U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON , D.C.  20549
Form 10-KSBA-1
(Mark One)         
              [ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934 [Fee Required] 

              For the fiscal year ended December 31,1997

              [  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
              
Commission file number 0-12183 
              
AN-CON GENETICS INC.
(Name of small business issuer in its charter)
Delaware                                  11-2644611
(State or other jurisdiction            (IRS Employer
of incorporation or organization)        Identification No.)

734 Walt Whitman Road, Melville, NY 11747
(Address of principal executive offices) (Zip Code)

Issuer's telephone number (516) 421-5452

Securities registered under Section 12(b) of the Exchange Act:

Title of each class  Name of each exchange on which registered
     N/A       

Securities registered under Section 12(g) of the Exchange Act:
Common                           
(Title of class)

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

Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no
disclosure will 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-KSB any amendment to this Form
10-KSB. [ X ]

Issuer's revenues for its most recent fiscal year were $7,371,281

The aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of April 3,1998 was
$17,396,732.

(INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
N/A




(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date  13,279,948.

DOCUMENTS INCORPORATED BY REFERENCE

There are no documents incorporated by reference.














An-Con Genetics, Inc.
1997 Form 10-KSB Annual Report


Table of Contents



Part I

Item         1.   Description of Business                      

Item         2.   Properties                                   

Item         3.   Legal Proceedings                            

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


Part II
Item         5.   Markets and Market Prices                    

Item         6.   Managements Discussion and Analysis          

Item         7.   Financial Statements   (See Financial Section)

Item         8.   Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure       


Part III

Item         9.   Directors, Executive Officers, Promoters 
                  and Control Persons                          

Item         10.  Remuneration                                 

Item         11.  Security Ownership of Certain Beneficial Owners
                  and Management of An-Con                     

Item         12.  Certain Relationships and Related Transactions     

Item         13.  Exhibits and Reports on Form 8-k             

<PAGE>
AN-CON GENETICS, INC.

Item 1.   Description of Business.

Background

An-Con Genetics, Inc. ("the Company") was incorporated in 1982, under
the laws of the State of Delaware and has its principal executive
office at 734 Walt Whitman Road, Melville, New York 11747.

Currently, the Company is actively engaged in the business of
manufacturing and marketing medical products and developing related
technologies.

On January 11, 1995 the Company acquired a 100% ownership interest in
Aaron Medical Industries, Inc. ("Aaron") a St. Petersburg, Florida
based Company engaged in the manufacturing and distributing of medical
products.

Although, Aaron's largest current product line is battery operated
cauteries,  the Company has shifted its focus to the manufacture and
marketing of electrosurgical generators and electrosurgical
disposables.   This new focus is evidence in the development of the
Aaron 800 and 1200 electrosurgical generators (see below).

Aaron also manufactures a variety of specialty lighting instruments
for use in ophthalmology, general surgery, hip replacement surgery,
and for the placement of endotracheal tubes.  An industrial version of
this light is distributed through a large automotive tool distributor,
and various retail outlets and stores.

Aaron manufactures and sells its products under the Aaron label to
distributors worldwide and also private labels.  Additionally, Aaron
has many Original Equipment Manufacturing (OEM) agreements with other
medical device manufacturers.  These OEM arrangements combined with
private label and the Aaron label allow the Company to gain greater
market share for the distribution of its products.
 
Licensed Products
OmniFix II

The Company is the holder of a U.S. license to manufacture and market
OmniFix II which is formulated to replace formaldehyde in hospital and
clinical pathology laboratories.

The Company is currently seeking a joint venture partner or
sublicensee to market and sell this product and is engaged in
minimal marketing efforts.

New Company Products

Aaron 1200 

Aaron has developed a 120 watt full featured electrosurgical generator
for outpatient surgical procedures for use in a variety of fields
including dermatology, gynecology, and plastic surgery.


Aaron 800

The Aaron 800 is a low powered office based generator designed
primarily for dermatology.  The unit is a 30 watt high frequency
desiccator used mainly for removing small skin lesions and growths in
the doctor's office.  This unit was designed with sufficient base
technology to move towards manufacturing more powerful office based
generators without requiring the additional time consuming expense of
total redesign.  Sales in 1997 totaled in excess of $650,000.


Electrosurgical Products

The Company's subsidiary, Aaron, continues to expand its line of
Electrosurgical products.  Electrosurgical products include
electrodes, electrosurgical pencils, and various ancillary disposable
products.  Electrosurgical products are used in surgery for the
cutting and coagulation of tissues.  Aaron's electrosurgical products
are compatible with all major manufacturers' electrosurgical generator
products.

Battery Operated Cauteries

Aaron's largest current product line is battery operated cauteries. 
Cauteries were originally designed for precise hemostasis (to stop
bleeding) in ophthalmology.  The current use of cauteries has been
substantially expanded to include sculpting woven grafts in bypass
surgery, vasectomies, evacuation of subungual hematoma (smashed
fingernail) and for stopping bleeding in many types of surgery. 
Battery operated cauteries were originally designed, and are still
primarily delivered, as a sterile one time use product in the USA. 
The company manufactures more types of cauteries than any other
company in the world at its facility in St. Petersburg.  The Company
also manufactures a line of replaceable battery and tip cauteries,
which are popular in overseas markets.
 
Battery operated Medical and Industrial Lights

Aaron, manufactures a variety of specialty lighting instruments for
use in ophthalmology as well as patented flexible lighting instruments
for general surgery, hip replacement surgery and for the  placement of
endotracheal tubes in emergency situations and prior to surgery.  The
lighting instruments have also  been adapted  for commercial and
industrial use.  The industrial lighting instruments are sold to
automotive mechanics through Companies such as Snap On Tools, MAC and
Matco.

Nerve Locator Stimulator

Aaron  manufactures three different nerve locator stimulators which
are primarily used for identifying motor nerves in hand and facial
reconstructive surgery.  These nerve locator stimulators are self
contained, battery operated units, which are used for a single
surgical procedure.  The company has a patent on the Neuro Pulse II
which has a pulsing variable design.

Multi-Function Cautery

The Multi-Function Cautery (MFC) is a patented device, developed by a
group of California surgeons, and acquired by An-Con for Aaron.  The
device combines, in one instrument, the capability for the surgeon to
cut and/or coagulate, while simultaneously evacuating the smoke
associated with electrosurgery and to remove fluids from the surgical
site.  The procedure is accompliced with one hand and without
assistance.  

Resistick    

The Company has discontinued its Resistick line of reduced stick
electrodes used in electrosurgery.  

The reduced stick electrode market is dominated by MegaDyne Medical
Products, Inc. which is believed by management to virtually control
the entire existing market. 

The discontinuance of Resistick sales is a result of the settlement by
Aaron with MegaDyne in a suit against Aaron for patent infringement. 
See legal proceedings and subsequent events in the financial
statement.


Manufacturing, Marketing and Distribution

The Company manufactures the majority of its products on its premises
in St. Petersburg, Florida.  Labor intensive sub-assemblies and labor
intensive products may be out-sourced to the Company's specification
offshore.  The Company markets its products through national trade
journal advertising, direct mail, distributor sales representatives
and trade shows.  Aaron markets its products through general and
specialty distributors across the country  under both the Aaron name
and private label.  Some of Aaron's major distributors are Allegiance,
Bergen Brunswig Medical, Burrows, McKesson, General Medical, Owens &
Minor, and Physician Sales & Service.  



Competition

The medical device industry is highly competitive. The Company's
competitors in this field are well established, do a substantial
amount of business, and have greater financial resources and
facilities than the Company.

Aaron's main competitors are Conmed in the electrosurgery market and
Xomed in the battery operated cautery market.  Management believes,
based upon recent developments that the Company has the ability to
aggressively compete in these markets.

Regulation

Many medical products are subject to guidelines, regulations and
testing requirements by federal and state authorities including the
Food and Drug Administration ("the FDA").  In the United States, the
FDA imposes standards which may affect the clinical testing,
manufacture and marketing of certain products.  Compliance with the
standards and requirements involving product safety, efficacy and
labeling may prove to be very expensive and time consuming.  No
assurance can be given that the regulatory authorities will render the
requisite approval of the marketing of some of the products that the
Company plans to market.  Other countries usually impose regulatory
requirements concerning  the development, testing, marketing and
manufacture of certain products which influence the overseas sales
potential of these products.  

In June, 1995 pursuant to an inspection of the facilities of the
Company's subsidiary Aaron, the FDA issued a warning letter advising
of federal good manufacturing practices ("GMP") deficiencies.  On July
12, 1995, the FDA indicated that while the Company's response appeared
adequate, further verification was needed before the FDA would be in a
position to support the approval of any pending pre-market
submissions, or related Export Certificates for the Company's
products.  After follow-up correspondence, on December 15, 1995, the
FDA acknowledged that the Company's corrective action plan dated
November 27, 1995, appeared adequate.  However, the FDA determined
that it was necessary to set another evaluation date for May, 1996 to
ascertain whether the Company was meeting GMP guidelines.  This date
was extended to March 1997 when the FDA made its inspection.

The Company received clearance in 1997 to submit its new product FDA
applications.

Patents and Trademarks

The Company owns a total of fourteen patents. No assurance can be
given that competitors will not infringe the Company's patent rights
or otherwise create similar competing products that are technically
patentable in there own right. (see competition) 

Liability Insurance.

Management believes that general and product liability exposures are
adequately covered by insurance.

Research and Development

The approximate amount expended by the Company on research and Aaron
products during the years 1997 and 1996  totaled $96,738 and $105,681,
respectively.  The Company has not incurred any direct costs relating
to environmental regulations or requirements.  

Employees

In January 1995 the Company acquired Aaron which then 
gave the Company approximately 60 employees. Presently the Company has 
a total of approximately 80 employees.  These consist of 5 executives,
6 administrative, 5 sales, and 64 technical or factory employees.  The
Company employs an unsalaried Vice-President for Far Eastern affairs.


SIGNIFICANT SUBSIDIARY - AARON MEDICAL INDUSTRIES, INC.

The shareholders of Aaron Medical Industries, Inc., a Florida
Corporation, agreed to exchange all of the outstanding shares of Aaron
for shares of An-Con and upon issuance, the shares deliverable to
Aaron shareholders would constitute 49% of an agreed amount of
outstanding shares of An-Con Genetics, Inc.  The Acquisition was
consummated as of January 11, 1995 and 99% of Aaron shareholders, in
the quarter of 1996, rejected a cash offer for their Aaron shares and
accepted the An-Con shares.  The transaction with Aaron is accounted
for as a purchase for financial accounting purposes and as of the date
hereof, Aaron is a 100% wholly owned subsidiary of An-Con.

Background

Aaron Medical Industries, Inc., is a Florida Corporation with offices
and manufacturing facilities in St. Petersburg, Florida. It is
principally engaged in the
business of manufacturing and marketing medical products.  Aaron
manufactures and sells its products under its own label to 
distributors worldwide.  Additionally, Aaron has contracts with
hospital group purchasing organizations such as Amerinet, Medecon,
Magnet, and Purchase Connection.




           RECENT ACQUISITIONS BY AARON



Item 2.   Properties.

The Company had moved its executive offices to the Aaron facility
located at 7100 30th Avenue N., St. Petersburg, Florida 33710-2902,
during the first quarter of 1995.  
The Company has additional executive office space at 734 Walt Whitman
Road, Melville, which it leases for $1,226.83 per month.  The lease
runs through the year 2000.

As part of the purchase of 7100 30th Avenue North, St. Petersburg,
Florida (manufacturing facility) the seller acknowledged it had
previously conducted assessments to document environmental conditions
existing on the property, the results of which are set forth in a June
23, 1994 Contamination Assessment Report (CAR) and a January 27, 1995
Contamination Assessment Addendum (CARA).  The Florida Department of
Environmental Protection (FDEP)stated in a letter, dated March 31,
1995, that based on their review of the CARA, the CAR could not be
approved and that additional work was needed to be performed.

In February of 1998, the environmental engineering firm Geo-Ambient
conducted a second addendum to the CAR, (CAR Addendum II) to complete
the additional work requested by the FDEP.  Based on the results of
CAR Addendum II, Geo-Ambient recommended to the FDEP that a "no
further action" status be granted for the site.  However, as of the
date of filing the FDEP has not yet issued a Site Completion
Rehabilitation Order (SCRO). 

Based on the "no further action" finding by Geo-Ambient and the
anticipated issuance of an SCRO by the FDEP management of An-Con has
estimated the present value of the cost of environmental work to be
zero.


Item 3.   Legal Proceedings

Speiser

On December 29, 1992, Robert Speiser, the then Chief Executive Officer
of An-Con, obtained a Confession of Judgment in the Supreme Court,
State of New York, Counties of Suffolk and Westchester for amounts due
on loans to the Company of $92,239 and $190,957 inclusive of interest
at 12% to May 27, 1992 and 9% thereafter.   These loans represent
amounts claimed by Mr. Speiser to have been expended on behalf of the
Company and funds loaned to the Company.  As reported to the Board of
Directors, of which Mr. Speiser was Chairman, Mr. Speiser's actions
were motivated solely to deter threatened action by the landlord to
file a judgment at that time of $41,700 in rental arrears on the then 
Melville, NY lease.  

Mr. Speiser has indicated that he does not intend to enforce this
judgment.  On March 29, 1993 and in subsequent letters of instruction
to the Sheriff of Suffolk County, Mr. Speiser requested that the
execution of the above-mentioned judgments be held in abeyance for a
60 day period, until August 30, 1993.  On February 28, 1994, the
executive order expired.  As of December 31, 1997, the Company had
repaid $235,100 of the principal amount upon which the aforesaid
judgments were based.  

See "Certain Relationships and Related Transactions".  The Company is
presently trying to settle Mr. Speiser's claim.

In February 1998 the Company settled its patent infringement lawsuit
with MegaDyne by payment of  $150,000 and a pledge not to sell coated
blades in the electrosurgical market for six months.

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

No Meeting of the Shareholders was held during 1997.



PART II

Item 5.

Markets and Market Prices

An-Con's common stock is traded in the over-the-counter 
market on the National Associations of Securities Dealers, Inc.
Bulletin Board ("NASD Bulletin Board").  The table shows the reported
high and low bid prices for the common stock during each quarter of
the last eight quarters as reported by the NASD Bulletin Board (symbol
"AGNT").  These Prices do not represent actual transactions and do not
include retail markups, mark-downs or commissions.

                             High      Low

      1997

      1st Quarter            1 5/16    1

      2nd Quarter            1 1/8     11/16

      3rd Quarter            2 1/32    9/16

      4th Quarter            13/16     9/16


      1996

      1st Quarter            1 3/16    1 1/8

      2nd Quarter            1 7/16    1

      3rd Quarter            1 1/4     1 1/16

      4th Quarter            1 15/16   1 1/16



On March 31, 1998, the Closing bid for An-Con's Common Stock as
reported by the NASD Bulletin Board was $1.31 
per share.  As of March 31, 1998, the total number of shareholders of
An-Con's Common Stock was approximately 1,000 exclusive of
shareholders whose shares are held in the name of their broker or
stock depositories or the escrow agent holding shares for the benefit
of An-Con shareholders which are estimated to be 1,000 additional
shareholders.


Item 6.   Management's Discussion and Analysis.

Results of Operations

An-Con's net revenues for 1997 were approximately $7.3 million as
compared to $7.5 million for 1996, 
respectively.  Sales of Aaron Medical accounted for 
substantially all of 1997 sales.  The decrease in sales of $114,619
(1.5%) was the net result of $194,770 (3%) increase in revenues from
sale of medical products and $309,389 (24%) decrease in sales of non-
medical products.  The sales for medical products represented
approximately 87% of total sales in 1997 as compared to 83% in 1996. 
Percentage of gross profit from sales decreased from 45% in 1996 to
44% in 1997 principally due to slightly higher cost of materials.

Because of consistent sales volume, cost of goods sold did not
materially change from 1996 to 1997.  During 1997 and 1996, Aaron's
family of cauteries accounted for 43% and 39% of sales, and 39% and
33% of cost of goods sold, respectively.

Research and development expenses decreased by 8.5% from $105,700 to
$96,738 from 1996 to 1997, respectively.  The Company continued to
invest in the development of ECU devices, and other Aaron products
which is evidenced by acquisition costs in 1997 of $11,925.

The increase in net interest of 16% amounting to $11,896 was mainly
attributable to the Company's decision to utilize a bank line of
credit and a term loan to finance its working capital needs.

The Company's effective income tax rate would have been 30% except
that An-Con has loss carryforwards.  For 1997 the Company recognized
$29,757 in tax benefit for the current year.  

General and administrative expenses of the Company decreased by
$120,336 (9.6%) from $1.3 million in 1996 to $1.2 million in 1997.

Salaries increased by 9.6% from $1.1 million in 1996 to $1.2 million
in 1997.  The increase in salaries were in part because of hiring
additional engineering and quality control personnel. 

Operating expenses as a percentage of sales were 38% in 1996 as
compared to 39% in 1997.  Operating expenses remained approximately
the same for 1996 and 1997.

Income from operations decreased to $399,579 in 1997, from $480,400 in
1996.  Income from operations decreased by 29% or from a gain of 6% of
sales to a gain of 5% of sales.

Net income of the Company in 1997 was $99,191, as 
compared to $407,249 in 1997.  Income decreased by $308,058 from 1996
to 1997. The primary reason for reduction of the net income was a
$261,585 loss due to the settlement of a patent infringement law suit.

Cost of professional services increased by 15% from $259,400 in 1996
to $298,156 in 1997.  Additional professional fees were related to the
consulting and legal costs of acquiring new technologies and products. 

The Company sells its products through distributors both in the
international market and in the USA.  The distributors are contacted 
through response to company advertising in international medical
journals or at domestic or international trade shows.  The Company
began attending trade shows in foreign countries in 1993.  Since that
time, international sales have more than doubled from the 1993 sales
of $553,000.  The main focus for export sales has been Western Europe. 
The Company has distributors in all major markets there.  The Company
intends to continue marketing its products, targeting different
regions of the world, while returning to major markets for increased
market exposure and to introduce new products.  

During 1997, international sales of the Aaron Medical product line
continued to increase.  These sales were $1.78 million which
represented 24% of total sales.  This compares favorably to 1996 where
total international sales were $1.51 million  representing 20% of
total sales.  The increase from 1996 to 1997 represents a
19%($281,867) increase in international sales volume.  

Though consolidation in U.S. distribution continued in 1997, Aaron
retained all distributor relationships and acquired preferred vendor
status with industry leaders such as McKesson, General Medical, Owens
& Minor, and Physician Sales & Service.  Aaron entered into a vendor
focus agreement  with Owens & Minor and an exclusive U.S. sales
agreement with Physician Sales & Services for the Aaron 800. 
Additional sales were generated by electrosurgical product OEM
agreements.

New product development and improvements to the Company's facility
required by regulatory agencies in 1997 amounted to $86,909.  These
expenditures were funded primarily through internal cash flow and bank
financing.  In order to provide additional working capital, the
Company has secured a fourteen month $400,000 credit facility with a
local commercial bank in the first quarter of 1997 and a $150,000
three year note to purchase fixed assets with interest at 1% over
prime.

Financial Condition

With the acquisition of Aaron, the Company's financial condition has
improved.  As of December 31, 1997, cash totaled $48,246 down from
$120,900 at December 31, 1996.  Cash used by operating activities was
$98,793 in 1997 compared to $425,300 cash generated from operating
activities in 1996.  Net working capital of the company on December
31, 1997 was $557,237 as compared to $666,600 in 1996.

The amount of cash used in investing activities was $257,733 in 1997,
compared to $456,200 in 1996.  The Company continued to invest in
property, plant and equipment needed for future business requirements,
including manufacturing capacity.  

The Company's ten largest customers accounted for approximately 51% of
net revenues for 1997.  At December 31, 1997, the same ten customers
accounted for approximately 47% of outstanding accounts receivables.

The net cash inflow from financing was $283,868 in 1997 as compared to
$14,000 in 1996.  The most significant items of financing activity in
1996 were the reduction of notes payable  of $125,900 and the $79,700
in professional fees associated with the Aaron purchase.  
Sources of funds were the receipt of subscriptions receivable of
$10,600 and issuance of 427,778 common shares for services valued at
$181,000.

In 1997, the major sources of financing were $485,000 gross borrowing
from the bank line of credit and $150,000 term loan from the bank. 
The cash used in financing activities were principally to repay the
line of credit and long term debt, $225,000 and $41,936 respectively.  
The Company believes that it has the financial resources needed to
meet business requirements in the foreseeable future, including
capital expenditures for the expansion of its manufacturing site,
working capital requirements, and product development programs.

Outlook

The statements contained in this Outlook are based on current
expectations.  These statements are forward looking, and actual
results may differ materially.

The Company believes that the world market for disposable medical
products, such as the Company's battery-operated cauteries, has
significant growth potential because these type of products have not
been affordable or effectively marketed outside the U.S. heretofore. 
Because of these factors, the Company has designed certain disposable
products to be reusable.    The Company presently has a significant
portion of the U.S. cautery market and does not expect a dramatic
growth in sales of cautery-related products domestically unless an OEM
arrangement can be  obtained with a co-leader in this market.

The Company, has focused on expanding its line of electrosurgical
products.  Electrosurgical products sold by the Company are the
standard stainless steel electrodes, the patented Multi-Function
Cautery, 
and the Aaron 800 high frequency desiccator and the as Aaron 1200. 
The Aaron 1200 will be introduced in the second quarter of 1998.

From 1996 to 1997, the Company's electrosurgical sales increased by
more than 3% from $1,331,523 to $1,377,029.
This increase was attributable to a 50% increase in Resistick sales
and a 22% decrease in sales of generators.  In 1998 Resistick sales
ceased due to the settlement of the Company lawsuit with MegaDyne. 
Except for the possible introduction of new electrosurgical products
the company does not expect electrosurgical sales to increase in 1998.
Aaron through its private label capability sees unique opportunities
in the domestic market as its competitors do not private label.  The
electrosurgical product line is a larger market than the Company has
normally sold into and is dominated by two main competitors, ValleyLab
and Conmed. The combined markets for the Company's electrosurgical
products exceed $100 million annually.  Electrosurgical product sales
moved from fifth place to second in total Company sales by product
line in 1997.


 
Non-Medical Products

The Company for 1997 sold $.962 million of its flexible 
lighting products used primarily in the automotive and locksmith
industries.  Approximately $.627 million was sold to one customer. 
The Company is expanding this market line with the addition of a
higher quality flexible light unit.  The higher quality version of the
Bend-A-Lite will be sold into the same markets as the Company
presently sells its less expensive unit.

The Company no longer intends to manufacture a fiber optic flexible
scope to compete in the automotive, aircraft and quality maintenance
markets.  The Company sold its rights in this product to a customer.


Liquidity and Future Plans

Since the acquisition of Aaron Medical Industries, Inc. the Company
has partially changed its direction from acquiring ownership interest
in companies to acquiring new product technology and expanding
manufacturing capabilities through Aaron.  The Aaron 800 and 1200 are
prime examples of this new direction.  Other products and technologies
are being evaluated for future development.

In order to continue its strong international sales growth and
maintain its ability to sell in Europe, management is implementing an
ISO9000/EN46001 quality system and expects to be certified and have
its CE mark (International Quality control) by the third quarter of
1998.  The Company has obtained a line of credit with a local
commercial bank for $400,000 and a $150,000 loan for capital
improvements.  Interest on these loans is to be paid at 1% over prime.

The Company's future results of operations and the other forward-
looking statements contained in the Outlook, in particular the
statements regarding growth in the medical products industry, capital
spending,  research and development, and marketing and general and
administrative expenses, involve a number of risks and uncertainties. 
In addition to the factors discussed above, among the 
other factors that could cause actual results to differ materially are
the following:  business conditions and the general economy;
competitive factors such as rival manufacturers' availability of 
products at reasonable prices; risk of nonpayment of accounts
receivable; risks associated with foreign operations; and litigation
involving intellectual property and consumer issues.

An-Con believes that it has the product mix, facilities, personnel,
and competitive and financial resources for continued business
success, but future revenues, costs, margins, product mix and profits
are all subject to the influence of a number of factors, as discussed
above.




Item 7.   Financial Statements.
(See Attached)

Item 8.   Changes in and Disagreements with Accountants on

There are no disagreements with or changes in accountants.

      
        
<PAGE>
PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons


Name            Age        Position       
Director since

J. Robert Saron 45  Chairman of the Board 
August, 1994        Chief Executive
                    Officer, Director     

Andrew Makrides 56  President, Director   
December, 1982

Joseph F. Valenti   81           Director             
October, 1995

George W. Kromer    56           Director             
October, 1995

Delton Cunningham   33           Secretary, Treasurer
                    Vice President/CFO        

Tsang Yang Tseng    51           Vice-President   
                    Far East Affairs                   

Moshe Citronowicz   45           Executive Vice President
                    Chief Operating Officer            
                         

J. Robert Saron, age 45, President and Chairman of the Board holds a
Bachelors degree in Social and Behavioral Science from the University
of South Florida.  From 1971 through 1979 Mr. Saron served in various
capacities with Saron Pharmaceutical Corporation and Home Breathing
Care, Inc.  In 1979 Saron Pharmaceutical Corporation and Home
Breathing Care, Inc. were acquired by Key Energy Enterprises, Inc. and
were renamed Key Medical, Inc.  Mr. Saron was named Vice President of
Key Medical, Inc. and served on the Board of Directors of Key Energy
Enterprises, Inc.  In 1983 Mr. Saron became President of 


Key Medical, Inc.  In January 1984 Mr. Saron joined Suncoast Medical
Manufacturing, Inc.  In 1985 Suncoast 
acquired Key Technologies, Inc. and Mr. Saron became Vice President of
the Corporation.  From 1988 to present Mr. Saron has served as
President and director of Aaron Medical Industries, Inc. (formerly
Suncoast Medical Manufacturing, Inc.).  In March, 1995 Mr. Saron was
elected Chairman and Chief Executive Officer of An-Con Genetics, Inc.
        
Andrew Makrides, Esq. age 56, President, member of the Board of
Directors, and former Chairman, received a Bachelor of Arts degree in
Psychology from Hofstra University and a JD Degree from Brooklyn Law
School.  He is a member of the New York Bar and has practiced law 
from 1968 until joining An-Con Genetics, Inc. as Executive Vice
President and director, in 1982.  Mr. Makrides became President of the
Company in 1985 and served as such to date.

Delton N. Cunningham, age 33, Vice President and Chief Financial
Officer holds a Bachelor of Science in Accounting from the University
of Florida.  He is a Certified Public Accountant and is a member of
the American Institute of Certified Public Accountants and the Florida
Institute of Certified Public Accountants.  Mr. Cunningham began his
career with the Miami office of Arthur Andersen & Company.  In June of
1991 Mr. Cunningham joined Aaron Medical Industries, Inc., as the
Company's Chief Financial Officer.  In June of 1992 Mr. Cunningham
became Vice President of Aaron Medical Industries, Inc. and in April
of 1993 he was elected Corporate Secretary of Aaron by the Board of
Directors.

Tsang Yang Tseng, age 51, is a medical doctor and the owner of several
medical clinics in Taiwan and has other business operations in Far
East Asia. Currently he also serves as the Vice President in charge of
Far Eastern affairs for the Company. 

Joseph F. Valenti, age 81 filled a vacancy on the Board of Directors
and became a member of the Board of Directors on October 1, 1995.  He
is the former Vice-President of the International Division of Aaron
Medical Industries, Inc. and retired as of January 1, 1995 from that
position.  He continues to be the principal shareholder and chief
executive officer of Valpex International Corporation, a company which
is wholly owned by him, engaged in the import of products.  This
import company is a major supplier of the Company's light bulbs which
are used in the Company's various manufactured products.  The prices
paid by the company for the products are competitive with those from
other sources.  He received a Bachelor of Arts Degree in 
Languages from the College of the City of New York in 1939. He has
been associated with Aaron Medical Industries, Inc. and its
predecessor companies since 1980 and was charged with developing the
international sales department and increasing exports sales on behalf
of Aaron.

George W. Kromer, Jr., age 56 filled a vacancy on the Board of
Directors and became a director on October 1, 1995.  Mr. Kromer is a
Senior Financial Correspondent for "Today's Investor" and is utilized
as a consultant by a number of companies whose shares are listed on
the American Stock Exchange and Over-the-Counter Exchange.  An-Con has
also retained Mr. Kromer on a month-to-month 
basis as a consultant in addition to his capacity as a director.  He
has been writing for financial publications since 1980.  He received a
Master's Degree in 1976 from Long Island University in Health
Administration.  He was engaged as a Senior Hospital Care Investigator
for the City of New York Health & Hospital Corporation from 1966
to 1986.  He also holds a Bachelor of Science Degree from Long Island
University's Brooklyn Campus and an Associate in Applied Science
Degree from New York City Community College, Brooklyn, New York.

Moshe Citronowicz (45), is a graduate of the University of Be'er
Sheva, Be'er Sheva, Israel, with a Bachelor of Science degree in
electrical engineering.  He has also received certificates from
Worcester Polytech, Lowell University and the American Management
Association for completion of seminars in MRP, master scheduling,
purchasing SPC, JIT, accounting and plant management.  Since coming to
the United States in 1978, Mr. Citronowicz has worked in a variety of
manufacturing and high tech industries.   In October 1993, Mr.
Citronowicz joined the Company as Vice President of Operations.  He 
is responsible for all areas of manufacturing, purchasing, product re-
design, as well as new product design.  In September 1997, Mr.
Citronowicz was appointed by the board of directors to the position
Executive Vice President and Chief Operating Officer.



REMUNERATION
Item 10.
The following table sets forth the compensation paid to the 
executive officers of the registrant for the three years
ended December 31, 1997:


 Summary Compensation Table                        
Annual Compensation
                          

Name and                                                  Other(b)          
Principal                             Annual                     
Position         Year   Salary Bonus(a)                   Compensation  

J.Robert Saron   
CEO/Chairman   1997 $155,865   $ 2,460  $9,352
               1996  143,000    42,600   8,100           
               1995  116,000    39,600  23,700
                            

Andrew Makrides
President      1997  103,382     1,784   9,598
               1996   90,000     8,400   9,700
               1995   77,000    11,800   8,000                 

Moshe 
Citronowicz
Executive 
Vice President-
Chief Operating1997  107,044     1,921   9,352
Officer        1996  104,600    11,200   8,100
               1995   97,000    11,800   8,000

                    
Delton Cunningham
Secretary, Treasurer,
Vice President/CFO      1997    90,325   1,516    9,262
               1996   86,000     8,400   7,400
               1995   82,900     8,800   8,000
                          
(continued on next page)
(a) In 1997, the officers waived their right to 1996 
    bonuses and the bonuses were cancelled.
(b) Other compensation consists of medical insurance and auto.












REMUNERATION (continued)

                                                Summary Compensation Table

                                  Long Term Compensation

                          Awards               Payouts



                            Securities
                  Restrictedunderlying
                     Stock   Options/ LTIP         
              Year  Awards    SARs(#)              Payouts
Compensation
    
Name and 
Principal Position

J.Robert Saron
CEO           1997    --        --       --
              1996    --    90,000       --
              1995    --        --       --
                        

Andrew Makrides
President     1997    --        --       --
              1996    --    70,000       --
              1995    --        --       --
                  

Moshe Citronowicz
Vice President1997    --        --       --
Operations    1996    --    25,000       --
              1995    --        --       --
                  

Delton Cunningham
Secretary,    1997    --        --       --
Treasurer, Vice     1996        --   55,000    --
President/CFO 1995    --        --       --
                  
                  
                  




































Option/SAR Grants Table

                               Value of
                              securities
                              underlying     
                Number of     unexercised
                 shares         options
                Acquired       sar/s at
                   on    Value FY-END(#)
           Year ExerciseRealizedExercisable  


                       
Name and
Principal
Position
J. Robert      1997     --       --      --            
Saron    1996    --     --  101,250        
CEO      1995    --     --       --                  
             

Andrew   1997    --     --       --             
Makrides 1996    --     --   78,750        
President1995    --     --       --

Moshe    1997    --     --       --
Citronowicz    1996     --       --  28,125          
Vice     1995    --     --       --        
President    
Operations                            


Delton   1997    --     --       --        
Cunningham     1996     --       --  61,875     
President/     1995     --       --      --     
Secretary,   
Treasurer,
 Vice,CFO    
             

Outside Directors are compensated in their capacities as Board members
through option grants.  The Company's Board of Directors presently
consists of J.Robert Saron, the CEO, Andrew Makrides, President,
Joseph F. Valenti and George W. Kromer, Jr.  Mr. Saron is also CEO of
Aaron.  Mr. Kromer has been retained on a month-to-month basis
pursuant to verbal agreement as a financial and public relations
consultant by An-Con for the past year at an average monthly fee of
$1,000.

In 1996 and 1997 George Kromer and Joseph Valenti were awarded 105,000
and 120,000 options each for five to ten years to purchase An-Con
stock from .75% to $1.125 per share.

There have been no changes in the pricing of any options previously or
currently awarded.

On the 8th of September, 1995, the Company entered into an employment
agreement which (a) J. Robert Saron providing for Mr. Saron to act as
an executive employee of the Company.  The agreement was for a period
of 5 years and provides for compensation in the amount of $118,335 per
year plus additional amounts for automobile allowance ($600 per month)
and a bonus equal to 10% of the Company's pre-tax profits in excess of
the first $200,000 of profit in any given year.  The agreement also
provides for annual cost of living percentage increases as to salary
and automobile allowance.  In addition to the foregoing, the agreement
provides for a vacation of three weeks per year, reimbursement of
business expenses, group insurance and life insurance.  The agreement
may be terminated (a) upon the death of Mr. Saron, or (b) on thirty
(30) days notice by Mr. Saron to terminate, or (c) by the Company, (i)
without cause, upon the majority approval of the Board of Directors on
thirty (30) days written notice (wherein the Company shall be
obligated to pay the employee compensation under the agreement for the
balance term of the agreement) and (ii) the employee may elect, in
lieu of (i) above, to cancel his agreement and obtain severance
payments equal to three times the annual salary and bonus in effect
during the month preceding such termination; or (d) by the Company for
cause, if during the time of employment, the employee violates the
covenant not to compete provisions of the agreement, or is found
guilty of a felony or crime of moral turpitude.  The agreement
provides for a covenant not to compete directly or indirectly against
the Company for a period of one year.  Such agreement also provides
for indemnification of Mr. Saron for any liability while acting as an
officer and director of the Company except in the instances where it
is determined by a court of competent jurisdiction that (a) he has
breached his duty of loyalty to the corporation or the shareholders,
or (b) acted not in good faith or intentionally improperly, or (c)
paid unlawful dividends or made unlawful stock purchases or
redemptions, or (c) otherwise engaged in a transaction in which he
received improper personal benefit against the interests of the
corporation or its shareholders.

    On September 8, 1995, the Company also entered into a similar
employment agreement with Andrew Makrides, President, for a period of
5 years and providing for annual compensation in the amount of
$90,000, a monthly automobile allowance of $500 per month, and bonuses
equal to 3% of the Company's pre-tax profits in excess of the first
$300,000 of profits in An-Con Genetics, Inc. and annual cost of living
percentage increases.  In all other respects the agreement is similar
to that of Mr. Saron set forth above.

    Effective September 8, 1995 the Company entered into a similar 3-year
executive employment agreement (the "Agreement") with Delton N.
Cunningham, as Vice-President and Secretary of the Company.  Mr.
Cunningham has also been appointed Treasurer and Chief Financial
Officer of the Company.  The Agreement provides for one year
extensions unless written notice of termination is provided by the
Company nine months prior to the termination date and contains
termination provisions similar to those of Messrs. Saron and Makrides. 
The Agreement also provides for a salary of $75,000 per year, a
monthly  automobile allowance of $500, a bonus equal to 3% of the
Company's pre-tax profits in excess of $300,000, 3-weeks paid
vacation, reimbursement of expenses, group medical insurance and
contains a one-year non-compete covenant commencing upon termination
of employment.

On September 8, 1995 the Company entered into a 5-year executive
employment agreement (the "Agreement") with Moshe Citronowicz, as
Vice-President of Operations.  The Agreement provides for a salary of
$95,000 per year, a monthly  automobile allowance of $500, a bonus
equal to 4% of the Company's pre-tax profits in excess of $300,000, 3-
weeks paid vacation, reimbursement of expenses, group medical
insurance and contains a one-year non-compete covenant commencing upon
termination of employment.  In all other respects the agreement is
similar to that of Mr. Cunningham set forth above.

In May of 1997 the officers as a group waved their right to the
bonuses and set forth in their contracts.  The board of directors will
determine future bonuses.


Item 11.   Security Ownership of Certain Beneficial Owners and
Management of An-Con.

The following table sets forth certain information as of December 31,
1997, with respect to the beneficial 
ownership of the Company's common stock by all persons known by the
Company to be the beneficial owners of more than 5% of its outstanding
shares, by directors who own common stock and by all officers and
directors as a group.
     
                 Number of NaturePercentage of 
Name and     Title Shares     of    outstanding
Address    of Class ownedownership(i)shares(i)

5% Beneficial 
 Owners

Tsang Yang 
Tseng    Common Stock 666,666  Includes        7.14%
190-1                      shares only
Ming-Chun 
Road
Chi-Yi, Taiwan



Robert 
Speiser     Common Stock   753,333   Includes       8.07%    
(ii)                       shares only
1340 Boca Ciega                   
Isle Drive                     
St. Petersburg,                
Florida 33706
  
Directors

J. Robert 
Saron    Common Stock 522,976  Includes          5.60%
(iii)(V)                     90,000
Ashley Drive                   shares  
Seminole, FL 34642             reserved for
                              options

J.Valenti           Common Stock     177,205   Includes       1.90%
5700 mariner drive        120,000
Tampa, Florida            shares
33609                     reserved for
                          options

G. Kromer           Common Stock     105,000   Includes  1.12%
P.O. Box 188                         105,000
Farmingdale, NY 11738                shares
                          reserved for
                          options


A.Makrides          Common Stock     420,667   Includes  4.50%
20 Damin Circle           70,000
St. James, NY 11780       shares
                          reserved 
                          for options          
Officers 
and Directors 
as a Group         Common Stock      1,528,497 Includes  16.37%
                           465,000
                           shares
                           reserved
                           for options
                        

(i) Based on 8,279,948 shares and 1,064,000 options outstanding to
acquire shares.  Officers and directors have 465,000 options to
acquire shares at December 31, 1997.

(ii) Mr. Robert Speiser resigned as the Company Chairman and Chief
Executive Officer on March 20, 1995.  

(iii) Robert Saron, who replaced Mr. Speiser as Chairman, is the
President and a director of Aaron Medical Industries, Inc.  As a
result of the exchange of shares pursuant to the Acquisition
Agreement, Mr. Saron is the beneficial owner of 407,976 additional
shares of An-Con (in addition to the 25,000 shares he had received
prior to the merger).  Mr. Saron also has the option to acquire an
additional 90,000 shares.

(iv)  Mr. Makrides has the option to acquire 70,000 shares in addition
to his shares of 350,667.

(v)  During 1996, one transaction took place that materially changed
shareholders' control of the Company:

Aaron shareholders received their shares on November 25, 1996 from the
escrow agent, which gave them 37.7% of the outstanding shares of the
Company at that time.

See "Certain Relationships and Related Transactions".









Item 12.   Certain Relationships and Related Transactions

On January 11, 1995, the Company acquired Aaron Medical Industries,
Inc. which was accounted for by the purchase method.  Total assets
acquired were valued at $2,012,800 and liabilities assumed were valued
at $681,000.  In order to properly transfer the shares agreed upon to
the



Aaron shareholders the arrangement called for the shares to be
registered so they could be freely traded.  The assets were valued at
$335,800 more than their cost basis which created goodwill. 

Valpex International Corporation  ("Valpex"), a Company owned and
operated by Mr. Joseph Valenti, was a supplier of vacuum and Krypton
bulbs and vinyl pouches to Aaron for several years.  In 1996, Mr.
Valenti joined An-Con as a director.  On May 10, 1996, Valpex and
Aaron entered a three year agreement that allows Aaron to purchase
products directly from Valpex's  manufacturers and suppliers.  In
exchange, Aaron agreed to pay a commission to Valpex on purchases from
the agreed upon list of Valpex's suppliers.  In 1997 and 1996,
respectively, the equivalent sales of Valpex to Aaron were $117,700
and $126,000, respectively.  


Item 13.   Exhibits and Reports on Form 8-k 

No Form 8-k was filed in the fourth quarter of 1996.



<PAGE>
SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Petersburg, State of Florida, on March
29, 1997.
                            An-Con Genetics, Inc.


                            By: S/J.Robert Sa    ron    
                            Robert Saron
                            Chairman of the Board 
                            Chief Executive Officer


POWER OF ATTORNEY

Each person whose signature appears below hereby appoints Robert
Saron, Andrew Makrides, Joseph Valenti, George W. Kromer and Deuton
Cunningham and any one of them, as his true and lawful attorneys-in-
fact and agents with full power of substitution, for him and his name,
in any and all capacities, to sign any or all amendments to this
report, and to file the same with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.

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

    S/J. Robert Saron                Chairman of the Board,
J. Robert Saron                           Chief Executive Officer,
                                  Director  
                                  April 14, 1998


    S/Andrew Makrides             President, Director 
    Andrew Makrides                                   April 14, 1998


    S/Joseph F. Valenti              Director
    Joseph F. Valenti                                 April 14, 1998


    S/George W. Kromer               Director
    George W. Kromer                                  April 14, 1998


    S/Delton N. Cunningham           Secretary, Treasurer
    Delton N. Cunningham                                      Chief Financial 
                            Officer                   
                                                           April 14, 1998






















PART II

ITEM 7.  FINANCIAL STATEMENT




AN-CON GENETICS, INC.
INDEX TO FINANCIAL STATEMENTS



Contents                                                    

Independent Auditors' Report                               

Consolidated Balance Sheet at December 31, 1997            

Consolidated Statements of Operations for the years
  ended December 31, 1997 and 1996                         

Consolidated Statements of Shareholders' Equity for the
  years ended December 31, 1997 and 1996                   

Consolidated Statements of Cash Flows for the years
  ended December 31, 1997 and 1996                         

Notes to Consolidated Financial Statements                 
<PAGE>

AN-CON GENETICS, INC. 
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997





ASSETS

Current assets:

Cash                                                 $   48,246
Trade accounts receivable, net      791,825
Inventories                         953,125
Prepaid expenses                     67,930
Deferred tax asset                  175,010
Other Assets                         57,263

          Total current assets    2,093,399

Property and equipment, net       1,439,500

Other assets:

Goodwill, net                        40,000
Patent rights, net                  257,552
Deposits                              7,150

                                    304,702

    Total Assets                 $3,837,601

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
































AN-CON GENETICS, INC. 
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997
(Continued)


LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Current liabilities:

Accounts payable                  $   399,090
Accrued expenses                      235,790
Notes payable - current portion       804,762
Due to shareholders                    99,154
 
         Total current liabilities  1,538,796


Long-term debt, net                    74,107


Stockholders' equity 

Common stock par value $.015;
 15,000,000 shares authorized,
 issued and outstanding 8,279,948 
 shares, on December 31, 1997         124,071
Additional paid in capital         12,960,362
Accumulated deficit               (10,859,735)
    
Total stockholders' equity          2,224,698

    Total liabilities and 
      Stockholders' equity        $ 3,837,601


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








 
















AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                                   
                    1997        1996                                
                                                      
Sales         $ 7,371,281  $ 7,485,900                              
Costs and 
expenses:

Cost of sales   4,138,774    4,134,434                              
Research and 
 development       96,738      105,681                                
Professional 
 services         298,156      259,406                              
Salaries and 
 related costs  1,280,370    1,168,019                              
Selling, 
 general and 
 administration 1,217,664    1,338,000                                
Total cost and
 expenses       7,031,702    7,005,540                              

Income (Loss) 
 from operations  339,579      480,360                              

Other income 
 and (expense):

Interest income     4,005           --                              
Interest expense           (   87,696)                    (  75,820)     
Miscellaneous      34,288       11,003                                   
               (   49,403)      64,817                              
Income before 
 extraordinary 
 items            290,176      415,543                                 

Extraordinary 
 items:

Gain from 
 forgiveness 
 of debt           70,600           --                              
Settlement 
 of lawsuit    ( 261,585)           --                              

  Extraordinary 
   items       ( 190,985)           --
Income before 
 income tax        99,191      415,543                              
Income taxes: 
Current        (  29,757)   ( 158,300)                              
Deferred              --    (   8,300)                              
Tax benefit       29,757       158,300                              
                                 
Net income 
 (loss)       $   99,191   $   407,243                              













AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
(CONTINUED)



Earnings per share  

Income before 
 extraordinary  item:                                               
   Basic           $ .0352   $ .0531
   Diluted         $ .0342   $ .0521
Net income:
   Basic           $ .012    $ .0531
   Diluted         $ .012    $ .0521

Weighted average number 
of shares 
outstanding               8,186,256                        7,663,872     


Weighted average number 
of share assuming 
conversion of 
securities     8,443,972  7,817,205


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

AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997

                        Common
              Warrantsnumber of Common  Paid-in
             Outstandingshares  stock   Capital 
Balance
January 1, 
1996           80,000       4,305,340   $64,591$11,541,144

Private 
placement
of Shares at 
$1 per share 
plus 1 warrant 
per share     120,000 120,000   1,800   118,200

Shares issued
for cash at 
$.45 per share      -  57,778     867    19,133

Shares issued for 
cash and notes at
$.42 per share      - 200,000   3,000   81,000

Shares issued for 
cash at $.42 per 
share               -  50,000     750   20,250

Shares issued in 
exchange for Aaron
shareholders at 
$.39 per share    - 3,352,530 50,288  1,306,812           

Stock issue costs -         -      - ( 174,800)

Shares issued for 
services at $.40
per share         -    25,000    375      9,625



The accompanying notes are an integral part of the financial
statements.
(continued on next page)

































AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
(Continued)


                        Common
              Warrantsnumber of  Common  Paid-in
             Outstandingshares    stock  Capital 

Collection of
stock 
subscriptions
receivable          -       -        -        -

Employee 
warrants      921,000       -        -        -

Income for 
year 1996           -       -        -        -

Balance as of
December 31,
1996        1,121,000        8,110,648 $121,671    $12,921,364

The accompanying notes are an integral part of the financial
statements.
(continued on next page)




















































AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
(Continued)

                                                           
Subscriptions
                 Deficit  Receivable      Total
                    
Balance
January 1, 
1996        (11,366,169) $(10,600)     $228,966

Private placement
of Shares at $1 
per share plus 1
warrant per share      -         -      120,000

Shares issued
for cash at 
$.45 per share         -         -       20,000

Shares issued for 
cash and notes at
$.42 per share         -  (64,000)       20,000

Shares issued for 
cash at $.42 per 
share                  -         -       21,000

Shares issued in
exchange for Aaron
shareholders at
$.39 per share         -         -    1,357,100

Stock issue costs      -         -    (174,800)

Shares issued for 
services at $.40
per share              -         -       10,000



The accompanying notes are an integral part of the financial
statements.
(continued on next page)
































AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
(Continued)

                                                             
Subscriptions
                  Deficit Receivable   Total
                     
                       
Collection of
stock 
subscriptions
receivable            -   10,600      10,600

Employee 
warrants              -        -           -

Income for 
year 1996       407,243        -     407,243

Balance as of
December 31,
1996      $(10,958,926)$(64,000)  $2,020,109

The accompanying notes are an integral part of the financial
statements.
(continued on next page)

















 
<PAGE>
AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997

                              Common
                Warrants    number of   Common  
               Outstanding    shares     stock       
Balance
January 1, 
1997          1,121,000   8,110,648   $121,671

Shares  
exchanged
for warrants   (200,000)    100,000      1,500

Shares 
issued to 
retire debts           -     51,800        637            

Shares issued 
for services           -     17,500        263            

Warrants 
issued           143,000          -          -

Collection of 
subscriptions
receivable             -          -          -

Net income             -          -          -

Balance as of
December 31,
1997           1,064,000  8,279,948   $124,071     
                        

The accompanying notes are an integral part of the financial
statements.
(continued on next page)












 

<PAGE>
AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
(Continued)

            Paid in         Subscriptions
            Capital   DeficitReceivable  Total
               
Balance
January 1, 
1997    12,921,364(10,958,926)        $(64,000) $2,020,109

Shares 
exchanged 
for warrants        (  1,500)        -        -          -

Shares 
issued
to retire         
debt        33,761          -        -  34,398            

                             
Shares issued 
for services 6,737          -        -    7,000

Warrants issued  -          -        -         

Collection of 
 subscriptions
 receivable      -          -   64,000   64,000

Net income                  -            99,191          -    99,191

Balance as of
December 31, 
1997    12,960,362        (10,859,735)  $     - $2,224,698     



The accompanying notes are an integral part of the financial
statements.
(continued on next page)








































AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                      
                                  1997     1996

Cash flows from operating activities:
 
Net income (loss)               99,191$ 407,249                     

Adjustments to reconcile net 
income (loss) to net cash provided
by operating activities:
Depreciation and amortization  311,138  260,600                          
Shares issued for services       7,000   10,000                     
Waiver of bonus payments by 
 officers                     (70,600)        -
Deferred income taxes                -    8,300        

Change in assets and liabilities:

(Increase)decrease in receivables        64,565            (204,100)          
(Increase)decrease in prepaid 
 expenses                    ( 11,876)  17,724                      
Increase in inventories      (109,925)        (247,769)                  
Increase in other receivables(  7,738)      --                      
Increase(decrease)in accounts 
 payable                     (388,126) 112,400                      
Increase in accrued expense      7,578  60,900                      
                                      

Total adjustments            (197,984)  18,055

Net cash provided by (used in)  
operations                  $( 98,793)        $ 425,304                  


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































AN-CON GENETICS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
                      
                                      
                           1997       1996

Net cash provided by (used in)
 operating activities  $( 98,793)  $ 425,304

Cash flows from investing 
 activities:

Increase in fixed assets(244,352)  (300,200)                        
Increase in security deposits      (     10)                     600          
Acquisition of patent rights       ( 13,371)                      --
Purchase of Technology         --  (156,600)
                                                                              
Net cash used in investing 
 activities             (257,733)  (456,200)                        

Cash flows from financing               
 activities

Receipt of common stock 
 subscription              64,000     10,600                                  
Common shares issued           --    181,000                             
Loans from shareholders     2,736         --                             
Cost of issuing common stock -                                      
 Purchase of Aaron             --  ( 79,700)
Increase in long term borrowing       69,534                      --
Payment of long term borrowing     (220,466)               (125,900)
Term loan                 150,000         --
Repayment of term loan  ( 41,936)         --
Borrowing - line of credit485,000         --
Repayment - line of credit         (225,000)                      --

Net cash used in financing 
activities                283,868  ( 14,000)

Net increase (decrease)in
cash 
Cash at beginning of year(72,658)   (44,896)
Cash at end of year       120,904    165,800

Cash at end of year      $ 48,246  $ 120,904
                                 
The accompanying notes are an integral part of 
these financial statements.                   















AN-CON GENETICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE YEAR ENDED DECEMBER 31, 1997 AND 1996

Cash paid during the twelve months ended December 31:
                     1997              1996

    Interest      $ 71,651          $ 70,000                        
    Income Taxes       -0-                                          -0-  

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND 
FINANCING ACTIVITIES:

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997

1.  In February of 1997, 10 year convertible subordinated debentures
of the Company came due and the Company offered each bond holder 2,200
shares of common stock for each $1,000 bond and accrued interest of
$550.  Nineteen bondholders accepted the offer and forty-three
bondholders received cash for their bonds and accrued interest.  The
total amounts of principal and accrued interest on the converted bonds
were $19,000 and $10,826 respectively.  The balance of the bondholders
have not redeemed their bonds or accepted the share offer.

2.  The Company issued 10,000 shares of common stock in exchange for
$4,572 of accounts payable.

3.  The Company issued 100,000 shares of common stock and cancelled
200,000 warrants that were issued in conjunction with a private
placement of the Company's securities.

4.  The Company exchanged its patent for Baroscope Technology and
related equipment and inventories for notes receivable in the amount
of $49,525.  The costs of the patent (net of amortization) equipment,
and inventories were $31,735, $7,000, and $10,790 respectively.

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996

1.  During 1996, the Company sold 200,000 common shares, at $.42 per
share for $64,000 of subscription receivables and $20,000 cash.  The
subscription is due in August, 1997 and bears interest at 6% per
annum.

2.  The Company issued 25,000 restricted shares for sales services
valued at $.40 per share or $10,000 which was 50% of the market value
of the Company's unrestricted shares at the time of issuance.

3.  In November, 1996, 99% of Aaron's shareholders accepted
3,352,530 shares of An-Con's common stock and rejected the cash
recession offer of $1,357,100 made by 












AN-CON GENETICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE YEAR ENDED DECEMBER 31, 1997 AND 1996
(CONTINUED)

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(CONTINUED)

the Company.  The common stock issue costs of $95,000, associated with
the purchase of Aaron, were charged to capital in excess of par value
when An-Con shares were released to the Aaron shareholders in
December, 1996. 

4. The registration statement related to 3,399,096 of shares issued to
the previous shareholders of Aaron became effective on November 8,
1996, as amended on November 27, 1996.  As of January 11, 1997, the
previous shareholders of Aaron may seek to remove restrictions
pursuant to Rule 144. 

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












































AN-CON GENETICS, INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in the Preparation of Financial Statements

The preparation of consolidated financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes.  Actual results could
differ from those estimates.

Consolidated Financial Statements

The consolidated financial statements include the accounts of An-Con
and its wholly owned subsidiary Aaron Medical Industries, Inc. 
Intercompany transaction accounts have been eliminated.  

Fair Values of financial instruments

Cash and cash equivalents. Holdings of highly liquid investments with
maturities of three months or less when purchased are considered to be
cash equivalents.  The carrying amount reported in the balance sheet
for cash and cash equivalents approximates its fair values.

Accounts receivable and accounts payable.  The carrying amount of
accounts receivable and accounts payable on the balance sheet
approximates fair value.  

Short term and long term debt.  The carrying amount of the bonds and
notes payable, and amounts due to shareholders approximates fair
value.


Inventories 

Inventories are stated at the lower of cost or market.  Cost is
determined principally on the average actual cost method.  Inventory
at fiscal year-end was as follows:

                          1997             

    Raw materials    $ 528,547             
    Work in process    244,772             
    Finished goods     179,806             

    Total            $ 953,125             














AN-CON GENETICS, INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Long-Lived Assets

Long-lived and assets consist of property plant and equipment,
intangible assets.

Property, plant and equipment are recorded at cost less depreciation
and amortization.  Depreciation and amortization are accounted for on
the straight line method based on estimated useful lives.  The
amortization of leasehold improvements is based on the shorter of the
lease term or the life of the improvement.  Betterments and large
renewals which extend the life of the asset are capitalized whereas
maintenance and repairs and small renewals are expenses as incurred. 
The estimated useful lives are: machinery and equipment, 7-15 years;
buildings, 30 years; and leasehold improvements 10-20 years.

Intangible assets consist of patent rights and goodwill.  Goodwill
represents the excess of the cost of assets of the acquired companies
over the values assigned to net tangible assets.  These intangibles are
being amortized by the straight-line method over a 5-year period.  

Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards (SFAS) No.121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of.  In
accordance with SFAS No.121, the Company reviews long-lived assets for
impairment whenever events or changes in business circumstances occur
that indicate that the carrying amount of the assets may not be
recovered.  The Company assesses the recoverability  of long-lived
assets held and to be used based on undiscounted cash flows and
measures the impairment, if any, using discounted cash flows. 
Adoption of SFAS No.121 did not have a material impact on the
Company's consolidated financial position, operating results or cash
flows.  


Revenue Recognition and Product Warranty

Revenue from sales of products is generally recognized upon shipment
to customers.  The Company warrants its products for one year.  The
estimated future costs of warranties are not material.

Income is recognized in the financial statements (and the customer
billed)when products are shipped from stock.  Net sales are arrived at
by deducting discounts and freight from gross sales.














AN-CON GENETICS, INC. 
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Environmental Remediation

The Company accrues environmental remediation costs if it is probable
that an asset has been impaired or a liability incurred at the
financial statement date and the amount can be reasonably estimated. 
Environmental compliance costs are expenses as incurred.  Certain
environmental costs are capitalized based on estimates and depreciated
over their useful lives.

Earnings Per Common and Common Equivalent Share

In February 1997, the Financial Accounting Standards Board issued SFAS
128.  "Earnings Per Share."  SFAS 128 establishes new standards for
computing and presenting earnings per share ("EPS"). Specifically,
SFAS 128 replaces the previously required presentation of primary EPS
with a presentation of basis EPS, requires dual presentation of basic
and diluted EPS on the face of the income statement for all entities
with complex capital structures, and requires a reconciliation of the
numerator and denominator of the basic EPS computation to the
financial statements issued for periods ending after December 15,
1997.  In 1997, the Company adopted SFAS 128. 

Research and Development Costs

Only the development costs that are purchased from another enterprise
and have alternative future use are capitalized and are amortized over
five years.

Income Taxes

The Company and its wholly-owned subsidiary file a consolidated
federal income tax return.

Income taxes are accounted for under the asset and liability method. 
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit
carryforwards.  Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled.  The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that
includes the enactment date.















AN-CON GENETICS, INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Nonmonetary Transactions
          
The accounting for non-monetary assets is based on the fair values of
the assets involved. Cost of a non-monetary asset acquired in exchange
for another non-monetary asset is recorded at the fair value of the
asset surrendered to obtain it.  The difference in the costs of the
assets exchanged is recognized as a gain or loss.  The fair value of
the asset received is used to measure the cost if it is more clearly
evident than the fair value of asset surrendered. 

Stock-Based Compensation
          
The Company has adopted Accounting Principles Board Opinion  25 for
its accounting for stock based compensation.  Under this policy:

1.  Compensation costs are recognized as an expense over
the period of employment attributable to the employee
stock options.

2.       2. Stocks issued in accordance with a plan for past or future services
    of an employee is allocated between the expired costs and future
    costs.  Future costs are charged to the periods in which the services
    are performed.  The proforma amounts of the difference between
    compensation cost included in net income and related cost measured by
    the fair value based method, including tax effects are disclosed.


New Accounting Standards

In June 1997, the Financial Accounting Standards Board issued SFAS
130, "Reporting Comprehensive Income".  SFAS 130 establishes standards
for reporting and display of comprehensive income and its components
(revenues, expenses, gains, and losses) in a full set of general
purpose financial statements.  Specifically, SFAS 130 requires that
all items that meet the definition of components of comprehensive
income be reported in a financial statement for the period in which
they are recognized.  However, SFAS 130 does not specify when to
recognize or how to measure the items that make up comprehensive
income.  SFAS 130 is effective for fiscal years beginning after
December 15, 1997, and early application is permitted. 

Management believes the application of SFAS 130 will not have a
material effect on the Company's future financial statements.















AN-CON GENETICS, INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New Accounting Standards(Continued)

In June 1997, the Financial Accounting Standards Board issued SFAS
131, "Financial Reporting for Segments of Business Enterprise."  SFAS
131 supersedes the  "industry segment" concept of SFAS 14 with a
"management approach" concept  as the basis for identifying reportable
segments.  SFAS 131 is effective for fiscal years beginning after
December 15, 1997 and early application is permitted. Management
believes the application of SFAS 131 will not have a material effect
on the Company's future financial statements.


NOTE 2.  DESCRIPTION OF BUSINESS 

An-Con Genetics, Inc. ("the Company") was incorporated in 1982, under
the laws of the State of Delaware and has its principal executive
office at 1 Huntington Quadrangle, Melville, New York 11747.

Currently, the Company is actively engaged in the business of
manufacturing and marketing medical products and developing related 
technologies. 


Aaron Medical Industries, Inc.

On January 11, 1995 the Company acquired a 100% ownership interest in
Aaron Medical Industries, Inc. a St. Petersburg, Florida based Company
engaged in the manufacturing and distributing of medical products. 
Total assets acquired were valued at $2,012,800 and liabilities
assumed were valued at $681,000.  The assets were valued at $335,800
more than their cost basis which created goodwill.

The goodwill is being written off over 5 years using the straight-line
method.  Because a registration statement was not timely filed the
Aaron shareholders have been given the choice of accepting cash at
$.22 cents per share for their Aaron shares, $1,331,800, or taking the
An-Con shares in exchange.  The Aaron shareholders had 30 days from
the effective day of the registration statement (November 8, 1996) to
accept the shares offered or receive cash.   

The $.22 cents per share valuation for the Aaron shares exchanged was
determined by (a) a separate fair valuation of current assets, which
included (i) discounted value of 















AN-CON GENETICS, INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.  DESCRIPTION OF BUSINESS(CONTINUED) 

Aaron Medical Industries, Inc.(Continued)

receivables (ii) market value of inventory at estimated selling price,
less cost of disposal and reasonable profit allowance, (iii) pre-paid
expenses and security deposits at present value; (b) non-current
assets of plant, property and equipment at current replacement cost;
(c) intangible assets at present value of future benefits; (d) present
value of liabilities, accounts and note payable and long term debt.  
The amount of goodwill was determined by comparing the financial
position of Aaron at December 31, 1994 with the financial position of
similar companies in the same industry.

Aaron's largest current product line is battery operated cauteries. 
Cauteries were originally designed for precise hemostasis in
ophthalmology.  Today they have a variety of uses including sculpting
woven grafts in bypass surgery, vasectomies, evacuation of subungual
hematoma (smashed fingernail) and for stopping bleeding in many types
of surgery.  Aaron manufactures many types of cauteries.

Aaron additionally manufactures a variety of specialty lighting
instruments for use in ophthalmology, as well as a patented  flexible
lighting instrument for general surgery, hip replacement surgery, and
for the placement of endotracheal tubes.  An industrial version of
this light is distributed through a large automotive tool distributor,
and various retail outlets and stores.

Aaron Medical Industries, Inc. manufactures and sells its products
under the Aaron label worldwide and has private label arrangements. 

ECU Technology

On December 15, 1995 the Company's subsidiary, Aaron, purchased design
rights for the technology to manufacture a 30 watt electrosurgical
coagulation device (ECU) for $185,000.  The purchase price was paid
with $100,000 in cash and $85,000 in notes.  The notes were payable
over eighteen months and bear 10% interest per annum.  Monthly payment
on the note was $5,105.85. The notes were paid and retired in 1997.





















AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ECU Technology(Continued)

The ECU was being made by a third party manufacturer.  The Company had
a one year contract with the manufacturer to produce the unit at a
fixed price with a provision for a second year extension at an agreed
upon price.  The Company has hired an electrical engineer to head up
the
project and has relocated the production to the St. Petersburg
facility.  

Aaron has also hired a former director of sales for a physicians office
products Company.  As part of his arrangement he has loaned the Company
$30,000 to be paid back over 2 years at 10% interest.  The note was
retired in 1997.

The Company has developed a 120 watt electrosurgical coagulation
device (ECU) to be marketed in 1998.  Through December 31, 1997 the
Company has spent $94,372 in its development.


NOTE 3.  TRADE ACCOUNTS RECEIVABLE

As of December 31, 1997 the trade accounts receivable were as follows:

Trade accounts receivable        $  805,755
Less: allow. for doubtful accounts     ( 13,930)     

Trade accounts receivable, net   $  791,825


NOTE 4.  PROPERTY, PLANT AND EQUIPMENT

As of December 31, 1997 property, plant and equipment consisted of the
following:

    Equipment                   $ 1,422,180
                                                
    Building                        637,485
    Furniture & Fixtures            229,189
    Leasehold Improvements          230,109
    Molds                            56,742
                                  2,575,705

    Less: Accumulated depreciation(1,136,205)

    Net property, plant, and equipment$ 1,439,500

Depreciation expenses for the years ended December 31, 1997 and 1996
were $216,000 and $166,400 respectively.

Plant, property and equipment includes the capitalized  lease of the 
Company's telephone equipment.  The lease agreement expired in May,
1997 and the assets were retired. The assets and liabilities under
capital leases are recorded at the








AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4.  PROPERTY, PLANT AND EQUIPMENT(CONTINUED)

lower of the present value of the minimum lease payments or the fair
value of the assets.

The assets are amortized over their estimated productive lives. 
Amortization of assets under capital leases is included in
depreciation expense for 1997 and 1996.  This amortization amounted to
$0 and $3,200 for 1997 and 1996 respectively.


NOTE 5. RENTAL AGREEMENTS

On May 6, 1997 an agreement was entered into with the landlord of 734
Walt Whitman Rd., Melville,  New York for a new lease on premises
beginning May 6, 1997 and extending for three years to May 5, 2000. 
The annual rental is $14,722 payable $1,226.83 per month.

The following is a schedule of future minimum rental payments as of
December 31, 1997:

                            Amount    
        1998       $ 14,722
        1999         14,722
        2000          4,907
        
                     $   34,351

Total consolidated rent expense for the Company was $19,294 in 1997
and $24,000 in 1996. 


NOTE 6.  ACCRUED BONUS 

For the year 1996 accrued bonuses earned by the officers and employees
of the Company  amounted to $65,600.  The bonus arrangement based on
employment contracts called for the payment to certain employees of
10% of the profits in excess of $200,000 and 1% of the profits over
$300,000.  
During 1997, the Board of Directors of the Company requested officers
of the Company to waive their rights to contract bonuses.  All
officers agreed and waived their contract bonuses.


NOTE 7.  DUE TO SHAREHOLDERS

A former Chief Executive Officer (CEO) and past President made cash
loans to the Company during the period October 12, 1990 to December
31, 1993 of $180,500.  In addition to these loans, the past CEO
advanced his own cash of $76,100 in the form of loans for












AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7.  DUE TO SHAREHOLDERS(CONTINUED)

product development, travel and other expenses.  Interest on these
loans were at 9% to 12% and had been accrued from inception.  His loan
balance at December 31, 1996 was $ -0- and accrued interest amounted
to $73,800.  Accrued interest has not been paid and the Company has
been negotiating to settle this matter.

In response to the recession offer made by An-Con to Aaron's former
shareholders, certain shareholders owning 46,800 shares have not
contacted the Company.  The recession price owed to these
shareholders, including $6,566 of accrued interest is $25,353.

NOTE 8.  INTANGIBLE ASSETS

At December 31, 1997, the intangible assets consisted of 
the following:
          Balance             Balance
         BeginningAdditions    Write at end of          Accumulated
         of periodat costoffs PeriodAmortization   

Classification:
Patents, 
trademarks, 
patent rights
(ECU Aaron 
1200)     $93,000$1,372  $ --  $94,372  $  --

Patent rights
(Multifunction
Cautery)   59,400    --    --   59,400 32,637

Patent rights
(cauteries)71,500    --    --   71,500 71,213

Patent rights
(ECU Aaron
 800)     210,90011,923    --  222,823             86,693

Boroscope
Technology 37,700    --37,700        0      0
                 
         $472,500      $13,295(37,700)           $448,095$190,543


The cost of patents, trademarks, and copyrights acquired are being
amortized on the straight-line method over their remaining lives,
ranging from 2 to 5 years.  Amortization expense charged to operations
in 1997 and 1996 was $60,1570 and $67,700 respectively.











AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.  INTANGIBLE ASSETS(CONTINUED)

                     Balance                         
                 Beginning and   Accumulated         
                  End of Period Amortization

Goodwill
(Purchase Aaron)    $152,500     $132,000
Goodwill                    
(Purchase Suncoast
Covenant not 
 to compete)          15,500        6,800
(Purchase Suncoast)   20,000        9,200
                                                         
                    $188,000     $148,000


Goodwill represents the excess of the cost of Companies 
acquired over the fair value of their net assets at dates of
acquisition and is being amortized on the straight-line method over 5
years.  Amortization expense charged to operations for 1997 and 1996
were $22,700 and $37,600, respectively.


NOTE 9. LONG-TERM DEBT

The long term debt of the Company includes the mortgages, convertible
debentures and notes payable of the Company. 

        Bonds payable        $  20,000
        Mortgage payable       460,610
        Term loan              108,064
        Borrowing-line of credit260,000
        7% Note payable         23,966
        9% Note payable          6,229

                               878,869
        Less: Current portion  804,762

        Long-term debt       $  74,107


Convertible Debenture
        
As of April 21, 1987, the Company had sold 1,711 convertible debenture
units.  Each unit consisted of $1,000 subordinated debentures and 50
common stock warrants. 

As of December 31, 1997, 1,691 units of debentures had been converted
into common shares of An-Con Genetics, Inc. or have been redeemed. The
remaining number of outstanding debentures was 20 units.  








AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9. LONG-TERM DEBT (CONTINUED)

In February of 1997 the 10 year notes of $78,000 and accrued interest
of $42,580 turned over to New York State came due and the Company
offered each bond holder 2,200 shares of common stock for their $1,000
bond and accrued interest of $550.  Nineteen  bondholders accepted the
offer and forty-three bondholders received cash for their bonds and
accrued interest.  The balance of the bondholders have not redeemed
their bonds or accepted the share offer.


Mortgage Payable

10% - Mortgage payable to former landlord for purchase of property at
7100 30th Avenue North, St. Petersburg, Florida secured on June 26,
1995 for $500,000 payable in monthly installments of $5,673.06
inclusive of interest until July 1,1998 when a balloon payment of $
442,733 is due.                                                      


Notes Payable to a Commercial Bank
                                                                    
The notes payable is for a term loan of $150,000.  The interest on
the term loan is the bank's prime rate plus 1%.  The loan is repaid in
equal monthly payments plus accrued interest based on a three year
amortization.  The bank has a security interest in inventory, accounts
receivable and equipment of the Company (the collaterals).          
                                                                    

Line of Credit - Commercial Bank

The advances under line of credit is limited to the lesser of $400,000 
or 65% of accounts receivable from non affiliated parties.  The annual
interest rate on the loan is the bank's prime rate plus one percent. 
The line expires March 31, 1998.  The bank has a security interest in
inventory, accounts receivable  and equipment of the Company ( the
collateral).
                                                                     

7% Note Payable

7% - Note payable in connection with the purchase
of a probe scope technology payable $779.14 per month
for 48 months self-liquidating beginning November 1996
with the last payment due October, 2000.                                


9% Note Payable

9% - Note payable to insurance premium 
finance Company at $5,661.00 per month 
for 2 months.










AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9. LONG-TERM DEBT (CONTINUED)

The following are maturities of long term debt for each of the next 5
years:

                  1998            $ 804,762
                  1999               59,235
                  2000               14,872

                                  $ 878,869

NOTE 10.  DISCONTINUED OPERATIONS

    The Company's unconsolidated subsidiaries, Automated Diagnostics and
Xenetics Biomedical, discontinued operations in 1987 and 1989,
respectively.  In view of the above and the Company's lack of finances
at the required time, the previously agreed upon mergers have not
taken place.  However, the Company has continued the development of
OmniFix.  In consideration of the 
Company's failure to consummate its agreement to merge, An-Con intends
to deliver 153,333 shares of its common stock to Automated and Xenetic
shareholders on an adjusted basis.


NOTE 11. OPTIONS

As of December 31, 1997, outstanding the options were as follows:

     Number                  Exercise
   of Options                  Price

    677,000     $ 0.750 up to $1.15
    387,000                  $1.125

In 1997, the Company issued 100,000 shares of common stock in exchange
for 200,000 options.  Also, 143,000 warrants were issued to the
Company's employees as a part of the employee benefit plan (Note 16).

The options became exercisable in 1996 and 1997 and expire at various
dates through December, 2007.  At December 31, 1997, 1,064,000 shares
of stock were reserved for that purpose. 

The Company used the Black-Scholes Model to determine the value of the
options with the following weighted average assumptions, zero dividend
yield; expected volatility of 26%; and risk free interest rate of 6%.
(See Note 16 - Employee Benefit Plans)














AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.  NET OPERATING LOSS CARRYFORWARDS 

The tax effects of temporary differences that gave rise to the 
deferred tax assets are as follows:
                                   1997            
Deferred tax assets - current:
Net operating loss carryforwards        $   175,000     

Deferred tax assets - noncurrent:
Net operating loss carryforwards          2,460,115     
Patent rights, 
 primarily due to amortization           (  63,200)     
Total gross deferred tax assets2,523,315           
Less: Valuation allowance     (2,523,315)          
Net deferred tax assets - 
 noncurrent                  $        --           

The Company had NOLs of approximately $7,028,900 at December 31, 1997,
primarily because of the past operating losses associated with
discontinued businesses.  These NOLs and corresponding estimated tax
assets, computed at 35% tax rate, expire as follows:


 Year loss   Expiration      Loss      Estimated
 incurred       Date        Amount     Tax Asset

    1984        1999  $   671,900  $   235,165
    1985        2000      764,000      267,000
    1986        2001      301,000      105,000
    1987        2002      730,000      255,000
    1988        2003      757,000      265,000
    1989        2004      374,000      131,000
    1990        2005      382,000      134,000
    1991        2006      246,000       86,000
    1992        2007    1,004,000      352,000
    1993        2008      465,000      163,000
    1994        2009    1,197,000      419,000
    1995        2010      637,000      223,000
    
    Total               7,528,900    2,635,115
    Current               500,000      175,000
                                 
                     $  7,028,900$ 2,460,115


Under the provisions of SFAS 109, NOLs represent temporary differences
that enter into calculation of deferred tax assets.  Realization of
deferred tax assets associated with the NOL is dependent upon
generating sufficient taxable income prior to their expiration.  

Management believes that there is a risk that certain of these NOLs
may expire unused and, accordingly, has established a valuation
allowance against them.  Although realization is not assured for the
remaining deferred tax 







AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.  NET OPERATING LOSS CARRYFORWARDS (CONTINUED) 


assets, based on the historical trend in sales and profitability,
sales backlog, and budgeted sales of the Company's wholly owned and
consolidated subsidiary, Aaron Medical Industries, Inc.,  management
believes it is more 
likely than not they will be realized through future taxable earnings. 
However, the net deferred tax assets could be reduced in the near term
if management's estimates of taxable income during the carryforward
period are significantly reduced.

The valuation allowance of $2,506,700, as of January 1, 1997 was
reduced as a consequence of recognizing deferred tax assets of $29,757
and NOL carryforward benefit of $99,100.  If an ownership change
occurs in the future, Internal Revenue Code, Section 382 limits the
annual use of a corporation's NOL but does not eliminate the
carryforward.  In each post-ownership change year, the corporation can
use its NOL carry forwards, up to the amount of the "Section 382
Limitation," to offset annual income.  The amount of tax assets
expired in 1997 was $29,757.

Pursuant to Section 382(b), the "Section 382 Limitation" equals the
value of the corporation (immediately before 
the ownership change, Sec. 382(e), multiplied by the long term tax
exempt rate (the highest Long Term AFR in effect for any month in the
three calendar month period ending with the month of the change, Sec.
382(f)). If the corporation does not have income for the year at least
equal to Section 382 limitation, the unused portion of  the limitation
is carried forward to the following year.

Pursuant to the Internal Revenue Code, IRC. Sec. 368(a), the
acquisition of Aaron by An-Con is a considered Type B reorganization. 
The transaction should not limit the net operating loss carryforward
of An-Con.


NOTE 13.  RETIREMENT PLANS

The Company and or its subsidiary provides a tax-qualified profit-
sharing retirement plan under sec.401k of the IRC. (the "Qualified
Plans") for the benefit of eligible employees with an accumulation of
funds for retirement on a tax-deferred basis and provides for 
annual discretionary contribution to individual trust funds.  

All employees are eligible to participate if they have one year of
service to the Company.  The employees may make voluntary contribution
to the plan up to 15% of their annual compensation.  The Company's
contributions to the plan are discretionary but may not exceed 25% of
the first 4% of the annual compensation that an employee contributes
to the plan.  Vesting is graded and depends on the years of service. 
After six years of service the employees are 100% vested.

The Company has made a contribution during 1997 and 1996 of $10,557
and $14,000 respectively, for the benefit of its employees.

The Company also maintains a group health and dental insurance plan. 
The employees are eligible to participate in the plan after three
months of full-time service to the Company.
















AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14. RELATED PARTY TRANSACTIONS

During 1997, a company that was controlled by a board member received
commissions from the purchase of materials the Company used in 
the production of certain of the Company's  products.  The value of
these materials sold to the Company for 1997 and 1996 was $117,700 and
$126,000, respectively.  In May of 1996, the Company, signed a
termination agreement with the supplier of these products which allows
the Company to purchase these products directly from the manufacturer.
In exchange, the Company will pay commissions to the board member for
a period of 3 years based on the amount of material purchased from
certain vendors.


NOTE 15.  PROPERTIES

The Company had moved its executive offices to the Aaron facility
located at 7100 30th Avenue N., St. Petersburg, Florida 33710-2902,
during the first quarter of 1995.  

The Company has additional executive office space at 734 Walt Whitman
Road, Melville, which it leases for $1,226.83 per month.  The lease
runs through the year 2000.

As part of the purchase of 7100 30th Avenue North, St. Petersburg,
Florida (manufacturing facility) the seller acknowledged it had
previously conducted assessments to document environmental conditions
existing on the property, the results of which are set forth in a June
23, 1994 Contamination Assessment Report (CAR) and a January 27, 1995
Contamination Assessment Addendum (CARA).  The Florida Department of
Environmental Protection (FDEP)stated in a letter, dated March 31,
1995, that based on their review of the CARA, the CAR could not be
approved and that additional work was needed to be performed.

In February of 1998, the environmental engineering firm Geo-Ambient
conducted a second addendum to the CAR, (CAR Addendum II) to complete
the additional work requested by the FDEP.  Based on the results of
CAR Addendum II, Geo-Ambient recommended to the FDEP that a "no
further action" status be granted for the site.  However, as of the
date of filing the FDEP has not yet issued a Site Completion
Rehabilitation Order (SCRO). 

Based on the "no further action" finding by Geo-Ambient and the
anticipated issuance of an SCRO by the FDEP management of An-Con has
estimated the present value of the cost of environmental work to be
zero.













AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 16.  COMMITMENTS AND CONTINGENCIES

Environmental conditions -Purchase of Building
(See Note 15 - properties)

Leases

The Company leases administrative facilities under an operating lease
that expires in 2000.  Rental expense was $19,294 in 1997 and $24,400
in 1996.  Minimum rental commitments under all non-cancelable leases
with an initial term in excess of one year are payable as follows:
1998 - $14,722; 1999 - $14,722; 2001 and beyond $4,907.  Commitments
for construction or purchase of property, plant, and equipment
approximated $50,000 at December 31, 1997.


Employment Agreements

The Company has employment agreements with six key employees.  These 
agreements are for terms from 2-5 years and call for salaries of
$35,000 to $118,335.  Bonus arrangements call for 10% of the profits
over $200,000 for the Chairman to 1% of the 
profits over $300,000 for the international sales representative for
profits of the Company.

During 1997 officers waived their right to 1996 bonuses and allowed
the board of directors to determine future bonuses.

Employee Benefit Plans 

In 1996, the Company established stock option plans under which
officers, key employees and non-employee directors may be granted
options to purchase shares of the Company's authorized but unissued
Common Stock.  Under Employee Stock Warrant Plans, the Company issued
warrants for the purchase of 1,064,000 shares of restricted common
stock at exercise prices ranging from $.75 to $1.125, in 1997, 1996.  


Employee Benefit Plans 

The Company has adopted the disclosure-only provision of Statement of
Financial Accounting Standards ("SFAS") No.
123, "Accounting for Stock-Based Compensation."  Accordingly, no
compensation cost has been recognized for the common stock option
plans.  













AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

Employee Benefit Plans (Continued)

Had the compensation cost for the Company's two stock option issuances
been determined based on the fair value at the grant date for awards
in 1996 consistent with  the provisions of SFAS No. 123, the Company's
net earnings and earnings per share would have been reduced to the pro
forma amounts indicated below:         
                            1997    1996   

     Net earnings-as reported    $ 99,191  $407,300
     Net earnings-pro forma65,151 347,300
     Earnings per share before 
      extraordinary items
      -as reported           .0352    .053
     Earnings per share before 
      extraordinary items
      -pro forma             .008     .045

The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following
weighted average assumptions, zero dividend yield; expected volatility
of .26%; risk-free interest rate of 6%; and expected lives of 3 years.

Options currently expire no later than ten years from the grant date. 
When proceeds are received by the Company from exercises, they are
credited to Common Stock and Capital in excess of par value.  


Legal Proceeding 


Speiser

On December 29, 1992, Robert Speiser, the then Chief    
Executive Officer of An-Con, obtained a confession of
judgement in the Supreme Court, State of New York,
counties of Suffolk and Westchester for amounts due on
loans to the Company of $92,239 and $190,957 inclusive
of interest at 12% to May 27, 1992 and 9% thereafter. 

These loans represent amounts claimed by Mr. Speiser to
have been expended on behalf of the Company and funds
loaned to the Company.  As reported to the Board of 
Directors, Mr. Speiser's actions were motivated solely to
deter threatened action by a landlord to file a judgement
at that time of $41,700 in rental arrears on the
Melville, NY lease.  











AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

Speiser (Continued)

Mr. Speiser has indicated that he does not intend to
enforce this judgement.  On March 29, 1993 and in
subsequent letters of instruction to the Sheriff of
Suffolk County, Mr. Speiser requested that the execution
of the above-mentioned judgements be held in abeyance for
a 60 day period, until August 30, 1993.  On February 28,
1994, the executive order expired.  As of  December 13,
1996, the Company had repaid $235,100 of the principal
amount upon which the aforesaid judgements were based.   

The Company is pursuing a settlement of this matter.
                            
Product Liability

The Company currently has product liability insurance which it
believes to be adequate for its business.  The Company's existing
policy expires in May, 1998.


Regulation

In June, 1995 pursuant to an inspection of the facilities of the
Company's subsidiary Aaron, the FDA issued a warning letter advising
of federal good manufacturing practices ("GMP") deficiencies.  The
letter cited, among other things, the Company's failure (a) to follow
its own complaint handling procedure to immediately review, evaluate,
investigate and document complaint; (b) to evaluate significant
equipment changes in manufacturing processes and quality assurance
tests; (c) to have and implement documented formal change control
procedures for changes made to devices or manufacturing processes; (d)
to have, follow and document conformance with appropriate written
finished device test procedures assuring devices meet all finished
specifications prior to distribution; (e) to have, follow and document
conformance with written procedures for acceptance of components; (f)
to conduct plan in periodic orders of the quality assurance and good
manufacturing practice programs in accordance with written procedures;
(g) to establish and implement adequate record keeping procedures. 
Until such deficiencies were removed the  FDA indicated it was in no
position to restore GMP standing to the Company or permit approval of
any pending pre-market submissions by the Company.
















AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

Regulation (Continued)

On July 12, 1995, the FDA indicated that while the Company's response
appeared adequate, further verification was needed before the FDA
would be in a position to support the approval of any pending pre-
market submissions, or related Export Certificates for the Company's's
products.  After follow-up correspondence, on December 15, 1995, the
FDA acknowledged that the Company's corrective action plan 
dated November 27, 1995, appeared adequate.  However, the FDA
determined that it was necessary to set another evaluation date for
May, 1996 to ascertain whether the Company was meeting GMP guidelines. 
This date was extended to March, 1997 when the FDA made its
inspection.  The FDA has cleared the Company and the Company is
presently submitting applications for new products to the FDA.
 
Bank Line of Credit and Term Loan

The bank line of credit and term loan require the Company:

1. To maintain a current ratio of not less than 1.10 to one, senior
debt to net worth ratio of not more than 1.5 to one, and an interest
coverage ratio of not less than eight to one.

2. Not to expend more than $400,000 for acquisition of fixed assets,
in the course of the year.

3. To submit its audited financial statements, forms C, and 10Q, and
accounts payable and receivable aging schedules.

4. Maintain its depository and cash management accounts with the bank.

5. Not to guarantee obligations of any other person or encumber its
assets with any mortgage, security deed, or lien other than security
interests required by the bank loan agreement.

6. Not to default in any material contract with third parties.

























AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17.  EARNING PER SHARE

The earnings per share were as follows:

                        For the Year Ended 1997
                         Income   Share Per Share
Basic Earning Per Share
Income before extraordinary 
items                $290,176 8,186,256  $.0354

Effect of Dillutive securities
Convertible shares of Xenetics
Biomedical, Inc. and Automated
diagnostics, Inc.              153,333

warrants                       104,383     

Diluted Earnings per Share            

Income before extraordinary
 items assuming conversion 
 of securities       $290,176    8,443,972    $.0344

<PAGE>
AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17.  EARNING PER SHARE (CONTINUED)

                        For the Year Ended 1996
                         Income   Share Per Share
Basic Earning Per Share
Income before extraordinary 
items                  $415,543 7,663,872 .0531   

Effect of Dillutive securities
Convertible shares of Xenetices
Biomedical, Inc. and Automated           
diagnostics, Inc.                 153,333

Diluted Earnings per Share

Income before extraordinary
 items assuming conversion
 of securities          $415,543    7,817,205 $.0521     


Warrants to purchase 387,000 shares of common stock at $1 1/8 during
1997 and 921,000 to purchase shares of common stock at various prices
in 1996 were not included in the computation of diluted earnings per
share because warrants' exercise prices were greater than the average
price of common shares in 1997 and 1996 respectively.   


NOTE 18. SUBSEQUENT EVENTS

Bank Line of Credit

On January 29, 1997 the Company signed notes which effectively set up
a term loan credit line with a commercial bank for $550,000.  The line
of credit terminates on April 30, 1998 unless renewed or extended by
the bank in writing.  The agreement required the Company pay off the
$260,000 outstanding balance of the loan by April 1, 1998 and
subsequently apply for the renewal of the line of credit.  However,
since the repayment of the loan has been delayed the Company is in
technical default.  The management plans to renew the loan.  The bank
has taken a security interest in accounts receivable, inventories and
equipment.







<PAGE>
AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 18. SUBSEQUENT EVENTS (CONTINUED)

Acquisition of BSD Development Beta Corporation

On February 9, 1998, the Company exchanged 5,000,000 shares of its
common stock for all preferred and  common shares of BSD Development
Beta Corporation (BSD)and assumed an 8% Convertible Debenture of BSD,
in principal amount of $750,000.  As a part of the agreement with the
sellers, the Company acquired through BSD $250,000 cash, a secured
note receivable of $750,000, due in May 1998, and certain equipment
valued at $2,000,000.  The equipment is being used for coating
electro-surgical blades and other medical devices using DYLYN
technology under a management agreement with Advance Refractory
Technologies (ART), the seller of the equipment which has agreed to
operate and maintain the equipment.

As a part of the agreement with ART, the Company obtained an
exclusive ten-year renewable license to use the DYLYN Technology for
coating specified medical products.  

Patent Infringement Lawsuit

On January 22, 1998, Aaron and MegaDyne Medical Products, Inc.(MMP),
a Utah Corporation, entered an agreement to settle an action that MMP
had brought against the Company, in District court of Utah, for
infringing a patent for an electrosurgical product (the Patent). 
Aaron agreed to pay $150,000 for damages resulting from the patent
infringement, for a period, of six months not to manufacture or sell
any electrosurgical instrument that infringes the Patent, and to
provide MMP with a list of customers who had purchased the infringing
product.<PAGE>
AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 19. INDUSTRY SEGMENT REPORTING 

The Company's principal markets are the United States, Europe, and
Latin America, with the U.S. and Europe being the largest markets
based on revenues.  The 

Company's major products include cauteries, Benda-A-lights, nerve
locators, reusable pen lights and electrodes.  Cauteries, disposable
and replaceable, account for 40% and 50% of Company's sales for 1996
and 1996, respectively.  

One significant customer accounted for 9% and 14% of revenues in 1997
and 1996, respectively.  In 1997 that customer accounted for $.6
million of non-medical sales which is 65% of that segments sales. The
Company's ten largest customers accounted for approximately 51% of
net revenues for 1997.  At December 31, 1997, the same ten customers
accounted for approximately 47% of outstanding accounts receivable.  

Summary information by geographic area and significant industry
segment for years ended December 31,1997 and 1996 were as follows:
                     Operating                   
Identifiable           Sales   Income    Assets

     1997 - (in thousands)
     Geographic Area
    United States  $ 5,602   $   258  $ 3,731
    Europe           1,769        81      107     

                   $ 7,371    $  340  $ 3,838

    Segment
    Medical Products         $ 6,409        $  302   $ 3,282
    Non medical products         962       38  556

                   $ 7,371    $  340  $ 3,838

                    Operating       
    Identifiable      Sales   Income    Assets

     1996-(in thousands) 
     Geographic Area
     United States  $  5,980   $   729 $ 3,803
    Europe            1,406      166       96
    Latin America       100       13       --     

                   $  7,486  $   908  $ 3,899

    Segment
    Medical Products        $  6,181  $   850$ 3,236
    Non medical products       1,305       58  663

                   $  7,486  $   908  $ 3,899

                            







AN-CON GENETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 19. INDUSTRY SEGMENT REPORTING (CONTINUED)

                          1997      1996

Total assets            $ 102     $ 96
Total liabilities         -0-       -0-
Net property, plant
 and equipment            -0-       -0-

The Company had no assets (other than certain trade receivables) or
liabilities outside the United States, in the two years ended December
31, 1997.  

During 1997, a substantial portion of  the Company's consolidated net
sales and consolidated income from operations was derived from foreign
operations.  Foreign operations are subject to certain risks inherent
in conducting business abroad, including price and exchange controls,
limitations on foreign participation in local enterprises, possible
nationalization or expropriation, potential default on the payment of
government obligations with attendant impact on private enterprise,
political instability and health care regulation and other restrictive
governmental actions.  Changes in the relative value of currencies
take place from time to time and could adversely affected the
Company's results of operations and financial condition.  The future
effects of these fluctuations on the operations of the Company's and
its subsidiaries are not predictable.  































BLOOM AND COMPANY
50 CLINTON STREET
HEMPSTEAD, NY 11550
TEL. 516 486-5900
FAX  516 486-5476






CONSENT OF CERTIFIED PUBLIC ACCOUNTANT


We consent to the incorporation by reference in this Annual Report on
Form 10-KSB of An-Con Genetics, Inc. of our report dated April 10,
1998 and April 23, 1998, included in the Annual Report to Stockholders
of An-Con Genetics, Inc.





Bloom and Company
Hempstead, New York
April 23, 1998





































BLOOM AND COMPANY
50 CLINTON STREET
HEMPSTEAD, NY 11550
TEL. 516 486-5900
FAX  516 486-5476






INDEPENDENT AUDITORS' REPORT


To the Board of Directors
and Shareholders of
An-Con Genetics, Inc.

We have audited the accompanying consolidated balance sheet of An-Con
Genetics, Inc. and subsidiary as of December 31, 1997 and the related
consolidated statements of operations and shareholders' equity, and
cash flows for the years ended December 31, 1997 and 1996.  These
consolidated financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion the financial statements referred to above present
fairly, in all material respects, the financial position of An-Con
Genetics, Inc. and subsidiary as of December 31, 1997 and the results
of their operations, and their cash flows for the years ended December
31, 1997 and 1996 in conformity with generally accepted accounting
principles.



BLOOM AND COMPANY
Hempstead, New York
April 10, 1998
Except for the notes to the Financial Statements 
for which the date is April 23, 1998.

c:10k972.wpd