourth
quarter, resulting in a charge of $974,000 to product costs in order to reduce
inventory to net realizable value.

DEPRECIATION AND CAPITALIZATION POLICIES. Property and equipment are stated at
cost less accumulated depreciation. Expenditures for repairs and maintenance are
charged to operating expense as incurred. Expenditures for renewals and
betterments are capitalized. Depreciation and amortization of property and
equipment are calculated primarily under the straight-line method over the
estimated useful lives of the related assets (three to seven years). Leasehold
improvements are amortized over the shorter of estimated useful lives or the
terms of the related leases. When assets are sold or otherwise disposed of, cost
and related accumulated depreciation or amortization are removed from the
accounts and any resulting gain or loss is included in results of operations.

                                       28

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A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S
N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  2    S U M M A R Y   O F   S I G N I F I C A N T   A C C O U N T I N G
                    P O L I C I E S,   C O N T I N U E D

ACCOUNTING FOR LONG-LIVED ASSETS. The Company reviews its long-lived assets for
impairment periodically or as events or circumstances indicate that the carrying
amount of long-lived assets may not be recoverable. If the estimated net cash
flows are less than the carrying amount of the long-lived assets, the Company
recognizes an impairment loss in an amount necessary to write down long-lived
assets to fair value as determined from expected discounted future cash flows.
This accounting policy is consistent with Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of."

PATENTS AND PROPRIETARY TECHNOLOGY. Direct costs associated with patent
submissions and acquired technology are capitalized and amortized over their
minimum estimated economic useful lives, generally five years. Amortization and
accumulated amortization are summarized as follows:

                                          1999         1998          1997
Amortization for the year...........  $276,764    $ 186,406     $ 104,461
Accumulated amortization............   696,192      419,428       233,022

FAIR VALUE OF FINANCIAL INSTRUMENTS. The carrying amounts for cash equivalents,
accounts receivable, accounts payable and revolving line of credit approximate
fair value because of the immediate or short-term maturity of these financial
instruments. The carrying amount for installment notes payable approximates fair
value because the related interest rates are comparable to rates currently
available to the Company for debt with similar terms and maturities. The Company
does not have any derivative financial instruments.

REVENUE RECOGNITION. Product sales are recognized when the related products are
shipped. Grant and contract revenues include funds received under research and
development agreements with various entities. These grants and contracts
generally provide for progress payments as expenses are incurred and certain
research milestones are achieved. Revenue related to such grants and contracts
is recognized as research milestones are achieved. Accounts receivable are
stated net of an allowance for doubtful accounts of $24,054 as of September 30,
1999 and $25,057 as of September 30, 1998.

MAJOR CUSTOMER. For the years ended September 30, 1998 and 1997, respectively,
one customer purchased $829,578 and $337,374 of grapevine plants from Vinifera,
representing 32.2% and 23.4% of Vinifera's net sales. No single customer
accounted for more than 5% of net sales during the year ended September 30,
1999.

RESEARCH AND DEVELOPMENT. Research and development expenditures are comprised of
those costs associated with Agritope's ongoing research and development
activities to develop superior new plants. Expenditures for research and
development also include costs incurred under contracts to develop certain
products, including those contracts resulting in grant and contract revenues.
All research and development costs are expensed as incurred.

INCOME TAXES. The Company accounts for certain revenue and expense items
differently for income tax purposes than for financial reporting purposes. These
differences arise principally from methods used in accounting for stock options
and depreciation rates. Deferred tax assets and liabilities are recognized based
on temporary differences between the financial statement and the tax bases of
assets and liabilities using enacted tax rates in effect for the year in which
the temporary differences are expected to reverse.

                                       29

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A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  2    S U M M A R Y   O F   S I G N I F I C A N T   A C C O U N T I N G
                P O L I C I E S,   C O N T I N U E D

STOCK-BASED COMPENSATION. In October 1995, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"). SFAS 123 allows companies which have
stock-based compensation arrangements with employees to adopt a fair-value basis
of accounting for stock options and other equity instruments or to continue to
apply the existing accounting rules under Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), but with
additional financial statement disclosure. The Company has elected to apply the
existing accounting rules under APB 25 to its stock-based compensation plans.
See Note 6.

NET LOSS PER SHARE. Basic earnings per share ("EPS") and diluted EPS are
computed using the methods prescribed by Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("SFAS 128"). Basic EPS is calculated
using the weighted-average number of common shares outstanding for the period
and diluted EPS is computed using the weighted-average number of common shares
and dilutive common equivalent shares outstanding. Basic and diluted EPS are the
same for all periods presented since the Company was in a loss position in all
periods. The following potentially dilutive securities are excluded from net
loss per share calculations as their effect would have been antidilutive:
<TABLE>
<CAPTION>

YEAR ENDED SEPTEMBER 30                            1999              1998             1997
<S>                                          <C>               <C>                      <C>
Options to purchase common stock........      1,708,103         1,255,264                -
Warrants to purchase common stock.......        708,333           583,333                -
Preferred stock.........................        714,285           214,285                -
                                             ----------       -----------         --------
                                              3,130,721         2,052,882                -
</TABLE>

SUPPLEMENTAL CASH FLOW INFORMATION. Non-cash financing and investing activities
not included in the consolidated statements of cash flows are summarized as
follows:
<TABLE>
<CAPTION>

YEAR ENDED SEPTEMBER 30                            1999              1998             1997
<S>                                          <C>                <C>             <C>
Cash paid for interest..................      $  21,446          $  1,248        $  25,307
Fair value of warrants issued in connection
  with private placements...............        120,000           929,842                -
Minority interest contribution
  of capital (Note 6)...................              -                 -          742,752
Conversion of notes
  to equity (Notes 5 and 6).............              -                 -        3,380,000
</TABLE>

MANAGEMENT ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
relating to assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could vary from these
estimates.

                                       30

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A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  3   I N V E S T M E N T   I N   A F F I L I A T E D   C O M P A N I E S

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

In 1997, the Company recorded a charge of $2,258,080 to recognize the permanent
impairment of its investment in a fresh flower distribution business.

The Company's capital contributions to support the research activities of
Superior Tomato are expensed as incurred.

N O T E  4    P R O P E R T Y   A N D   E Q U I P M E N T
<TABLE>
<CAPTION>

Property and equipment are summarized as follows:

SEPTEMBER 30                                                         1999             1998
<S>                                                           <C>           <C>
Land........................................................   $   30,020    $      30,020
Grapevine propagation blocks................................    1,723,317        1,602,617
Production equipment........................................      120,031          127,736
Buildings and improvements..................................    2,483,556        2,418,182
Research and development laboratory equipment...............      840,259          812,734
Office furniture and equipment..............................      795,553          711,416
Leasehold improvements......................................      317,016          306,146
Construction in progress....................................      136,589                -
                                                             -------------    ------------
                                                                6,446,341        6,008,851
Less accumulated depreciation and amortization..............   (2,934,517)      (1,908,047)
                                                             -------------    -------------
                                                              $ 3,511,824      $ 4,100,804
</TABLE>

N O T E  5    B O R R O W I N G  A R R A N G E M E N T S

ADVANCES TO VINIFERA FROM MINORITY SHAREHOLDERS. In September 1999, certain
minority shareholders of Vinifera agreed to advance $519,000, interest-free, to
Vinifera. The amounts to be advanced are equal to the second installment payable
by the shareholders to Agritope under certain stock purchase agreements and they
are to be repaid to the shareholders on or before July 15, 2000. As of September
30, 1999, $180,616 of the total had been advanced to Vinifera and is included as
a current liability in the accompanying financial statements. The remaining
advances were made in October. See Note 6 for further details with respect to
the stock purchase agreements.

REVOLVING LINE OF CREDIT. In June 1999, Vinifera borrowed $1.1 million from a
commercial bank under a revolving line of credit. The proceeds were used to
finance inventory production and repay a $1 million line of credit advanced by
Agritope. The line provides for borrowings of up to $1.5 million, of which
$1,463,000 was outstanding as of September 30, 1999. It is secured by Vinifera's
inventories and accounts receivable and is guaranteed by one of Vinifera's
minority shareholders. The line bears interest at the prime rate (8.5% as of
September 30, 1999). It expires on May 1, 2000.

ACCOUNTS RECEIVABLE LINE OF CREDIT. In May 1999, Agritope entered into an
agreement with a commercial bank pursuant to which the bank will advance up to
$500,000 based on 80% of qualified and approved accounts receivable. The line of
credit bears interest at the rate of 2% per month and each advance carries an
administration fee of 0.65%. It expires on May 20, 2000. The Company has not
made any borrowings under the line.

                                       31

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A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  5    B O R R O W I N G  A R R A N G E M E N T S,  C O N T I N U E D

CONVERTIBLE NOTES. In November 1996, Epitope exchanged $3,380,000 principal
amount of Agritope convertible notes for 250,367 shares of common stock of
Epitope at a reduced exchange price of $13.50 per share. The exchange price had
previously been fixed at $19.53 per share. Accordingly, Agritope recognized a
charge to results of operations of $1,216,654 in the first quarter of fiscal
1997 representing the conversion expense. In conjunction with the exchange,
unamortized debt issuance costs of $86,134 related to such notes were recognized
as equity issuance costs during 1997. Concurrent with the note conversion,
Epitope made a $4,529,009 capital contribution to Agritope. On June 30, 1997,
Agritope paid in full the remaining $240,000 principal amount outstanding. Debt
issuance costs incurred in connection with the notes were included in other
assets and were being amortized over the five-year life of the notes.
Amortization expense of debt issuance costs for the year ended September 30,
1997 totaled $2,687. Debt issuance costs were fully amortized as of September
30, 1997.

N O T E  6    S T O C K H O L D E R S'   E Q U I T Y

STOCKHOLDER RIGHTS PLAN. In November 1997, Agritope adopted a Stockholders'
Rights Plan, which enables holders of Common Stock, under certain circumstances,
to purchase fractional shares of a series of preferred stock.

Each share of Common Stock includes the right to purchase (the "Right"), if and
when the Rights are exercisable, 1/1,000 of a share of Series B Junior
Participating Preferred Stock at an exercise price of $25. The exercise price
and the number of shares issuable upon exercise of the Rights are subject to
adjustment in certain cases to prevent dilution. The Rights are evidenced by the
Agritope Common certificates and are not exercisable, or transferable apart from
the Agritope Common, until 10 business days after (i) a person acquires 15% or
more of the Agritope Common; (ii) a person commences a tender offer which would
result in the ownership of 15% or more of the Agritope Common; or (iii) the
Agritope Board declares a person beneficially owning at least 10% of the
Agritope Common to be an Adverse Person (the "Rights Distribution Date"). In the
event any person becomes the beneficial owner of 15% or more of the Agritope
Common or the Agritope Board determines that a person is an Adverse Person, each
of the Rights (other than Rights held by the party triggering the Rights and
certain of their transferees, all of which will be voided) becomes a discount
right entitling the holder to acquire Agritope Common having a value equal to
twice the Right's exercise price. Vilmorin, Clause and Cie ("Vilmorin") will not
trigger the Stockholder Rights Plan if it acquires other Agritope securities
directly from Agritope or with the prior approval of the Agritope Board.

In the event Agritope is acquired in a merger or other business combination
transaction (including one in which Agritope is the surviving corporation), each
Right will entitle its holder to purchase, at the then current exercise price of
the Right, that number of shares of common stock of the surviving company which
at the time of such transaction would have a market value of two times the
exercise price of the Right. The Rights do not have any voting rights and are
redeemable, at the option of Agritope, at a price of $.01 per Right at any time
until 10 business days after a person acquires beneficial ownership of at least
15% of the Agritope Common. The Rights expire on November 14, 2007. So long as
the Rights are not separately transferable, Agritope will issue one Right with
each new share of Agritope Common issued.

COMMON STOCK. Cash and cash equivalents provided to Agritope by Epitope have
been reflected in additional paid-in capital. Also reflected in additional
paid-in capital are certain transactions in Epitope common stock. The exchange
of shares of Epitope common stock for Agritope convertible debt and the related
write-off of debt issuance costs have been reflected as Agritope additional
paid-in capital.

                                       32

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A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  6    S T O C K H O L D E R S'   E Q U I T Y,   C O N T I N U E D

EPITOPE STOCK PLAN GRANTS. As employees of a wholly owned subsidiary of Epitope,
the employees of Agritope and its subsidiaries participated in stock award,
employee stock purchase and other benefit plans of Epitope. Compensation expense
recognized for Epitope stock grants and awards to Agritope employees totaling
$53,895 in 1997 has been recognized as operating expenses and additional paid-in
capital of Agritope.

VINIFERA COMMON STOCK. In June 1999, Agritope entered into stock purchase
agreements with certain minority shareholders of Vinifera pursuant to which
minority ownership of Vinifera will increase from 36% to approximately 50% over
a three-year period. In a related transaction, also in June, Vinifera repaid the
$1 million balance on its working capital line of credit to Agritope and
replaced the line with a $1.5 million revolving bank line of credit that is
guaranteed by a minority shareholder. In July 1999, the minority shareholders
made the first purchases under the stock purchase agreements. Agritope received
proceeds totaling $873,836 and its ownership interest in Vinifera was reduced
from 64% to 57%. The gain on the first purchases amounted to $290,000 and is
included in other income.

In September 1999, the minority shareholders agreed to advance $519,000,
interest-free, to Vinifera, representing the second installment under the
agreements. The advances are to be repaid to the shareholders on or before July
15, 2000. As of September 30, 1999, $180,616 of the total had been advanced to
Vinifera and is included as a current liability in the accompanying financial
statements.

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

In January 1997, a minority shareholder in Vinifera contributed $100,000 to
Vinifera in satisfaction of a stock subscription agreement. In June 1997,
Agritope sold 770,000 shares of common stock of Vinifera to outside parties for
$1,540,000 in cash. In accordance with the terms of the related stock purchase
agreements, Agritope contributed the proceeds of these stock sales to Vinifera's
capital. These sales of previously issued shares of Vinifera common stock
reduced Agritope's percentage ownership of Vinifera voting stock from 76% to
61%.

WARRANTS TO PURCHASE COMMON STOCK. As of September 30, 1999, the following
warrants to purchase common stock were outstanding:

DATE OF ISSUANCE             SHARES       EXERCISE PRICE     EXPIRATION DATE
September 24, 1999......     125,000              $ 7.00     September 30, 2004
April 30, 1998..........      83,333              $ 7.34     December 30, 2000
December 30, 1997.......     500,000              $ 7.00     December 30, 2000
                             -------
                             708,333


                                       33
<PAGE>




A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  6    S T O C K H O L D E R S'   E Q U I T Y,   C O N T I N U E D

SERIES A PREFERRED STOCK. Agritope's board of directors has designated 1 million
shares of Agritope preferred stock, par value $.01 per share, as Series A
Preferred Stock ("Series A Preferred"). The Series A Preferred has preemptive
rights and the right to elect a director, but otherwise has rights substantially
equivalent to Agritope common stock and is convertible at any time into shares
of Agritope common stock on a share-for-share basis, subject to adjustment upon
the occurrence of certain events. In connection with a research agreement,
Vilmorin purchased 214,285 shares of Series A Preferred in 1998 at a price of $7
per share. See Note 8.

In September 1999, the Company completed a $2.5 million private placement of
500,000 shares of Series A Preferred Stock at a price of $5 per share. Vilmorin
purchased the shares. For every four shares of Series A Stock purchased in the
private placement, Vilmorin also received a warrant to purchase one additional
share of Series A Stock at a price of $7 per share at any time over the next
five years. The fair value of such warrants, $120,000, is included in "Preferred
stock issued in private placement" with a corresponding charge to "Equity
issuance costs" in the accompanying statement of stockholders equity. Each share
of Series A Stock is convertible into one share of Agritope Common Stock.
Vilmorin subsequently sold 150,000 shares of Series A Stock together with the
related warrants to an Israeli seed company, Hazera Quality Seeds
Ltd.("Hazera"), for $750,000. After completion of the sales, Vilmorin owned
564,285 shares of Series A Stock, or 11.8% of the outstanding capital stock of
Agritope. Hazera's holdings amounted to 3.1% of Agritope's outstanding capital
stock.

STOCK AWARD PLAN. In November 1997, the Agritope, Inc. 1997 Stock Award Plan
(the "Award Plan") was adopted by Agritope's board of directors and approved by
Epitope as Agritope's sole stockholder. The Award Plan provides for stock-based
awards to employees, outside directors, members of scientific advisory boards
and consultants. Awards that may be granted under the Award Plan include
incentive stock options, nonqualified stock options, stock appreciation rights,
restricted awards, performance awards and other stock-based awards. The Award
Plan provides for the issuance of a total of up to 2,000,000 shares of Agritope
common stock, subject to adjustment for changes in capitalization. Options for
291,897 shares were available for future grants under the Award Plan as of
September 30, 1999.

The following tables summarizes Award Plan activity (shares and weighted average
prices):
<TABLE>
<CAPTION>

                                                 1999                 1998
                                           SHARES     PRICE        SHARES     PRICE
<S>                                    <C>         <C>         <C>          <C>
Outstanding, beginning of period ...    1,255,264   $ 5.54              -    $    -
Granted ............................      509,439     2.80      1,422,664      5.51
Exercised ..........................            -        -              -         -
Canceled ...........................      (56,600)    5.91       (167,400)     5.31
                                          --------               ---------
Outstanding, end of period .........    1,708,103     4.70      1,255,264      5.54

Exercisable.........................      369,445     5.38         65,000      5.07
Weighted average fair value of options granted ..      .90                     3.68
</TABLE>

The amounts granted above include options granted to consultants in 1999 and
1998 covering 10,000 and 65,000 shares, respectively, at average exercise prices
of $2.00 and $5.07, respectively. In accordance with SFAS 123, Agritope
recognized compensation expense for these awards in 1999 and

                                       34

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A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  6    S T O C K H O L D E R S'   E Q U I T Y,   C O N T I N U E D

1998 totaling $7,500 and $81,000, respectively, based on the fair value of the
options as determined using the Black-Scholes method of valuation. With respect
to options granted in 1999 and 1998 to participants other than consultants,
Agritope will recognize compensation expense of $22,500 and $1,902,065,
respectively, representing discounts from market prices on date of grant, which
will be amortized over the vesting period of the options, in accordance with APB
25. Amortization in 1999 and 1998 amounted to $450,361 and $309,420,
respectively.

The following table summarizes information about stock options outstanding as of
September 30, 1999:
<TABLE>
<CAPTION>

                                     REMAINING       WEIGHTED                          WEIGHTED
                       SHARES      CONTRACT LIFE      AVERAGE           SHARES          AVERAGE
EXERCISE PRICE       OUTSTANDING     (YEARS)      EXERCISE PRICE     EXERCISABLE     EXERCISE PRICE
<S>                    <C>            <C>           <C>               <C>              <C>
$2.00 to $3.00....        381,939      9.02          $ 2.05             10,000          $ 2.00
$5.00 to $5.31....      1,155,164      7.99            5.24            307,693            5.24
$7.00.............        171,000      8.17            7.00             51,752            7.00
                        ---------                                     --------
                        1,708,103      8.24            4.70            369,445            5.38
</TABLE>

EMPLOYEE STOCK PURCHASE PLAN. Also in November 1997, Agritope's board of
directors and Epitope, as Agritope's sole stockholder, approved the Agritope,
Inc. 1997 Employee Stock Purchase Plan (the "Purchase Plan"), covering up to
250,000 shares of Agritope common stock which Agritope employees may subscribe
to purchase during offering periods to be established from time to time. The
Compensation Committee of Agritope's board of directors was granted authority to
determine the number of offering periods, the number of shares offered, and the
length of each period. No more than three offering periods (other than Special
Offering Subscriptions as defined in the Purchase Plan) may be set during each
fiscal year. The purchase price for stock purchased under the Purchase Plan is
the lesser of 85% of the fair market value of a share on the last trading day
before the offering date established for the offering period and 85% of the fair
market value of a share on the date the purchase period ends (or any earlier
purchase date provided for in the Purchase Plan). No offerings were made in the
year ended September 30, 1998. As of September 30, 1999, employees had
subscribed to purchase 43,053 shares over a 24-month period at an initial price
of $0.93 per share. During the year ended September 30, 1999, 754 shares, with a
weighted-average fair market value of $2.93 per share, were issued at a price of
$0.93 per share.

VINIFERA STOCK AWARD PLAN. In 1993, Vinifera adopted a stock award plan, which
was approved by Agritope as the sole shareholder of Vinifera. The plan provided
for issuance of options to purchase up to 2,000,000 shares of Vinifera common
stock. In 1993, Vinifera granted options to purchase 100,000 shares for $1.00
per share, a price equal to the market value as determined by Vinifera's board
of directors. No options were granted from 1994 until 1999. In 1999, Vinifera
granted options to purchase 525,000 shares for $1.50 per share, representing a
discount of $0.50 from the market price as determined by the board of directors.
As of September 30, 1999, options were outstanding to purchase 625,000 shares,
at a weighted-average price of $1.42, of which options on 231,250 shares were
exercisable, at a weighted-average price of $1.28. In accordance with APB 25,
Vinifera will recognize compensation expense of $262,500 over a three-year
vesting period. Amortization of such expense in 1999 amounted to $119,103.

                                       35

<PAGE>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  6    S T O C K H O L D E R S'   E Q U I T Y,   C O N T I N U E D

As required by SFAS 123, the Company has computed, for pro forma disclosure
purposes, the value of options granted and amortized over the vesting periods
using the Black-Scholes option pricing model. The assumptions used for stock
option grants were as follows:
<TABLE>
<CAPTION>

FOR THE YEAR ENDED SEPTEMBER 30                    1999              1998              1997
<S>                                               <C>                <C>                <C>
Risk-free interest rate.................            5%                 5%                -
Expected dividend yield.................            -                  -                 -
Expected life (years)...................            4                  4                 -
Expected volatility.....................           80%                55%                -
</TABLE>

The assumptions used for rights granted under the Employee Stock Purchase Plan
in 1999 were a risk-free interest rate of 5%, an expected dividend yield of
zero, an expected volatility of 80% and an expected life of 2 years.

If the Company had accounted for its stock-based compensation plans in
accordance with SFAS 123, the Company's net loss and net loss per share would
have increased as follows:
<TABLE>
<CAPTION>

FOR THE YEAR ENDED SEPTEMBER 30                    1999              1998               1997
<S>                                       <C>               <C>                <C>
Net loss:
As reported.............................   $ (4,675,406)     $ (5,243,967)      $ (8,690,599)
Pro forma...............................   $ (5,937,886)     $ (6,165,274)      $ (8,690,599)

Net loss per share:
As reported.............................        $ (1.15)         $ (1.42)          $ ( 3.23)
Pro forma...............................        $ (1.46)         $ (1.66)          $ ( 3.23)
</TABLE>

                                       36

<PAGE>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  7    I N C O M E   T A X E S

As of September 30, 1999, Agritope had net operating loss carryforwards of
approximately $41.8 million and $28.9 million to offset federal and Oregon state
taxable income, respectively. These net operating loss carryforwards will expire
if not used by Agritope, as follows:
YEAR OF EXPIRATION                                 FEDERAL       OREGON
2004..........................................   $ 111,000    $ 111,000
2005..........................................     317,000      317,000
2006..........................................     941,000      941,000
2007..........................................   2,620,000    2,620,000
2008..........................................   6,733,000    4,847,000
2009..........................................   8,327,000    2,179,000
2010..........................................   8,477,000    3,765,000
2011..........................................   2,249,000    2,168,000
2012..........................................   4,284,000    4,284,000
2018..........................................   3,856,000    3,856,000
2019..........................................   3,840,000    3,840,000
                                               -----------  -----------
Total......................................... $41,755,000  $28,928,000

Significant components of Agritope's deferred tax asset were as follows:
SEPTEMBER 30                                                1999           1998
Net operating loss carryforwards................... $ 16,158,000   $ 14,636,000
Deferred compensation..............................      784,000        631,000
Research and experimentation credit carryforwards..      542,000        522,000
Accrued expenses...................................      162,000        233,000
Other..............................................      667,000        630,000
                                                    ------------   ------------
Gross deferred tax assets..........................   18,313,000     16,652,000
Valuation allowance................................  (18,313,000)   (16,652,000)
                                                     ------------  -------------
Net deferred tax asset............................. $          -   $          -

No benefit for Agritope's deferred tax assets has been recognized in the
accompanying financial statements as they do not satisfy the recognition
criteria set forth in SFAS 109. The valuation allowance increased by $1.7
million in 1999. The research and experimentation tax credit carryforwards will
generally expire from 2004 through 2019 if not used by Agritope. Net operating
loss and tax credit carryforwards incurred by Agritope through the date of the
spin-off (see Note 1, The Company--Agritope Spin-off) continued as carryforwards
of Agritope after the date of distribution. The issuance of voting stock
following the spin-off may result in a change of ownership under federal tax
rules and regulations. Upon occurrence of such a change in ownership,
utilization of existing tax loss and tax credit carryforwards would be subject
to cumulative annual limitations.

The expected federal statutory tax benefit of $1.5 million for the year ended
September 30, 1999 increased by approximately $177,000 for the effect of state
and local taxes (net of federal impact), and decreased by approximately $1.7
million for the effect of the increase in valuation allowance, and by $6,000 for
permanent differences consisting primarily of meals and entertainment.

The consolidated financial statements include the financial results of Vinifera,
a 57% owned subsidiary (see Note 1). However, the tax disclosures above do not
include the deferred tax assets and related valuation allowance for Vinifera's
carryforwards since Vinifera is not included in the consolidated group for tax
purposes. Vinifera files its tax return separately on a stand-alone basis.

                                       37

<PAGE>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  8    R E S E A R C H   A N D   D E V E L O P M E N T
  A R R A N G E M E N T S

REVENUES. Revenues from research and development arrangements are included in
the accompanying consolidated statements of operations under the caption "Grants
and contracts." Expenses related to projects conducted under such arrangements
are included under the caption "Research and development costs." The activity
related to these arrangements is summarized as follows:
<TABLE>
<CAPTION>

YEAR ENDED SEPTEMBER 30                            1999              1998               1997
<S>                                         <C>               <C>               <C>
Government research grants................   $  313,876        $  206,974        $    30,228
Research projects with strategic partners.      734,216                 -             52,770
Other.....................................            -            17,714             31,694
                                          -------------      ------------         ----------
                                             $1,048,092        $  224,688         $  114,692

Project related expenses..................   $1,331,356        $  371,184         $  272,309
</TABLE>

NATIONAL INSTITUTES OF STANDARDS AND TECHNOLOGY. In October 1997, Agritope was
awarded a U.S. Department of Commerce matching grant totaling $990,022 through
the Advanced Technology Program of the National Institute of Standards and
Technology (NIST) and covering a three-year period. Agritope was awarded the
grant for use in the application of its proprietary ripening control technology
to certain tree fruits and bananas. Under terms of the grant, the NIST
reimburses Agritope for 49% of direct costs incurred for the projects. As of
September 30, 1999, $ 245,558 was available for future reimbursement under the
grant.

VILMORIN. On December 5, 1997, Agritope and Vilmorin entered into a research and
development agreement covering certain vegetable and flower crops. Under the
terms of the research agreement, Vilmorin will provide certain proprietary seed
varieties and germplasm for use by Agritope in research and development projects
to be funded by Vilmorin, in which Agritope technology, and possibly Vilmorin
technology, will be applied to the various covered crops. The specific research
projects to be conducted will be determined by agreement of the parties. Unless
otherwise agreed, Vilmorin will pay, on a quarterly basis, all of Agritope's
out-of-pocket expenses, including employee salaries and overhead, for each
selected research project.

Agritope and Vilmorin have agreed to negotiate in good faith the terms of future
commercialization agreements applicable to any commercial-stage products that
arise out of Vilmorin-funded research. If the parties are unable to agree,
commercialization terms will be determined by binding arbitration.

Vilmorin also agreed to provide additional funding totaling $1 million through
the financing of research and development projects over a three-year period. As
of September 30, 1999, Vilmorin had committed $298,607 to fund specified
projects which are planned to be completed by June 2000. Agritope earned
revenues of $497,800 for work completed for the Vilmorin projects in 1999. No
revenues were earned in 1998 with respect to such projects.

                                       38

<PAGE>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  8    R E S E A R C H   A N D   D E V E L O P M E N T
  A R R A N G E M E N T S,   C O N T I N U E D

AGRINOMICS LLC. In July 1999, Agritope and Aventis CropScience S.A. ("Aventis
CropScience") formed Agrinomics LLC ("Agrinomics") to conduct a research,
development and commercialization program in the field of agricultural
functional genomics. Agritope owns a 50% interest in Agrinomics and Aventis
CropScience owns the remaining 50% interest. Aventis CropScience has agreed to
make capital contributions in cash totaling $20 million over a five-year period,
of which $5 million was contributed in 1999. Agritope contributed certain
technology and a collection of seed generated using such technology. Agritope
and Aventis CropScience will also perform research work at their respective
facilities. In 1999, Agritope earned revenues of $236,416 for work performed for
Agrinomics. The technology contributed to Agrinomics by Agritope had a zero
basis for financial reporting purposes. Accordingly, Agritope has recorded its
investment in Agrinomics as zero and will not include in its consolidated
financial statements its proportionate share of the results of operations of
Agrinomics until such time that Agritope makes capital contributions to
Agrinomics, if ever. Summarized financial information for Agrinomics is as
follows:

FINANCIAL POSITION AS OF SEPTEMBER 30, 1999
Assets
Current Assets
Cash and marketable securities............................     $4,784,798
Other accounts receivable.................................         16,404
                                                              -----------
                                                                4,801,202

Property, plant and equipment.............................        142,940
                                                               ----------
Total assets............................................      $ 4,944,142

Liabilities and Members' Equity
Accounts payable, including 119,088 payable to Agritope...    $   180,682
Members' equity...........................................      4,763,460
                                                                ---------
Total liabilities and members' equity.....................    $ 4,944,142

OPERATING RESULTS FOR THE PERIOD FROM INCEPTION, JULY 1, 1999,
 THROUGH SEPTEMBER 30, 1999
Operating expenses
Research and development..................................    $   242,369
Administration............................................         17,037
                                                                 --------
                                                                  259,406
Interest earned...........................................         22,866
                                                                 --------
Net loss..................................................    $  (236,540)


                                       39
<PAGE>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  9    C O M M I T M E N T S   A N D   C O N T I N G E N C I E S

Agritope leases office space and Vinifera leases office and greenhouse
facilities under operating lease agreements, which require minimum annual
payments as follows:

YEAR ENDING SEPTEMBER 30
2000     ...................................................     $535,860
2001     ...................................................      544,936
2002     ...................................................      560,048
2003     ...................................................      326,140
2004     ...................................................       90,500

Rent expense was $514,762, $556,717, and $326,388, for 1999, 1998 and 1997,
respectively.

Agritope is also contingently liable for a lease that has been assigned to UAF
which requires payments totaling $55,701 for the year ending September 30, 2000.
During 1997, the Company accrued its contingent obligation under these leases as
both UAF and Petals have defaulted on the related subleases. The corresponding
charge of $744,109 is included in "Other, net" under the caption "Other income
(expense), net" in the accompanying consolidated statements of operations for
1997.

N O T E  10    P R O F I T   S H A R I N G   A N D   S A V I N G S   P L A N S

EMPLOYEE STOCK OWNERSHIP PLAN. Agritope's board of directors adopted the
Agritope, Inc. Employee Stock Ownership Plan ("ESOP") in November 1997. After
the spin-off, all employees, except excluded classes, of Agritope and those of
its affiliates that elect to participate, were eligible to participate in the
ESOP. The employers' contribution to the ESOP each year, if any, will be
determined by the Agritope board of directors, and may be made either in
Agritope common stock or in cash. Contributions will be allocated to
participants in proportion to their compensation. Contributions vest based on
years of service over the first six years of employment, or upon the
participant's earlier death, disability, or attainment of age 65.
To date, no contributions have been declared.

401(K) PROFIT SHARING PLAN. Agritope established the Agritope, Inc. 401(k)
Profit Sharing Plan (the "401(k) Plan") in November 1997. All employees
(including officers), other than excluded classes, are eligible to participate.
Participants may contribute up to 17% of their cash compensation on a before-tax
basis, subject to an annual maximum amount that is adjusted for the cost of
living ($10,000 for 1999). The first 5% of a participant's compensation is
eligible for a discretionary, pro-rata employer matching contribution which will
be invested in Agritope common stock. Matching contributions vest based on years
of service over the first six years of employment, or upon the participant's
earlier death, disability, or attainment of age 65. In 1999 and 1998, Agritope
made contributions of $40,456 and $40,502, respectively to the 401(k) Plan. The
401(k) plan holds 38,155 shares of Agritope common stock as of September 30,
1999.

EPITOPE 401(K) PROFIT SHARING PLAN. Epitope established a profit sharing and
deferred salary savings plan in 1986 and restated the plan in 1991. All Agritope
employees were eligible to participate in the plan prior to the date of the spin
off. During 1998 and 1997, respectively, Agritope was charged $8,196 and $33,063
by Epitope for its share of the matching contribution under the plan.

                                       40

<PAGE>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  11    S E G M E N T   I N F O R M A T I O N

In 1999, Agritope adopted Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS
131"). Under SFAS 131, segments are defined as components of an enterprise about
which separate financial information is available that is evaluated regularly by
the chief operating decision maker, or decision-making group, in deciding how to
allocate resources and in assessing performance. Agritope's chief operating
decision-maker is the chief executive officer.

Agritope is organized into two segments: The Research and Development segment
develops improved plant products and provides technology to the agricultural
industry. The Grapevine Propagation segment, operated by Vinifera, propagates,
grows and distributes grapevine plants to the premium wine industry. It also
provides disease testing and elimination services.

The accounting policies of the segments are the same as those described in Note
2, Summary of Significant Accounting Policies. The Company has no revenues
outside the United States. For information as to major customers, see Note 2
"Major Customer". Selected segment information is presented in the tables below:

<TABLE>
<CAPTION>

                                           RESEARCH AND         GRAPEVINE
                                            DEVELOPMENT       PROPAGATION              TOTAL
YEAR ENDED SEPTEMBER 30, 1999
<S>                                        <C>               <C>                <C>
Revenues from external sources..........    $ 1,048,092       $ 2,503,377        $ 3,551,469
Intersegment revenues...................        180,296          (180,296)                 -

Operating loss..........................     (4,517,213)       (1,055,465)        (5,572,678)
Intersegment interest income (expense)..         40,288           (40,288)                 -
Interest income.........................        102,543               199            102,742
Interest expense........................           ( 27)          (21,419)           (21,446)
Other income (expense)..................              -           166,365            166,365
Segment loss............................     (4,374,409)         (950,608)        (5,325,017)

Depreciation and amortization...........        669,672           638,265          1,307,937
Expenditures for long-lived assets......        600,416           331,666            932,082
Segment assets..........................      7,529,966         7,941,216         15,471,182

YEAR ENDED SEPTEMBER 30, 1998
Revenues from external sources..........    $   224,688       $ 2,574,976        $ 2,799,664
Intersegment revenues...................         70,869           (70,869)                 -

Operating loss..........................     (4,271,627)       (1,952,813)        (6,224,440)
Intersegment interest income (expense)..        271,612          (271,612)                 -
Interest income.........................        224,350                 -            224,350
Interest expense........................              -            (1,248)            (1,248)
Other income (expense)..................          6,450          (131,502)          (125,052)
Segment loss............................     (3,769,215)       (2,357,175)        (6,126,390)

Depreciation and amortization...........        442,826           508,383            951,209
Expenditures for long-lived assets......      1,903,973           869,645          2,773,618
Segment assets..........................      7,395,950         6,994,376         14,390,326

</TABLE>
                                                         41

<PAGE>


A G R I T O P E ,  I N C .   A N D   S U B S I D I A R I E S

N O T E S  TO  C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

N O T E  11    S E G M E N T  I N F O R M A T I O N,   C O N T I N U E D
<TABLE>
<CAPTION>

                                           RESEARCH AND         GRAPEVINE
                                            DEVELOPMENT       PROPAGATION              TOTAL
YEAR ENDED SEPTEMBER 30, 1997
<S>                                       <C>               <C>                  <C>
Revenues from external sources..........   $    114,692      $  1,436,498         $1,551,190
Intersegment revenues...................         52,217           (52,217)                 -

Operating loss..........................     (3,590,916)         (946,777)        (4,537,693)
Intersegment interest income (expense)..        231,757          (231,757)                 -
Interest income.........................              -                 -                  -
Interest expense........................       ( 24,457)             (850)           (25,307)
Other income (expense)..................              -            (1,716)            (1,716)
Segment loss............................     (3,383,616)       (1,181,100)        (4,564,716)

Depreciation and amortization...........        280,487           286,326            566,813
Expenditures for long-lived assets......      1,042,102         1,756,017          2,798,119
Segment assets..........................      2,069,629         5,215,426          7,285,055

RECONCILIATION OF LOSSES. The following table reconciles segment losses to
consolidated net loss:

YEAR ENDED SEPTEMBER 30.................           1999              1998               1997
Segment losses..........................   $ (5,325,017)     $ (6,126,390)      $ (4,564,716)
Gain on sale of stock of Vinifera.......        289,603                 -                  -
Minority interest in Vinifera losses....        360,008           882,423            274,369
Valuation loss..........................              -                 -         (2,258,080)
Debt conversion.........................              -                 -         (1,216,654)
Other, net..............................              -                 -           (925,518)
                                        ----------------     ------------      --------------
Net loss................................   $ (4,675,406)     $ (5,243,967)      $ (8,690,599)

</TABLE>
                                                             42
<PAGE>


                                   SIGNATURES
 ....Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized.

                                        AGRITOPE, INC.
                                     By /s/ GILBERT N. MILLER
                                        --------------------------------------
                                        Gilbert N. Miller
                                        Executive Vice President and
                                        Chief Financial Officer

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

December 29, 1999                       /s/ ADOLPH J. FERRO
-----------------                       ---------------------------------------
Date                                    Adolph J. Ferro
                                        Chairman, President, Chief Executive
                                        Officer
                                        (PRINCIPAL EXECUTIVE OFFICER)

December 29, 1999                       /s/ GILBERT N. MILLER
-----------------                       ---------------------------------------
Date                                    Gilbert N. Miller
                                        Executive Vice President, Chief
                                        Financial Officer  and Director
                                        (PRINCIPAL FINANCIAL AND ACCOUNTING
                                         OFFICER)

December 29, 1999                       /s/ W. CHARLES. ARMSTRONG *
-----------------                       ---------------------------------------
Date                                    W. Charles Armstrong
                                        Director

December 29, 1999                       /s/ MICHEL de BEAUMONT *
-----------------                       ---------------------------------------
Date                                    Michel de Beaumont
                                        Director

December 29, 1999                       /s/ NANCY L. BUC *
-----------------                       ---------------------------------------
Date                                    Nancy L. Buc
                                        Director

December 29, 1999                       /s/ JAMES T. KING*
-----------------                       ---------------------------------------
Date                                    James T. King
                                        Director

December 29, 1999                       /s/ PIERRE LEFEBVRE*
-----------------                       ---------------------------------------
Date                                    Pierre Lefebvre
                                        Director

December 29, 1999                       /s/ ROGER L. PRINGLE *
-----------------                       ---------------------------------------
Date                                    Roger L. Pringle
                                        Director


                                   *By  /s/ GILBERT N. MILLER
                                        ---------------------------------------
                                        Gilbert N. Miller
                                       (Attorney-in-Fact)



                                       43


<PAGE>

EXHIBIT INDEX
NUMBER   DESCRIPTION

2.*      Separation Agreement between Epitope, Inc. ("Epitope"),  and Agritope,
         Inc. ("Agritope"), dated as of December 1, 1997.

3.1*     Certificate of Incorporation of Agritope.

3.2*     Bylaws of Agritope.

3.3*     Certificate  of  Designation,  Preferences  and  Rights  of  the Series
         A Preferred Stock.

4.1*     Form of Common Stock Certificate.

4.2*     Form of Rights Agreement  between Agritope and ChaseMellon  Shareholder
         Services,  L.L.C.,  as Rights  Agent,  which  includes as Exhibit A the
         Designation  of Terms of the  Series B Junior  Participating  Preferred
         Stock and as Exhibit B the form of Rights Certificate, as amended.

4.3*     Form of stock  purchase  agreement in connection  with the Regulation S
         Sale.

4.4*     Preferred  Stock  Purchase  Agreement   between   Agritope and Vilmorin
         dated December 5, 1997.

10.1*    Transition  Services  and  Facilities  Agreement  between  Epitope  and
         Agritope, dated as of December 1, 1997.

10.2*    Tax  Allocation  Agreement  between  Epitope and Agritope,  dated as of
         December 1, 1997.

10.3*    Amended and Restated  Employee  Benefits  Agreement between Epitope and
         Agritope, dated as of December 19, 1997.****

10.4*    Agritope, Inc. 1997 Stock Award Plan.****

10.5*    Agritope, Inc. 1997 Employee Stock Purchase Plan.****

10.6*    Form of Employment Agreement between  Agritope  and  Adolph  J.  Ferro,
         Ph.D.****

10.7*    Form of Employment Agreement between Agritope and Gilbert N.
         Miller.****

10.8**   Form   of   Employment   Agreement   between   Agritope   and   D.   Ry
         Wagner.****

10.9*    Form of Employment Agreement between Agritope and Matthew G.
         Kramer.****

10.10*   Employment Agreement between Vinifera, Inc. and Joseph A.
         Bouckaert.****

10.11*   Form of Indemnification Agreement for directors.

10.12*   Form of Indemnification Agreement for officers.

10.13*   Lease of Land and Certain  Improvements  located at 4288 Bodega  Avenue
         entered into by and between Gianni Neve and Maria Neve,  Landlord,  and
         Vinifera, Inc., Tenant, dated as of February 1, 1996.

10.14*   Option to License  and  Research  Support  Agreement  between  the Salk
         Institute for  Biological  Studies and Epitope dated February 25, 1997,
         including  Amendment  dated  July  25,  1997,  and  Assignment  between
         Agritope and Epitope.

10.15*   Superior Tomato Associates,  L.L.C.  Operating Agreement dated February
         19, 1996,  including  Assignment and Assumption  Agreement  between the
         Company and Andrew and Williamson Sales, Co.

10.16*   Form of Restated  Placement Agent Agreement  between American  Equities
         Overseas Inc., and Agritope.

10.17**  Form of Warrant  Agreement to be issued to Vector Securities in partial
         consideration for services in connection with the Distribution.

10.18*   Form of Warrant  Agreement  issued in connection  with the Regulation S
         Sale.
<PAGE>

10.19*   Research and Development Agreement between Agritope and Vilmorin & Cie,
         dated as of December 5, 1997.

10.20*   Assignment  and  Modification  of Lease  dated  November  7, 1997 among
         Pacific Realty Associates, L.P. ("Pacific"),  American Show Management,
         Inc. ("ASM"), and Agritope, Lease Amendment dated June 3, 1996, between
         Pacific and ASM, and Lease dated October 4, 1995,  between  Pacific and
         ASM.

10.21*** Limited Liability Company Agreement of Agrinomics LLC, dated as of July
         1,  1999,  among  Agritope,   ACTTAG,   Inc.,  a  Delaware  corporation
         ("ACTTAG"), and RP Ag.

10.22*** Research and  Management  Contract,  dated as of July 1, 1999,  between
         Agritope and Agrinomics.

10.23*** Assignment and Assumption  Agreement and Bill of Sale, dated as of July
         15, 1999, between ACTTAG and Agrinomics.

10.24*** Research  Contract  and  License  Agreement,  dated as of July 1, 1999,
         between RP Ag and Agrinomics.

10.25*** Research,  License and Option Agreement,  dated as of October 23, 1998,
         as amended and restated as of July 14, 1999, between The Salk Institute
         for  Biological   Studies,   a  California   nonprofit  public  benefit
         corporation, and Agritope.

10.26*** Assignment and Assumption  Agreement and Bill of Sale, dated as of July
         5, 1999, between ACTTAG and Agritope.

10.27*** Research and Option to License Agreement, dated as of January 21, 1999,
         between  the  University  Court of the  University  of  Edinburgh,  and
         Agritope.

10.28    Commercial  Lease with Option to Purchase  dated March 25, 1999 between
         Louis Neve, Lessor, and Vinifera, Inc. Lessee.

10.29    Lease   Amendment  dated  September  8,  1999  between  Pacific  Realty
         Associates, L.P., Landlord, and Agritope, Tenant.

10.30    Amended and Restated Unit Purchase  Agreement dated September 16, 1999,
         between Vilmorin Clause & Cie, Purchaser, and Agritope.

10.31    Form  of  Stock  Purchase  Agreement  among,  Agritope,   Vinifera  and
         Purchasers dated June 1, 1999.

10.32    First  Amendment  to  Lease of Land and  Improvements  Located  at 4288
         Bodega Avenue Dated April 27, 1999 by and between Gianni Neve and Maria
         Neve, collectively, Landlord and Vinifera, Tenant.

10.33    Vinifera, Inc. 1993 Stock  Award Plan  dated March 9, 1993.****

10.34    Revolving  Line of  Credit Note dated May 15, 1999 to Wells  Fargo Bank
         National Association by Henry Wendt and Vinifera, Inc.

10.35    Addendum to Promissory  Note  dated  May 15, 1999  to Wells  Fargo Bank
         National Association by Henry Wendt and Vinifera, Inc.

10.36    Continuing  Security  Agreement  Rights to Payment and Inventory  dated
         May 15, 1999 to Wells Fargo Bank National Association by Vinifera, Inc.

10.37    Accounts  Receivable  Purchase  Agreement dated  May  20, 1999  between
         Silicon Valley Bank and Agritope, Inc.

21.1     List of Subsidiaries.

23.1     Consent of Arthur Andersen LLP.

23.2     Consent of PricewaterhouseCoopers LLP.

24.1     Power of Attorney for W. Charles Armstrong, Michel de Beaumont, James
         T. King, and Roger L. Pringle.

24.4     Power of Attorney for Nancy L. Buc.

24.5     Power of Attorney for Pierre LeFebvre.

27       Financial Data Schedule.
<PAGE>

99       Certain  Factors   to   Consider  in  Connection  with  Forward-Looking
         Statements.

- -----------------

Other exhibits listed in Item 601 of Regulation S-K are not applicable.

*     Incorporated by reference to Registrant's  Registration  Statement on Form
      S-1 (No. 333-34597).

**    Incorporated  by  reference  to  Registrant's  Annual Report on Form  10-K
      dated September 30, 1998.

***   Incorporated by  reference to Registrant's Current  Report  on  Form 8-K/A
      dated  July  20, 1999.   Confidential  Treatment  Requested;  the  omitted
      material has  been  separately  filed  with the  Securities  and  Exchange
      Commission.

****  Compensatory plans or agreements.