AGRITOPE INC, S-1/A, 1997-10-27

AGRITOPE INC
S-1/A, 1997-10-27
COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH

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REGISTRATION NO. 333-34597
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------

FORM S-1
AMENDMENT NO. 2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------

AGRITOPE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<CAPTION>
<S> <C> <C>
Oregon 8731 93-0820945
(STATE OF INCORPORATION) (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER IDENTIFICATION NUMBER)
CLASSIFICATION CODE NUMBER)
</TABLE>

8505 S.W. Creekside Place, Beaverton, Oregon 97008
(503) 641-6115
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)

Adolph J. Ferro, Ph.D., President and Chief Executive Officer
Agritope, Inc.
8505 S.W. Creekside Place, Beaverton, Oregon 97008
(503) 641-6115
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

Copies to:

Erich W. Merrill, Jr. Brian G. Booth
Miller, Nash, Wiener, Hager Tonkon, Torp, Galen, Marmaduke
& Carlsen LLP & Booth
111 S.W. Fifth Avenue Suite 1600
Portland, Oregon 97204-3699 888 S.W. Fifth Avenue
(503) 224-5858 Portland, Oregon 97204
(503) 221-1440

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
DISTRIBUTION TO THE PUBLIC: As soon as practicable after
the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /-/

If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. /-/ --------

If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. /-/ --------------------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /-/

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================

<PAGE>

[Epitope letterhead]

[Date]

Dear Shareholder:

We are pleased to inform you that the Board of Directors has authorized
a spin-off of Agritope, Inc. To effect the spin-off, Epitope, Inc. is
distributing the Agritope Common Stock it now holds to Epitope shareholders as a
dividend. After the distribution, Agritope will operate as an independent public
company.

In connection with the spin-off, Agritope is raising working capital by
selling newly issued Agritope Common Stock to certain investors in a private
placement. Agritope could not operate as an independent company without this
additional financing. The shares being distributed as a dividend to Epitope
shareholders are expected to represent approximately ---- percent of the
Agritope Common Stock outstanding after the Distribution and private placement
of common stock.

You will receive one share of Agritope Common Stock for every -----
shares of Epitope Common Stock that you owned on the record date of
- -------------, 1997. You will receive cash for any fractional share of Agritope
Common Stock that you would have received. The distribution should be tax-free
to you, except for cash received for any fractional shares. You should consult
your own tax advisor about the tax consequences of the distribution to you.

You do not need to take any action for the spin-off to occur. You do
not have to pay for the shares of Agritope Common Stock that you will receive,
nor do you have to surrender or exchange shares of Epitope Common Stock in order
to receive shares of Agritope Common Stock. The number of shares of Epitope
Common Stock you own will not change as a result of the spin-off.

The attached Information Statement/Prospectus gives detailed
information about Agritope and the spin-off. We encourage you to read it
carefully.

Very truly yours,

<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Information Statement/Prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which such offer, solicitation, or sale would
be unlawful prior to registration or qualification under the securities laws of
any such state.

SUBJECT TO COMPLETION, DATED OCTOBER 24, 1997

INFORMATION STATEMENT/PROSPECTUS

AGRITOPE, INC.

DISTRIBUTION OF UP TO -------- Shares of Common Stock
OF AGRITOPE, INC., TO SHAREHOLDERS OF EPITOPE, INC.

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

This Information Statement/Prospectus is being furnished to the
shareholders of Epitope, Inc.("Epitope"), in connection with the spin-off of
Epitope's subsidiary Agritope, Inc. ("Agritope" or the "Company"). The spin-off
will be accomplished through a dividend distribution (the "Distribution") to
Epitope shareholders of all the Agritope common stock, no par value, including
associated preferred stock purchase rights ("Agritope Stock"), held by Epitope.
As a result of the Distribution, Agritope will cease to be a subsidiary of
Epitope and will operate as an independent public company. Neither Epitope nor
Agritope will receive any cash or other proceeds from the Distribution.

Epitope will make a distribution to holders of record of Epitope common
stock, no par value ("Epitope Stock"), on --------------, 1997 (the "Record
Date") of one share of Agritope Stock for every --- shares of Epitope Stock
outstanding. On the Record Date, Epitope had outstanding ------------ shares of
Epitope Stock, its only outstanding class of stock. Therefore, an aggregate of
approximately --------------- shares of Agritope Stock will be issued in the
Distribution. Epitope expects that the Distribution will occur on or about
- ----------, 1997 (the "Distribution Date").

In order to finance the operations of Agritope after the Distribution,
Agritope will sell at least 1,343,000 shares of Agritope Stock in a private
placement to certain investors (the "Private Placement") pursuant to Regulation
S under the Securities Act of 1933, as amended (the "Securities Act"), for an
aggregate price of at least $9.4 million, immediately following the
Distribution. The Epitope board of directors (the "Epitope Board") believes that
these funds are sufficient to support the operations of Agritope as a separate
business for a period of not less than two years following the Distribution.
Agritope could not operate as an independent entity without the financing to be
raised in the Private Placement. The shares of Agritope Stock sold in the
Private Placement will represent at least 27 percent of the Agritope Stock
outstanding following the Distribution, diluting the percentage of Agritope
owned by Epitope's current shareholders as a result of the Distribution.
Accordingly, the shares of Agritope Stock distributed to Epitope shareholders in
the Distribution will represent approximately -- percent of all Agritope Stock
outstanding after completion of the Distribution and the Private Placement.

Fractional shares of Agritope Stock will not be issued in the
Distribution. If the aggregate number of shares due an Epitope shareholder of
record includes a fraction of a share, Epitope will pay the cash value of the
fractional share to the holder, based on the trading price of Agritope Stock as
of the close of trading on the Distribution Date. Shareholders who own their
stock in "street name" through a broker or other nominee listed as the holder of
record will have their fractional shares handled according to the practices of
the broker or nominee.

Currently, no public market for Agritope Stock exists. Agritope has
applied to have Agritope Stock approved for quotation on The Nasdaq SmallCap
Market under the symbol "AGTO." Agritope Stock received in the Distribution will
be freely tradeable by nonaffiliates of Agritope.

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

PERSONS RECEIVING THIS INFORMATION STATEMENT/PROSPECTUS SHOULD
CAREFULLY CONSIDER THE FACTORS SPECIFIED UNDER THE CAPTION "RISK FACTORS" ON
PAGE 10.

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

NO VOTE OF SHAREHOLDERS IS REQUIRED IN CONNECTION WITH THE DISTRIBUTION.
NO PROXIES ARE BEING SOLICITED AND YOU ARE REQUESTED NOT TO SEND A PROXY.

----------------------------
<PAGE>

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS INFORMATION STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------------

The date of this Information Statement/Prospectus is ---------, 1997.

<PAGE>

TABLE OF CONTENTS

AVAILABLE INFORMATION...................................................... 2

NOTE REGARDING FORWARD-LOOKING STATEMENTS.................................. 2

SUMMARY .................................................................. 3
The Distribution.................................................. 3
Agritope ......................................................... 6
Summary of Risk Factors........................................... 6
Summary Financial Data............................................ 8

RISK FACTORS............................................................... 10

INTRODUCTION............................................................... 14

THE DISTRIBUTION........................................................... 14
Reasons for the Distribution...................................... 14
Manner of Effecting the Distribution.............................. 15
Trading of Agritope Stock......................................... 16
Certain Federal Income Tax Consequences........................... 17

PRIVATE PLACEMENT.......................................................... 19

RELATIONSHIP BETWEEN AGRITOPE AND EPITOPE AFTER THE DISTRIBUTION........... 19
Separation Agreement.............................................. 20
Employee Benefits Agreement....................................... 20
Tax Allocation Agreement.......................................... 22
Transition Services Agreement..................................... 22

SELECTED FINANCIAL DATA.................................................... 24

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS................. 25
Overview ......................................................... 25
Results of Operations............................................. 26
Liquidity and Capital Resources................................... 27

DESCRIPTION OF BUSINESS.................................................... 28
General ......................................................... 28
Agritope Biotechnology Program.................................... 29
Commercialization Strategy........................................ 33
Grants and Contracts.............................................. 33
Vinifera ......................................................... 34
Competition....................................................... 35
Government Regulation............................................. 35
Patents and Proprietary Information............................... 36
Personnel......................................................... 37
Scientific Advisory Board......................................... 37
Properties........................................................ 37
Legal Proceedings................................................. 37

DIVIDEND POLICY............................................................ 37

TRANSFER AGENT............................................................. 38

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<PAGE>

MANAGEMENT................................................................. 39
Directors and Executive Officers.................................. 39
Committees of the Board........................................... 41
Compensation of Directors......................................... 41
Executive Compensation............................................ 42
Grants of Options to Purchase Agritope Stock...................... 42
Aggregated Option Exercises in Last Fiscal Year and Outstanding
Options for Agritope Stock.......................................43
Employment; Change in Control Agreements.......................... 43

1997 STOCK AWARD PLAN...................................................... 44
General ......................................................... 44
Purpose ......................................................... 44
Awards and Eligibility............................................ 44
New Options....................................................... 44
Description of Terms of Awards.................................... 45
Federal Income Tax Consequences................................... 46

1997 EMPLOYEE STOCK PURCHASE PLAN.......................................... 48
General ......................................................... 48
Purpose ......................................................... 48
Subscriptions..................................................... 48
Federal Income Tax Consequences................................... 49

EMPLOYEE STOCK OWNERSHIP PLAN.............................................. 49

401(K) PROFIT SHARING PLAN................................................. 50

CERTAIN TRANSACTIONS....................................................... 51

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............. 51

SHARES ELIGIBLE FOR FUTURE SALE............................................ 52

DESCRIPTION OF AGRITOPE CAPITAL STOCK...................................... 53
Agritope Common................................................... 53
Agritope Preferred................................................ 53
Agritope Warrants................................................. 53
Preemptive Rights................................................. 54
Shareholder Rights Plan........................................... 54
Other Anti-takeover Measures...................................... 55
Indemnification of Directors and Officers; Limitation of
Liability; Insurance............................................ 56

LEGAL MATTERS.............................................................. 57

EXPERTS .................................................................. 57

- ii -

<PAGE>

AVAILABLE INFORMATION

After the Distribution of Agritope Stock, Agritope will be subject to
the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Accordingly, Agritope will file annual, quarterly
and special reports, proxy statements and other information with the Securities
and Exchange Commission (the "Commission"). You may read and copy the
information Agritope files without charge at the Commission's public reference
rooms at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at Suite 1400, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661 and at Seven World Trade Center, 13th Floor, New York, New York
10048. You may also obtain the information from commercial document retrieval
services and at the Internet web site maintained by the Commission at
"http://www.sec.gov."

Agritope filed a Registration Statement on Form S-1 (together with all
amendments, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), to register Agritope Stock with the Commission.
This Information Statement/Prospectus is part of the Registration Statement. As
allowed by Commission rules, this Information Statement/Prospectus omits some
information included in the Registration Statement. Statements contained in this
Information Statement/Prospectus about contracts or other exhibits to the
Registration Statement are not necessarily complete and are qualified by the
full text of the exhibits. You may read and copy the Registration Statement,
including the exhibits, as described above.

Agritope intends to distribute to shareholders annual reports
containing audited financial statements, but does not plan to furnish
shareholders with quarterly reports containing unaudited interim financial
information for the first three fiscal quarters of each fiscal year.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in this Information Statement/Prospectus about future events
or performance are "forward- looking statements." The forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results to be materially different from those expressed or implied by the
forward-looking statements. Certain of these factors are discussed in more
detail under the caption "Risk Factors" and elsewhere in this Information
Statement/Prospectus. Given these uncertainties, shareholders are cautioned not
to place undue reliance on the forward-looking statements. Agritope does not
intend to update any forward-looking statements.

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<PAGE>

SUMMARY

This summary highlights certain information contained elsewhere in this
Information Statement/Prospectus. To better understand the Distribution and
Agritope you should read this entire document, including the section "Risk
Factors" beginning on page 10. Capitalized terms used but not defined in this
summary have the meanings given elsewhere in this Information
Statement/Prospectus.

THE DISTRIBUTION

Distributing Corporation and Business ....Epitope, Inc., an Oregon corporation.
Epitope uses biotechnology to develop
and market medical diagnostic
products.

DISTRIBUTED CORPORATION AND
BUSINESS..................................Agritope, Inc., an Oregon corporation,
currently a wholly owned subsidiary of
Epitope. Agritope is a biotechnology
company specializing in the
development of new fruit and vegetable
plant varieties for sale to the fresh
produce industry. Agritope is also the
majority owner of Vinifera, which
management believes offers one of the
most technically advanced grapevine
plant propagation and disease
screening and elimination programs
available to the wine and table grape
production industry. See
"Summary--Agritope" and "Description
of Business."

FINANCING OF AGRITOPE ................... In order to finance the operations of
Agritope after the Distribution,
Agritope will sell at least 1,343,000
shares of Agritope Stock at a price of
$7 per share in the Private Placement
for an aggregate price of at least
$9.4 million, immediately following
the Distribution. The Epitope board of
directors (the "Epitope Board")
believes that these funds are
sufficient to support the operations
of Agritope as a separate business for
a period of not less than two years
following the Distribution. Agritope
could not operate as an independent
entity without the financing to be
raised in the Private Placement. See
"Private Placement."

DISTRIBUTION RATIO........................Each Epitope shareholder will receive
one share of Agritope Stock for every
---- shares of Epitope Stock held as
of the Record Date.

RECORD DATE...............................Close of business on --------------,
1997.

DISTRIBUTION DATE.........................On or about -----------------------,
1997.

DISTRIBUTION AGENT........................ChaseMellon Shareholder Services,
L.L.C.

SHARES TO BE DISTRIBUTED..................An aggregate of approximately ---
million shares of Agritope Stock will
be issued in the Distribution.
Following the Distribution and the
Private Placement, approximately
------ million shares of Agritope
Stock will be outstanding. Shares

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<PAGE>

distributed to Epitope shareholders in
the Distribution will represent
approximately -- percent of all
Agritope Stock outstanding following
the Distribution.

FRACTIONAL SHARE INTERESTS................Fractional shares of Agritope Stock
will not be issued in the
Distribution. If the number of shares
of Agritope Stock to be issued to any
record holder of Epitope Stock
includes a fraction of a share,
Epitope will pay an amount in cash for
the fractional share. See "The
Distribution--Manner of Effecting the
Distribution."

TRADING MARKET............................Agritope has applied to include
Agritope Stock for quotation on The
Nasdaq SmallCap Market under the
symbol "AGTO." There is currently no
public market for Agritope Stock.
There can be no assurance that an
active trading market in shares of
Agritope Stock will develop after the
Distribution. See "The
Distribution--Trading of Agritope
Stock" and "Risk Factors-- No
Assurance as to Market Performance of
Agritope Stock."

PRIMARY PURPOSES OF THE DISTRIBUTION......The primary purpose of the
Distribution is to enable Agritope to
raise immediately needed working
capital through the sale of its own
equity securities. The Distribution
also is intended to permit Epitope and
Agritope each to (i) adopt strategies
and pursue objectives appropriate to
its specific business; (ii) enable
management to concentrate attention
and financial resources on its core
business; (iii) make acquisitions and
enter into transactions with strategic
partners by issuing its own equity
securities; (iv) implement incentive
compensation arrangements that are
more directly based on results of
operations of its separate business;
and (v) be recognized and evaluated by
the financial community as a separate
and distinct business. See "The
Distribution--Reasons for the
Distribution."

TAX CONSEQUENCES..........................Epitope has received an opinion of
counsel that the Distribution will be
treated as a tax free transaction to
Epitope's shareholders. Epitope has
not applied, and does not intend to
apply, for a ruling from the Internal
Revenue Service to that effect. See
"The Distribution--Certain Federal
Income Tax Consequences."
RELATIONSHIP WITH EPITOPE
AFTER THE DISTRIBUTION ...................Following the Distribution, Epitope
will not own any Agritope Stock, and
Epitope and Agritope will be operated
as independent public companies.
Epitope will not make financing of any
kind available to Agritope after the
Distribution. Epitope and Agritope
will, however, continue to have a
relationship as a result of agreements
being entered into between Epitope and
Agritope in connection with the
Distribution, which include a
Separation Agreement, an

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<PAGE>

Employee Benefits Agreement, a Tax
Allocation Agreement and a Transition
Services and Facilities Agreement (the
"Transition Services Agreement"). In
addition, two individuals will
continue to serve as directors of both
Agritope and Epitope after the
Distribution. Except as set forth in
the agreements listed above or as
otherwise described in this
Information Statement/Prospectus,
Epitope and Agritope will cease to
have any material relationship with
each other following the Distribution.
See "Relationship Between Agritope and
Epitope After the Distribution" and
"Management--Directors and Executive
Officers."

CERTAIN ANTI-TAKEOVER
CONSIDERATIONS............................Certain provisions of Agritope's
restated articles of incorporation
("Articles") and restated bylaws
("Bylaws") and of Oregon law could
make it more difficult for a party to
acquire, or discourage a party from
attempting to acquire, control of
Agritope without approval of the
Agritope board of directors (the
"Agritope Board"). Agritope has
adopted a Shareholder Rights Plan (the
"Rights Agreement") designed to
protect Agritope and its shareholders
from inequitable offers to acquire
Agritope. In addition, Agritope's
Articles and Bylaws contain certain
provisions designed to deter changes
in the composition of the Agritope
Board, and to allow the Agritope Board
to issue preferred stock ("Agritope
Preferred") and common stock
("Agritope Common") without
shareholder approval. Each of these
provisions may discourage tender
offers or other bids for Agritope
Stock. See "Risk
Factors--Anti-takeover Considerations"
and "Description of Agritope Capital
Stock."

DIVIDEND POLICY ..........................Agritope does not anticipate paying
dividends in the foreseeable future.

PRIVATE PLACEMENT ........................Agritope will sell at least 1,343,000
shares of Agritope Stock in the
Private Placement at a price of $7 per
share for an aggregate price of at
least $9.4 million, immediately
following the Distribution.
Subscribers in the Private Placement
have deposited the purchase price for
their shares of Agritope Stock in an
escrow account pending the completion
of the Distribution and the closing of
the Private Placement. The shares of
Agritope Stock sold in the Private
Placement will represent at least 27
percent of the Agritope Stock
outstanding following the Distribution
and the Private Placement. See
"Private Placement."

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<PAGE>

AGRITOPE

Agritope is a biotechnology company specializing in the development of
new fruit and vegetable plant varieties for sale to the fresh produce industry.
The Company is utilizing its patented ethylene control technology to develop a
wide variety of fruits and vegetables that are resistant to the decaying effects
of ethylene. The Company also recently acquired certain rights to certain
proprietary genes from the Salk Institute for Biological Studies (the "Salk
Genes"). Agritope believes that the Salk Genes may have the potential to confer
disease resistance, enhance crop yield, control flowering and enhance gene
expression in plants. Agritope has an option to obtain a worldwide license to
use the Salk Genes in a wide range of fruit and vegetable species.

The Company consists of two units: Agritope Research and Development
and Vinifera. Agritope Research and Development provides biotechnology and
product development capabilities to strategic partners and provides disease
screening and elimination programs to its Vinifera subsidiary. Through Vinifera,
Agritope offers one of the most technically advanced grapevine plan propagation
and disease screening and elimination programs available to the wine and table
grape production industry.

Agritope was incorporated under Oregon law in 1987. Agritope has had a
history of significant operating losses since its incorporation. Its accumulated
deficit was approximately $38.9 million as of June 30, 1997.

Agritope's principal offices are located at 8505 S.W. Creekside Place,
Beaverton, Oregon 97008. Its telephone number is (503) 641-6115.

SUMMARY OF RISK FACTORS

Epitope shareholders who will receive Agritope Stock in the
Distribution should carefully consider the following risk factors as well as
other information presented elsewhere in this Information Statement/Prospectus.
See "Risk Factors."

No Operating History as an Independent Company. Since 1987, Agritope
has operated as a wholly owned subsidiary of Epitope. Therefore, it does not
have a recent operating history as an independent company. After the
Distribution Date, Epitope will not provide any additional operating capital to
Agritope and will provide only the limited administrative and other support
provided for in the Transition Services Agreement. There can be no assurance
that Agritope will develop the financial, administrative, and managerial
structure necessary to operate as an independent public company.

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<PAGE>

seek or be required to raise substantial additional funds through public or
private financings, collaborative relationships or other arrangements. There can
be no assurance that financing will be available on satisfactory terms, if at
all. Additional equity financing may be dilutive to shareholders, and debt
financing, if available, may involve significant interest expense and
restrictive covenants.

Uncertainties Relating to Patents and Proprietary Information. Agritope
has obtained certain patents, has licensed rights under other patents, and has
filed a number of patent applications. Agritope anticipates filing patent
applications for protection of future products and technology. There can be no
assurance that patents applied for will be obtained, that existing patents to
which Agritope has rights will not be challenged, or that the issuance of a
patent will give Agritope any material advantage over its competitors in
connection with any of its products. Competitors may be able to produce products
competing with a patented Agritope product without infringing on Agritope's
patent rights.

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<PAGE>

SUMMARY FINANCIAL DATA
(In thousands, except per share data)

The following table presents summary financial data of Agritope and its
subsidiaries. The balance sheet data at September 30, 1996, and 1995 and the
operating results data for the years ended September 30, 1996, 1995, and 1994
have been derived from audited consolidated financial statements and notes
thereto included in this Information Statement/Prospectus. The balance sheet
data at June 30, 1997 and the operating results data for the nine months ended
June 30, 1997 and 1996 have been derived from unaudited interim condensed
consolidated financial statements and notes thereto included in this Information
Statement/Prospectus and, in the opinion of management, include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position and results of operations for the interim
periods. Results for the nine months ended June 30, 1997, may not be indicative
of full-year results. This information should be read in conjunction with
Agritope's consolidated financial statements and notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30 YEAR ENDED SEPTEMBER 30
1997 1996 1996 1995(1) 1994(1)
(UNAUDITED)
CONSOLIDATED OPERATING RESULTS
<S> <C> <C> <C> <C> <C>
Revenues......................................... $ 668 $ 514 $ 585 $2,110 $2,213
Operating costs and expenses..................... 4,063 2,055 2,821 9,920 11,703
Other expense, net............................... (3,060)(2) (192) (265) (235) (314)
Net loss......................................... (6,455) (1,733) (2,501) (8,045) (9,804)
Pro forma net loss per share (3)................. (3.22) (.86) (1.25) (4.02) (4.90)
Pro forma shares used in
per share calculations (3)..................... 2,000 2,000 2,000 2,000 2,000
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1997 SEPTEMBER 30
AS ADJUSTED(4) ACTUAL 1996 1995
(UNAUDITED)
CONSOLIDATED BALANCE SHEET
<S> <C> <C> <C> <C>
Working capital (deficiency)..................... $10,565 $1,815 $(3,163) $846
Total assets..................................... 15,880 7,130 5,670 4,067
Long-term debt................................... 16 16 - 22
Convertible notes, due 1997...................... - - 3,620 3,620
Accumulated deficit.............................. (38,933) (38,933) (32,478) (29,976)
Shareholder's equity............................. 13,865 5,115 1,008 75
</TABLE>

(1) Data for 1995 and 1994 include revenues of $2.0 million and $2.2
million, and operating losses of $3.8 million and $6.4 million,
respectively, attributable to business units which were divested. See
Note 3 to consolidated financial statements.

(2) Includes non-cash charges of $1.9 million, reflecting the permanent
impairment in the value of Agritope's investment in affiliated
companies, and $1.2 million for the conversion of Agritope convertible
notes into Epitope Stock at a reduced price. See Note 11 to
consolidated financial statements.

(3) Net income (loss) per share is presented on a pro forma basis assuming
that the Distribution of Agritope Stock pursuant to the Agritope
spin-off had occurred on October 1, 1993.

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<PAGE>

(4) The capitalization of Agritope as adjusted reflects the effects of the
Private Placement of approximately 1,343,000 shares of Agritope Stock
for aggregate proceeds of $9.4 million, less issuance costs of
$650,000.

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<PAGE>

RISK FACTORS

Epitope shareholders who will receive Agritope Stock in the
Distribution should carefully consider the following risk factors, as well as
the other information provided elsewhere in this Information
Statement/Prospectus.

No Operating History as an Independent Company. Since 1987, Agritope
has operated as a wholly owned subsidiary of Epitope. Therefore, it does not
have a recent operating history as an independent company. After the
Distribution Date, Epitope will not provide any additional operating capital to
Agritope and will provide only the limited administrative and other support
provided for in the Transition Services Agreement. See "Relationship Between
Agritope and Epitope After the Distribution." There can be no assurance that
Agritope will be able to develop successfully the financial, administrative, and
managerial structure necessary to operate as an independent public company.

History of Losses; Uncertainty of Future Profitability. Agritope has
experienced significant operating losses since inception and, as of June 30,
1997, had an accumulated deficit of $38.9 million. Agritope may continue to
experience significant operating losses as it continues its research and
development programs. Agritope's ability to increase revenues and achieve
profitability and positive cash flows from operations will depend in part on
successful completion of the development and commercialization of its
genetically engineered products. Agritope has not at this time achieved
commercialization of any of its products. There can be no assurance that
Agritope's development efforts will result in commercially viable genetically
engineered products, that Agritope's products will obtain required regulatory
clearances or approvals or that any such products will achieve a significant
level of market acceptance. As such, there can be no assurance that Agritope
will ever achieve profitability.

Need for Additional Funds. The Distribution was conditioned upon a
determination by the Epitope Board that funds from the Private Placement to be
completed immediately following the Distribution will be sufficient to finance
the operations of Agritope as a separate business for at least two years.
Subscribers in the Private Placement have agreed to purchase a total of $9.4
million of Agritope Stock and have deposited the purchase price in an escrow
account, pending the closing of the Private Placement. There can be no assurance
that the determination of Agritope's anticipated cash requirements will prove to
be accurate. Historically, the majority of Agritope's financial requirements
have been met by Epitope. Agritope has also received funding from $5.4 million
principal amount of convertible notes, $1.6 million in investments in Vinifera
by minority shareholders, and $1.0 million of funding from strategic partners
and other research grants. Agritope had an accumulated intercompany balance due
to Epitope of approximately $43.5 million as of June 30, 1997, all of which will
be canceled as part of the Distribution. Epitope will not provide any financial
support following the Distribution. The actual future liquidity and capital
requirements of Agritope will depend on numerous factors, including: the costs
and success of development efforts; the costs and timing of establishment of
sales and marketing activities; the success of Agritope in securing additional
strategic partners; the extent to which existing and new products gain market
acceptance; competing technological and market developments; product sales and
royalties; the costs involved in preparing, filing, prosecuting, maintaining,
enforcing and defending patent claims and other intellectual property rights;
and the availability of third party funding for research projects. In any event,
Agritope may seek or be required to raise substantial additional funds through
public or private financings, collaborative relationships or other arrangements.
There can be no assurance that financing will be available on satisfactory
terms, if at all. Any additional equity financing may be dilutive to
shareholders, and debt financing, if available, may involve significant interest
expense and restrictive covenants. In addition, subsequent changes in ownership
due to future equity sales could adversely affect Agritope's ability to utilize
existing net operating losses. See Note 7 to consolidated financial statements.
Collaborative arrangements, if necessary to raise additional funds, may require
that Agritope relinquish its rights to certain of its technologies, products or
marketing territories. The failure of Agritope to raise capital could require it
to scale back, delay or eliminate certain of its programs and could have a
material adverse effect on its business, financial condition and results of
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

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<PAGE>

Dependence on Strategic Partners. Agritope relies on strategic partners
for access to proprietary plant varieties. In addition, Agritope does not have
or plan to have the capability to grow and distribute genetically engineered
products in commercial quantities. Agritope expects some or all of the
development, manufacturing and marketing of certain of its products to be
performed or paid for by other parties, primarily agricultural companies,
through license agreements, joint ventures or other arrangements.
Commercialization of Agritope's products will require the assistance of
Agritope's current strategic partners and may require that Agritope enter
additional strategic partnerships with businesses experienced in the breeding,
developing, producing, marketing and distributing of produce varieties. There
can be no assurance that Agritope will be able to maintain its current strategic
relationships or establish such relationships or that such relationships will be
on terms sufficiently favorable to permit Agritope to operate profitably. Also,
Agritope's commercial success will be dependent in part upon the performance of
its strategic partners. See "Description of Business."

Uncertainties Relating to Patents and Proprietary Information. Agritope
has obtained certain patents, has license rights under other patents, and has
filed a number of patent applications. Agritope anticipates filing patent
applications for protection of future products and technology. There can be no
assurance that patents applied for will be obtained, that existing patents to
which Agritope has rights will not be challenged, or that the issuance of a
patent will give Agritope any material advantage over its competitors in
connection with any of its products. Competitors may be able to produce products
competing with a patented Agritope product without infringing on Agritope's
patent rights. The issuance of a patent to Agritope or to a licensor is not
conclusive as to validity or as to the enforceable scope of claims therein. The
validity and enforceability of a patent can be challenged by litigation after
its issuance and, if the outcome of the litigation is adverse to the owner of
the patent, the owner's rights could be diminished or withdrawn.

The patent laws of other countries may differ from those of the U.S. as
to the patentability of Agritope's products and processes. Moreover, the degree
of protection afforded by foreign patents may be different from that of U.S.
patents.

The technologies used by Agritope may infringe the patents or
proprietary technology of others. The cost of enforcing Agritope's patent rights
in lawsuits that Agritope may bring against infringers or of defending itself
against infringement charges by other patent holders may be high and could
interfere with Agritope's operations.

Trade secrets and confidential know-how are important to Agritope's
scientific and commercial success. Although Agritope seeks to protect its
proprietary information through confidentiality agreements and appropriate
contractual provisions, there can be no assurance that others will not develop
independently the same or similar information or gain access to proprietary
information of Agritope. See "Description of Business--Patents and Proprietary
Information."

Dependence on Key Personnel. Agritope depends to a large extent on the
abilities and continued participation of its principal executive officers and
scientific personnel. The loss of key personnel could have a material adverse
effect on Agritope's business and results of operations. Agritope's key
personnel include, among others, the individuals identified under "Management."
Competition for management and scientific staff in the agricultural
biotechnology field is intense. No assurance can be given that Agritope will be
able to continue to attract and retain personnel with sufficient experience and
expertise to satisfy its needs.

Uncertainty of Product Development. Agritope's genetically engineered
products are at various stages of development. There are difficult scientific
objectives to be achieved in certain product development programs before the
technological or commercial feasibility of the products can be demonstrated.
Even the more advanced programs could encounter technological problems that may
significantly delay or prevent product development or product introduction. See
"Description of Business." There can be no assurance that any of Agritope's
products under development, if and when fully developed and tested, will perform
in accordance with Agritope's expectations, that necessary regulatory approvals
will be obtained in a timely manner, if at all, or that these products can be
successfully and profitably produced, distributed and sold.

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<PAGE>

Technological Change and Competition. A number of companies are engaged
in research related to plant biotechnology, including companies that rely on the
use of recombinant DNA as a principal scientific strategy and companies that
rely on other technologies. Technological advances by others could render
Agritope's technologies less competitive or obsolete. Agritope believes that,
despite barriers to new competitors such as patent positions and substantial
research and development lead time, competition will intensify, particularly
from agricultural biotechnology firms and major agrichemical, seed and food
companies with biotechnology laboratories. Competition in the fresh produce
market is intense and is expected to increase as additional companies introduce
products with longer shelf life and improved quality. Many of Agritope's
competitors have substantially greater financial, technical and marketing
resources than Agritope. There can be no assurance that such competition will
not have an adverse effect on Agritope's business and results of operations. See
"Description of Business--Competition."

Need for Public Acceptance of Genetically Engineered Products. The
commercial success of Agritope's genetically engineered products will depend in
part on public acceptance of the cultivation and consumption of genetically
engineered plants and plant products. Public attitudes may be influenced by
claims that genetically engineered plant products are unsafe for consumption or
pose a danger to the environment. There can be no assurance that Agritope's
genetically engineered products will gain public acceptance.

Product Liability and Recall Risk. Agritope could be subject to claims
for personal injury or other damages resulting from its products or services or
product recalls. Agritope carries liability insurance against the negligent acts
of certain of its employees and a general liability insurance policy that
includes coverage for product liability, but not for product recall. In
addition, Agritope may require increased product liability coverage as its
products are commercially developed. Such insurance is expensive and in the
future may not be available on acceptable terms, if at all. Also, no assurance
can be given that any product liability claim or product recall will not have a
material adverse effect on Agritope's business and results of operations.

Government Regulation. Many of Agritope's products and activities are
subject to regulation by various local, state, and federal regulatory
authorities in the U.S. and by governmental authorities in foreign countries
where its products may be marketed. Agritope is devoting substantial effort to
the development of genetically engineered plants, using recombinant DNA methods.
Many of Agritope's proposed agricultural products are subject to regulation by
both the U.S. Department of Agriculture ("USDA") and the Food and Drug
Administration ("FDA") and may be subject to regulation by the Environmental
Protection Agency ("EPA") and other federal, state, local and foreign
authorities. The extent of regulation depends on the intended uses of the
products, how they are derived, and how applicable statutes and regulations are
interpreted to apply to new genetic technologies and products thereof. The
regulatory approaches of the USDA, FDA, EPA and other agencies are still
evolving with respect to products of modern biotechnology, such as those derived
from the use of recombinant DNA methods. No assurance can be given that any
regulatory approvals, exemptions, permits or other clearances, if required, can
be obtained in a timely manner, if at all, either for research or commercial
activities. See "Description of Business--Government Regulation."

No Assurance as to Market Performance of Agritope Stock. There can be
no assurance that the combined market values of the Epitope Stock and the
Agritope Stock held by a shareholder after the Distribution will equal or exceed
the market value of the Epitope Stock held by the shareholder prior to the
Distribution Date. The market prices for securities of agricultural
biotechnology companies historically have been volatile. Many factors such as
announcements of technological innovations or new commercial products by
Agritope or its competitors, governmental regulation, patent or proprietary
rights developments, industry alliances, public concern as to the safety or
other implications of products, and market conditions in general may have a
significant impact on the market price of Agritope Stock. In addition, the stock
market has experienced extreme price and volume fluctuations which have affected
the market price of many technology companies in particular and which have at
times been unrelated to the operating performance of the specific companies
whose stock is traded. Broad market fluctuations and general economic conditions
may adversely affect the market price of Agritope Stock. Prior to the
Distribution, there has been no public market for Agritope Stock. There can be
no assurance that an active trading market will develop upon completion of the
Distribution or, if it does develop, that the market will be sustained.

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<PAGE>

Agritope has applied to include Agritope Stock for quotation on The
Nasdaq SmallCap Market. Assuming that Agritope's application is accepted, in
order to maintain such listing, Agritope will be required to comply with certain
Nasdaq SmallCap Market listing maintenance standards including minimum tangible
asset value amounts, public float requirements and minimum stock price amounts.
There can be no assurance that Agritope will be able to comply with the listing
maintenance standards of The Nasdaq SmallCap Market as in effect from time to
time.

Possibility of Substantial Sales of Agritope Stock. Any sales of
substantial amounts of Agritope Stock in the public market, or the perception
that such sales might occur, whether as a result of the Distribution or
otherwise, could materially adversely affect the market price of Agritope Stock.
See "The Distribution--Trading of Agritope Stock" and "Shares Eligible for
Future Sale."

Agreements with Epitope; Lack of Arm's-length Negotiations. In
contemplation of the Distribution, Agritope will enter into a number of
agreements with Epitope, including a Separation Agreement, an Employee Benefits
Agreement, and a Transition Services Agreement, for the purpose of defining its
ongoing relationship with Epitope. Although these agreements were not the result
of arm's-length negotiations between independent parties, Agritope believes such
agreements contain terms comparable to those that would have resulted from
negotiations between unaffiliated parties. There can be no assurance, however,
that the terms of the agreements are in fact comparable to those that would have
been negotiated on an arm's-length basis. See "Relationship Between Agritope and
Epitope After the Distribution."

Anti-takeover Considerations. Agritope's Articles and Bylaws may have
the effect of making an acquisition of control of Agritope in a transaction not
approved by the Agritope Board more difficult. For example, the Articles and
Bylaws provide for a classified board, prohibit the removal of directors except
for "cause," limit the ability of the shareholders and directors to change the
size of the board, and require advance notice before shareholders are permitted
to nominate directors or submit other proposals at shareholder meetings. The
Agritope Board has also adopted the Rights Agreement. In addition, the Agritope
Board has the authority to issue up to 10 million shares of Agritope Preferred
and to fix the rights, preferences, privileges and restrictions of those shares,
and to issue up to a total of 40 million shares of Agritope Common, all without
any vote or action by Agritope's shareholders, except as may be required by law
or any stock exchange or automated securities interdealer quotation system on
which Agritope Stock may be listed or quoted. Agritope is also subject to Oregon
statutory provisions governing business combinations with persons deemed to be
"interested shareholders" or who acquire more than certain specified percentages
of outstanding Agritope Stock. See "Description of Agritope Capital Stock."
Finally, awards made under the 1997 Stock Award Plan will vest in full
immediately in the event of a change in control of Agritope or similar event.
See "1997 Stock Award Plan." The potential issuance of additional shares of
Agritope capital stock and other considerations referenced above may have the
effect of delaying or preventing a change in control of Agritope, may discourage
offers for Agritope Stock, and may adversely affect the market price of, and the
voting and other rights of the holders of, Agritope Stock.

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<PAGE>

INTRODUCTION

On --------------------, 1997, the Epitope Board authorized management
to proceed with the distribution to Epitope shareholders of all the Agritope
Stock held by Epitope. The Distribution will be made to holders of record of
Epitope Stock at the close of business on the Record Date, in the ratio of one
share of Agritope Stock for every ------ shares of Epitope Stock held.
Shareholders will receive cash in lieu of any fractional shares. Epitope
shareholders participating in the Distribution will not be required to surrender
or exchange shares or pay any consideration for the Agritope Stock. After the
Distribution, Agritope will cease to be a subsidiary of Epitope and will operate
as an independent public company. The Distribution Date is expected to be on or
about --------------, 1997.

Agritope will sell at least 1,343,000 shares of Agritope Stock in the
Private Placement for an aggregate price of at least $9.4 million immediately
following the Distribution. The Distribution was contingent upon, among other
things, Agritope receiving binding commitments for such financing. The Epitope
Board believes that this funding is sufficient to support the operations of
Agritope as a separate business for a period of not less than two years,
although no assurance to that effect can be given. Agritope could not operate as
an independent company without such financing. See "Risk Factors--Need for
Additional Financing."

After giving effect to the Private Placement, the shares of Agritope
Stock distributed to Epitope shareholders in the Distribution will represent
approximately -- percent of all Agritope Stock outstanding immediately following
the Distribution.

Agritope will operate separately from Epitope but has entered into
various agreements with Epitope, including a Separation Agreement, an Employee
Benefits Agreement, a Tax Allocation Agreement, and a Transition Services
Agreement, to facilitate Agritope's transition to independent operation. In
connection with the Transition Services Agreement, Epitope has agreed to provide
office and laboratory facilities and accounting and human resources services to
Agritope for a 3-to-6 month period following the Distribution.

Epitope's and Agritope's executive offices are at 8505 S.W. Creekside
Place, Beaverton, Oregon 97008, telephone (503) 641-6115. Epitope shareholders
with questions about the Distribution should contact Mary W. Hagen, Investor
Relations Department, at the address or telephone number above. After the
Distribution Date, Agritope shareholders with questions about Agritope or
Agritope Stock should contact Agritope's corporate secretary at Agritope's
executive offices.

THE DISTRIBUTION

REASONS FOR THE DISTRIBUTION

In July 1997, the Epitope Board approved a management proposal to spin
off Agritope, subject to obtaining financing for Agritope and satisfaction of
certain other considerations. The proposal resulted from the Epitope Board's
1996 decision to make changes in corporate structure to enable investors and
management to focus separately on the agricultural and medical products business
units of Epitope.

In November 1996, the Epitope Board proposed creating two separate
classes of Epitope common stock, one to reflect the business and operations of
Epitope and the other to reflect the business and operations of Agritope (the
"Targeted Stock Proposal"). In addition, in December 1996, Epitope acquired
Andrew and Williamson Sales, Co. ("A&W"), a producer and distributor of fruits
and vegetables, as a direct wholly owned subsidiary of Epitope. In May 1997,
prior to a shareholder vote on the Targeted Stock Proposal, the Epitope Board
rescinded its acquisition of A&W and withdrew the Targeted Stock Proposal in
light of events surrounding a Hepatitis A outbreak allegedly associated with
strawberries shipped by A&W prior to its acquisition by Epitope. The potential
liabilities arising out of the outbreak convinced the Epitope Board that a
targeted stock structure presented too great a risk that liabilities of one
business unit could affect the other. In addition, the rescission and events
related to the

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<PAGE>

Hepatitis A outbreak increased pressure on Epitope's available capital and
decreased the funds available for Agritope's operations. The Epitope Board also
believed that in light of uncertainties surrounding the outbreak and subsequent
rescission of the purchase of A&W, raising the funds necessary to fund the
operations of both Epitope and Agritope on terms acceptable to Epitope was
unlikely. The Epitope Board ultimately concluded that, in light of the different
risks, operating environments, stages of development and respective financing
requirements of the medical products and agricultural biotechnology businesses
and the current need to raise substantial capital for Agritope, a complete
separation of the two businesses was in the best interests of Epitope and its
shareholders.

The primary purpose of the Distribution is to allow Agritope to raise
immediately needed working capital through the sale of its own equity
securities. See "Private Placement." Agritope's history of operating losses is
expected to continue, giving rise to a need for additional capital that cannot
be satisfied in Epitope's current corporate structure. The Private Placement can
only be accomplished if Agritope becomes an independent public company. The
Epitope Board considered certain disadvantages of a spin-off as compared to a
targeted stock structure such as a loss of efficiencies gained by sharing a
common administrative framework and management team and a loss of synergies in
the two companies' research and development programs but determined that such
disadvantages were outweighed by the risks that the liability of one business
would affect the value of the other.

The Distribution will separate the businesses of Epitope and Agritope,
each having its own distinct operating, financial, and investment
characteristics, so that each company can adopt strategies and pursue objectives
more appropriate to its specific business than is possible with Agritope
operating as a wholly owned subsidiary of Epitope. The Epitope Board believes
that the Distribution will better enable management of each company to
concentrate attention and financial resources on research and development and
management of growth in each of its respective core businesses, without regard
to the corporate objectives, policies, challenges and investment criteria of the
other. The Distribution is also intended to afford Agritope increased
flexibility to make acquisitions and enter into strategic partnering
transactions, by issuing its own equity securities. Finally, as a separate
company, Agritope will be able to develop incentive-based compensation programs
that are keyed directly to its earnings and performance, enhancing Agritope's
ability to attract, motivate and retain key employees.

The Epitope Board has also been concerned that the investment community
has historically focused principally on the products and business of Epitope and
has not given sufficient recognition to the value of Agritope's business.
Agritope's status as a separate public company after the Distribution will allow
investors to better evaluate the performance and investment characteristics and
the future prospects of its business. There can be no assurance that the
combined market values of Epitope Stock and Agritope Stock held by a shareholder
after the Distribution Date will equal or exceed the market value of the
existing Epitope Stock held by the shareholder prior to the Distribution Date.
See "Risk Factors--No Assurance as to Market Performance of Agritope Stock."

MANNER OF EFFECTING THE DISTRIBUTION

The general terms and conditions relating to the Distribution are set
forth in a Separation Agreement between Agritope and Epitope dated
- --------------, 1997. See "Relationship Between Agritope and Epitope After the
Distribution--Separation Agreement."

Holders of Epitope Stock on the Record Date will not be required to pay
cash or other consideration for the Agritope Stock received in the Distribution
or to surrender or exchange certificates representing shares of Epitope Stock in
order to receive Agritope Stock in the Distribution.

Under the Separation Agreement, on or before the Distribution Date,
Epitope will deliver to the Distribution Agent a certificate or certificates
representing all of the then outstanding shares of Agritope Stock held by
Epitope. Epitope will then instruct the Distribution Agent to distribute to each
holder of record of Epitope Stock on the Record Date a certificate or
certificates representing one share of Agritope Stock for every ------ shares of
Epitope Stock outstanding. Any shares not distributed, on account of the
arrangements made for paying cash

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<PAGE>

in lieu of fractional shares as described below, will be returned to Agritope
for cancellation. A total of approximately ---- shares of Agritope Stock will be
issued in the Distribution.

Certificates representing shares of Agritope Stock will be mailed by
the Distribution Agent commencing on the first day following the Distribution
Date. The distributed shares of Agritope Stock will be fully paid and
nonassessable and will not be entitled to preemptive rights. Initially, the
preferred stock purchase rights associated with each share of Agritope Common
will be represented by the certificate for such share of Agritope Common.
See "Description of Agritope Capital Stock--Shareholder Rights Plan."

TRADING OF AGRITOPE STOCK

After the Distribution, Epitope and Agritope will operate as
independent public companies. Immediately after the Distribution and the
consummation of the Private Placement, Agritope expects to have approximately
- ------ holders of record of Agritope Stock and ------ shares of Agritope Stock
outstanding, based on the number of holders of record of outstanding Epitope
Stock and the distribution ratio and the number of investors and amount of
shares involved in the Private Placement. The actual number of shares of
Agritope Stock to be distributed will be determined as of the Record Date.

Agritope has applied to include Agritope Stock for quotation on The
Nasdaq SmallCap Market under the symbol "AGTO." There can be no assurance,
however, that Agritope will meet the requirements for continued inclusion on The
Nasdaq SmallCap Market, or that an active trading market for shares of Agritope
Stock will develop after the Distribution.

A "when-issued" market in Agritope Stock is expected to develop on or
after the Record Date. Prices at which Agritope Stock may trade prior to the
Distribution on a "when-issued" basis or after the Distribution cannot be
predicted. The prices at which trading in Agritope Stock occurs may be subject
to significant fluctuations, particularly in the period immediately preceding
and immediately after the Distribution and until an orderly trading market
develops, if at all. See "Risk Factors--No Assurance as to Market Performance of
Agritope Stock."

The transfer agent and registrar for the Agritope Stock will be
ChaseMellon Shareholder Services, L.L.C.

Shares of Agritope Stock distributed to Epitope shareholders in the
Distribution will be freely transferable, except for shares received by persons
who may be deemed to be "affiliates" of Agritope under the Securities Act.
Persons who may be deemed to be affiliates of Agritope after the Distribution
generally include individuals or entities that control, are controlled by, or
are under common control with, Agritope, and may include certain officers and
directors of Agritope as well as principal shareholders of Agritope, if any.
Persons who are affiliates of Agritope will be permitted to sell their shares of
Agritope Stock only pursuant to an effective registration statement under the
Securities Act or an exemption from the registration requirements of the
Securities Act, such as the exemption afforded by Rule 144 under the Securities
Act. Agritope believes that persons who may be deemed to be affiliates of
Agritope after the Distribution will initially beneficially own in the aggregate
- ---- percent of the outstanding shares of Agritope Stock.

In general, under Rule 144, any affiliate of Agritope or any person
owning unregistered Agritope Stock (Agritope Stock held by any such affiliate or
person referred to as "Restricted Securities") who has beneficially

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<PAGE>

owned Restricted Securities for at least one year (including the holding period
of any prior owner who is not an affiliate of Agritope) would be entitled to
sell within any three-month period a number of shares that does not exceed the
greater of (i) one percent of the then outstanding shares of Agritope Stock
(approximately ----- shares immediately after the Distribution and Private
Placement), or (ii) the average weekly trading volume of Agritope Stock during
the four calendar weeks preceding the filing of a Form 144 with respect to such
sale. Sales under Rule 144 are also subject to certain manner of sale and notice
requirements and to the availability of current public information about
Agritope.

The shares of Agritope Stock being sold in the Private Placement have
not been registered under the Securities Act. Pursuant to Regulation S of the
Securities Act, shares of Agritope Stock purchased in the Private Placement may
not be sold in the U.S. without registration under the Securities Act until 40
days following the closing of the Private Placement. Sale of a significant
number of shares by these holders could adversely affect the market price of
Agritope Stock. See "Shares Eligible for Future Sale."

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

Epitope has received an opinion from Miller, Nash, Wiener, Hager &
Carlsen LLP ("Miller Nash") that (i) the Distribution will be treated as a
tax-free transaction to Epitope shareholders qualifying under Section 355 of the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) the following
discussion concerning the material tax consequences of the transaction, insofar
as it relates to statements of tax law or conclusions thereunder, is correct and
complete in all material respects. The opinion of Miller Nash received by
Epitope represents only the best judgment of Miller Nash, and is not binding on
the Internal Revenue Service (the "IRS"). There can be no guarantee that the IRS
will agree with the opinion or that upon challenge by the IRS, a court will not
reach a conclusion contrary to the opinion. Epitope has not requested, and does
not anticipate requesting, a ruling from the IRS with respect to the federal
income tax consequences of the Distribution. Under the provisions of a revenue
procedure issued by the IRS in 1996, the IRS has announced that it will not
issue advance private letter rulings for any spin-off transaction if there have
been negotiations related to the sale of stock of the distributed corporation.
Accordingly, due to the Private Placement, the IRS would not issue a ruling with
respect to the Distribution. The IRS's refusal to issue rulings with respect to
certain spin-off transactions does not mean that the Distribution does not
qualify as a tax-free transaction. However, because no ruling will be received,
there can be no assurance that the Distribution will qualify as a tax-free
transaction.

Consequences of Qualification as a Tax-Free Distribution. The discussion set
forth below may not be applicable to certain Epitope shareholders who, among
other limitations, received their shares of Epitope Stock as compensation, who
are not citizens or residents of the U.S. or who are otherwise subject to
special treatment under the Code. Subject to such special circumstances that may
apply to certain Epitope shareholders, in the opinion of Miller Nash, the
Distribution will have the following federal income tax consequences:

(1) An Epitope shareholder will not recognize any income, gain or loss
upon the receipt of Agritope Stock which is received by the shareholder as a
result of the Distribution, although income and gain or loss will be recognized
in connection with any cash received in lieu of fractional shares, as described
below.

(2) An Epitope shareholder's tax basis in the Epitope Stock with
respect to which Agritope Stock is received will be apportioned between the
shareholder's Epitope shares and the shares of Agritope Stock received by the
shareholder (including any fractional shares of Agritope Stock deemed received)
in proportion to the relative aggregate fair market values of Epitope Stock and
Agritope Stock on the Distribution Date.

(3) An Epitope shareholder's holding period for Agritope Stock received
in the Distribution will include the period during which the shareholder held
the Epitope Stock with respect to which the Agritope Stock is distributed,
provided such Epitope shareholder held the Epitope Stock as a capital asset at
the time of the Distribution.

- 17 -

<PAGE>

(4) An Epitope shareholder who receives cash in lieu of a fractional
share of Agritope Stock in the Distribution will be treated as if the fractional
share of Agritope Stock had been received by the shareholder as part of the
Distribution and then sold by the shareholder for cash. Accordingly, the
shareholder will recognize gain or loss equal to the difference between the cash
so received and the amount of tax basis allocable (as described above) to the
fractional share of Agritope Stock. The gain or loss will be capital gain or
loss if the fractional share of Agritope Stock would have been held by the
shareholder as a capital asset.

(5) Agritope will not recognize any income, gain or loss as a result of
the Distribution.

Miller Nash has not expressed any opinion concerning the tax
consequences to Epitope of the Distribution. Depending on the number of shares
of Agritope Stock issued in the Private Placement (see "Private Placement"), the
Distribution might result in recognition of taxable gain by Epitope. Epitope
believes that its tax basis in Agritope is greater than the fair market value of
Agritope. Thus, while the Distribution might be deemed to be a taxable
transaction for Epitope, Epitope believes it is more likely than not that the
Distribution will result in the realization of a loss rather than the
recognition of any taxable gain. Epitope will not be allowed to recognize for
income tax purposes any taxable loss realized as a result of the Distribution.
If any taxable gain is recognized, Epitope believes that it has sufficient net
operating loss carry forwards to offset any such gain for regular tax purposes.
However, if any gain is recognized, Epitope would incur an immaterial amount of
Alternative Minimum Tax.

Current U.S. Treasury regulations require that each Epitope shareholder
who receives shares of Agritope Stock pursuant to the Distribution attach a
statement to the shareholder's federal income tax return for the taxable year in
which the Distribution occurs, providing certain information with respect to the
applicability of Section 355 of the Code to the Distribution. In a Tax
Allocation Agreement between the parties (discussed below), Epitope has
represented that it will provide to each Epitope shareholder of record as of the
Record Date information necessary to comply with this requirement.

Consequences of Failure to Qualify as a Tax-Free Distribution. If the
Distribution ultimately were determined not to qualify as a tax-free transaction
to Epitope shareholders pursuant to Section 355 of the Code, the following
federal income tax consequences would result:

(1) Each Epitope shareholder would be considered to have received a
distribution in an amount equal to the fair market value, when distributed, of
the shares of Agritope Stock received by the shareholder plus the amount of any
cash received in lieu of fractional shares of Agritope Stock. Such a
distribution would be taxed as a dividend to the shareholder to the extent of
the shareholder's share of (i) Epitope's current earnings and profits for
federal income tax purposes for the fiscal year ending September 30, 1998 (which
current earnings and profits, if any, will be increased by any gain recognized
by Epitope as a result of the Distribution (which would equal the excess, if
any, of the fair market value of Agritope over Epitope's tax basis in Agritope))
or (ii) Epitope's accumulated earnings and profits through September 30, 1998
(including any gain recognized as a result of the Distribution). To the extent
that the aggregate fair market value of the shares of Agritope Stock distributed
exceeds Epitope's earnings and profits, the excess would be treated first as a
non-taxable reduction in the tax basis of a shareholder's Epitope Stock to the
extent of the tax basis, and thereafter as short-term or long-term capital gain,
provided the Epitope Stock is held by the shareholder as a capital asset. Under
Epitope's best current estimates, Epitope will not have sufficient earnings and
profits by September 30, 1998, to treat any part of the Distribution as a
dividend. This estimate is, however, subject to change as current assumptions
may change and future events could materially impact Epitope's earnings and
profits.

(2) An Epitope shareholder's tax basis in the shares of Agritope Stock
received in the Distribution would equal the fair market value of the Agritope
Stock on the Distribution Date, and the shareholder's holding period for the
shares of Agritope Stock would begin the day after that date. An Epitope
shareholder's tax basis in the Epitope Stock would not be affected by the
Distribution, unless, as described above, the amount of the Distribution
exceeded the current and accumulated earnings and profits of Epitope
attributable to the shareholder and was treated as a

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<PAGE>

non-taxable reduction in tax basis. Upon a subsequent sale of the shares of
Agritope Stock, a shareholder would recognize gain or loss measured by the
difference between the amount realized on the sale and the shareholder's tax
basis in the shares of Agritope Stock sold.

(3) In general, any amount received by a corporate shareholder that is
taxable as a dividend would be eligible for a 70 percent dividends-received
deduction. However, the 70 percent dividends-received deduction would not be
available with respect to stock unless, among other requirements, certain
holding period requirements were satisfied. In this regard, under Section 246(c)
of the Code, the length of time that a taxpayer is deemed to have held stock is
reduced for periods during which the taxpayer's risk of loss with respect to
such stock is diminished by reason of the existence of certain options to sell,
contracts to sell or other similar arrangements.

In addition, under Section 1059 of the Code, a corporate shareholder
whose holding period, as determined using rules similar to those contained in
Section 246(c) of the Code, is two years or less (as of the Distribution
announcement date) would be required to reduce the tax basis of such Epitope
Stock (but not below zero) by that portion of any "extraordinary dividend," as
defined in the Code, that is not taxed because of the dividends-received
deduction. If the portion exceeded the corporate shareholder's tax basis for its
Epitope Stock, any such excess would be treated as gain on the subsequent sale
or disposition of the stock for the taxable year in which the extraordinary
dividend is received.

The summary of federal income tax consequences set forth above is for
general information only and may not be applicable to shareholders who received
their shares of Epitope Stock through the exercise of an option or otherwise as
compensation, who are not citizens or residents of the U.S. or who are otherwise
subject to special treatment under the Code. All shareholders should consult
their own tax advisors as to the particular tax consequences of the Distribution
to them, including the applicability and effect of state, local and foreign tax
laws.

PRIVATE PLACEMENT

Immediately following the Distribution, Agritope will sell at least
1,343,000 shares of Agritope Stock at a price of $7 per share, for an aggregate
price of at least $9.4 million in the Private Placement. Subscribers in the
Private Placement have entered stock purchase agreements and have deposited the
purchase price of the shares in an escrow account, pending completion of the
Distribution and closing of the Private Placement. Immediately following the
Distribution, the funds held in escrow will be released to Agritope and shares
of Agritope Stock will be issued to investors in the Private Placement. Shares
sold in the Private Placement will not be registered under the Securities Act in
reliance upon the exemption from registration provided by Regulation S.
Subscribers in the Private Placement will own at least 27 percent of the
Agritope Stock outstanding following the Distribution and the Private Placement.

The Distribution was contingent upon, among other things, Agritope
receiving binding commitments for such financing. The Epitope Board believes
that this funding is sufficient to support the operations of Agritope as a
separate business for a period of not less than two years. There can be no
assurance that the determination of Agritope's anticipated cash requirements
will prove to be accurate. See "Risk Factors--Need for Additional Funds."

RELATIONSHIP BETWEEN AGRITOPE AND EPITOPE AFTER THE DISTRIBUTION

For purposes of setting forth the conditions to and procedures for the
Distribution, governing the ongoing relationship between Epitope and Agritope
after the Distribution and providing for a more orderly transition of Agritope
to operation as an independent public company, Epitope and Agritope have entered
into or will enter into various agreements. The agreements summarized in this
section are included as exhibits to the Registration Statement of which this
Information Statement/Prospectus forms a part. The following summary is
qualified in its entirety by reference to the agreements as filed.

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<PAGE>

Management believes that the administrative costs for Agritope as a
stand-alone company will not be materially different from the administrative
incurred and the shared services costs allocated in the historical financial
statements. Additionally, the amounts to be charged to Agritope under the
Transition Services Agreement described below are not expected to differ
materially from what Agritope would incur on a stand-alone basis.

SEPARATION AGREEMENT

Epitope and Agritope have entered into a Separation Agreement, which
provides for, among other things, certain pre-Distribution actions of the
parties, the manner of effecting the Distribution, indemnification rights and
procedures, insurance matters, access to books and records, and confidentiality.
The Separation Agreement also provides for the cancellation of approximately
$43.5 million of Agritope's intercompany balances due to Epitope, which has been
treated as a capital contribution in the consolidated financial statements
included herein. Because Epitope and Agritope have separately conducted their
respective businesses, the Separation Agreement does not otherwise contemplate
either entity transferring any significant assets or property to the other.

The Separation Agreement sets forth all of the material conditions
precedent to the Distribution, which are: (i) receipt by Agritope of binding
commitments for financing in an amount the Epitope Board deems sufficient to
support Agritope's operation as an independent public company for a period of
not less than two years; (ii) receipt by Epitope of an opinion of its tax
advisors as to certain tax considerations in connection with the Distribution;
(iii) receipt of all material approvals and consents necessary to consummate the
Distribution and absence of any pending or threatened action with respect to the
Distribution; (iv) effectiveness of the Registration Statement; and (v)
occurrence of no other event or development that, in the judgment of the Epitope
Board, would have a material adverse effect on Epitope or its shareholders. The
Distribution is subject to satisfaction or waiver of each of these material
conditions and certain other conditions set forth in the Separation Agreement.
The Separation Agreement may be terminated, and the Distribution abandoned, at
any time prior to the Distribution Date by, and in the sole discretion of, the
Epitope Board.

In addition, the Separation Agreement provides for the allocation of
benefits under existing insurance policies between Epitope and Agritope, grants
each of Epitope and Agritope access to certain records and information in the
possession of the other, imposes certain confidentiality obligations on each,
and provides that, except as otherwise set forth therein or in any related
agreement, Epitope and Agritope will each pay its own costs and expenses in
connection with the Distribution.

Pursuant to the Separation Agreement, Agritope has adopted Articles
increasing its authorized capital stock to 40 million shares of Agritope Common
and 10 million shares of Agritope Preferred, and taken other corporate actions
in anticipation of its transition to an independent public company.

Each of the parties has agreed to indemnify the other against claims
relating to or arising out of their respective businesses prior to the
Distribution and arising out of the Distribution.

EMPLOYEE BENEFITS AGREEMENT

It is anticipated that each person who is an Epitope employee or an
Agritope employee immediately prior to the Distribution Date will continue to be
such immediately after the Distribution Date. To address certain employee and
employee benefits matters in connection with the Distribution, Epitope and
Agritope have entered into an Employee Benefits Agreement. Pursuant to the
Employee Benefits Agreement, Agritope will retain or assume, as the case may be,
sole responsibility as employer for all employees of Agritope as of the
Distribution Date, and will cause any Agritope employee who is then a party to
any employment-related agreement with Epitope to terminate such agreement
effective as of the Distribution Date, except as described below.

Epitope currently provides benefits to its employees and employees of
Agritope under the Epitope, Inc. 401-K Profit Sharing Plan (the "Epitope 401(k)
Plan"), the Incentive Stock Option Plan (the "Incentive Plan"), the

- 20 -
<PAGE>

1991 Stock Award Plan (the "1991 Epitope Award Plan"), and the 1993 Employee
Stock Purchase Plan (the "Purchase Plan"). Pursuant to the Employee Benefits
Agreement, Agritope has agreed to amend the Agritope, Inc. 1992 Stock Award Plan
(the "1992 Agritope Award Plan") or options outstanding thereunder and adopt
other benefit plans to replace the employee benefits provided by Epitope.
Agritope employees will be eligible for the new Agritope plans following the
Distribution. To facilitate the transition, Epitope and Agritope have agreed to
adjust each existing Epitope employee benefit or award in the following manner:

401(k) Plan. The Employee Benefits Agreement provides that Agritope
will establish and administer a new plan named the Agritope 401(k)
Retirement Plan and Trust (the "Agritope 401(k) Plan"), under which
benefits will be provided to all Agritope employees including those who
were eligible for the Epitope 401(k) Plan immediately prior to the
Distribution Date. All Agritope employees who wish to participate in
the Agritope 401(k) Plan will be required to enroll in the Agritope
401(k) Plan in accordance with its terms. As soon as practicable after
the Distribution Date, the Employee Benefits Agreement requires Epitope
to cause the trustees of the Epitope 401(k) Plan to transfer to the
trustee of the Agritope 401(k) Plan the amounts in cash, securities,
other property, plan loans, or a combination thereof acceptable to the
trustee of the Agritope 401(k) Plan representing the account balances
of all Agritope employees, former employees or their beneficiaries.

Existing Epitope Options. Pursuant to the Employee Benefits Agreement,
Epitope and Agritope have agreed that each unexercised option to
purchase Epitope Stock outstanding as of the Distribution Date
("Existing Epitope Options") will be adjusted as follows as of the
Distribution Date.

The exercise price of Existing Epitope Options will be adjusted to
reflect the relative value of Epitope Stock and Agritope Stock. The
exercise price will be determined according to a formula provided in
the Employee Benefits Agreement that subtracts the value of Agritope
Stock from the exercise price. The value of Agritope Stock will be
based on the average of the reported closing prices of Agritope Stock
on The Nasdaq SmallCap Market during the five consecutive trading days
beginning on the Distribution Date. Epitope and Agritope believe that
the exercise price adjustments to Existing Epitope Options should not
result in the recognition of taxable income by Epitope or Agritope or
their respective optionees. However, there can be no assurance that
such recognition will not occur. Each holder of an outstanding Existing
Epitope Option is urged to consult with his or her own tax advisor.

Also, for purposes of determining the period that vested Existing
Epitope Options remain exercisable, employment by Agritope shall be
deemed employment by Epitope. Employment by Agritope or any of its
majority owned subsidiaries after the Distribution, will not be deemed
employment by Epitope for vesting and all other purposes relating to
Existing Epitope Options.

Certain Existing Epitope Options are currently intended to qualify as
"incentive stock options" ("ISOs") under the Code. However, continued
ISO status requires that the optionee be employed by the grantor (or a
parent or subsidiary of the grantor) and that the option generally be
exercised within three months after an optionee's termination. Because
the Distribution will terminate the affiliation between Epitope and
Agritope, employees of Agritope holding Existing Epitope Options will
lose any claim to ISO status for such options three months after the
Distribution Date. Such options will thereafter be treated as
nonqualified options.

Agritope has adopted the Agritope, Inc. 1997 Stock Award Plan (the
"Agritope 1997 Award Plan") pursuant to which future awards will be
made to Agritope employees as of and following the Distribution. See
"1997 Stock Award Plan."

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<PAGE>

Agritope Options Held by Epitope Employees. Agritope has granted
options to certain employees of Epitope and Agritope under the Agritope
1992 Agritope Award Plan. The options are denominated in shares of
Agritope Stock, but require conversion of any Agritope Stock purchased
upon exercise into Epitope Stock so long as Agritope is a wholly owned
subsidiary of Epitope. Agritope will amend the 1992 Agritope Award Plan
or options outstanding thereunder prior to the Distribution to provide
that outstanding options be treated as options to purchase Epitope
Stock, and that such options be subject to substantially the
restrictions and adjustments provided above for Existing Epitope
Options. No further options will be granted under the plan.

Purchase Plan. The Purchase Plan enables participating Epitope
employees to purchase, on the last day of each Offering Period (as
defined in the Purchase Plan), Epitope Stock at the lesser of (i) 85
percent of the fair market value of Epitope Stock on the last trading
day prior to the related Offering Date (as defined in the Purchase
Plan) or (ii) 100 percent of the fair market value of Epitope Stock on
the last day of such Purchase Period or on any earlier date of purchase
provided for in the Purchase Plan. The purchase price is collected by
means of payroll deductions. An employee whose employment is terminated
for any reason other than retirement, disability, or death may, at his
or her election, (i) be refunded the full amount withheld to date, plus
interest at the rate of 6 percent per year, or (ii) receive the whole
number of shares that could be purchased at the purchase price with
that amount together with a cash refund of any balance.

Pursuant to the Employee Benefits Agreement, the Purchase Plan will
continue in full force and effect in accordance with its terms. The
Employee Benefits Agreement provides that participants under the
Purchase Plan will be eligible to participate in the Distribution and
receive shares of Agritope Stock only to the extent that, by operation
of the Purchase Plan or otherwise, they are shareholders of record on
the Record Date; provided, however, that participants who are entitled
to receive shares of Epitope Stock under the Purchase Plan as of the
Record Date but who have not yet been mechanically recorded as
shareholders of record as of the Record Date will be treated as
shareholders of record for purposes of the Distribution. The Employee
Benefits Agreement also provides for certain adjustments to the Maximum
Purchase Price (as defined in the Purchase Plan) during the Purchase
Period in which the Distribution occurs in order to reflect the effect
of the Distribution. Agritope has established an Employee Stock
Purchase Plan for Agritope employees. See "1997 Employee Stock Purchase
Plan."

The Employee Benefits Agreement also provides for the continuation of
medical, dental and other welfare plans by Epitope and Agritope for the benefit
of their respective employees following the Distribution, and for the allocation
of liability for, and indemnity obligations related to, any employment-related
claims brought against Epitope or Agritope, or both companies jointly.

TAX ALLOCATION AGREEMENT

Epitope and Agritope have entered into a Tax Allocation Agreement
providing for their respective obligations concerning various tax liabilities
and related matters. The Tax Allocation Agreement provides that Epitope will
pay, and will indemnify Agritope with respect to, all federal, state, local and
foreign income, franchise and similar taxes relating to Epitope for all taxable
periods. Epitope has also generally agreed to pay all other taxes (other than
those which are imposed solely on Agritope) that are payable in connection with
the Distribution and transactions related to the Distribution, the liability for
which arises on or before the Distribution Date. The Tax Allocation Agreement
provides that Agritope will pay, and will indemnify Epitope with respect to, all
federal, state, local and foreign income, franchise and similar taxes relating
to Agritope for all taxable periods. Further, the Separation Agreement provides
for cooperation with respect to certain tax matters, including the preparation
of income tax returns, the exchange of information, the handling of tax
controversies, and the retention of records which may affect the income tax
liability of either party.

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<PAGE>

TRANSITION SERVICES AGREEMENT

Epitope and Agritope have entered into a Transition Services Agreement
pursuant to which Epitope has agreed to provide office and laboratory facilities
and accounting and human resources services to Agritope for a 3-to-6 month
period following the Distribution.

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<PAGE>

SELECTED FINANCIAL DATA
(In thousands, except per share data)

The following table sets forth selected historical consolidated income
and balance sheet data of Agritope and its subsidiaries. The balance sheet data
at September 30, 1996 and 1995 and the operating results data for the years
ended September 30, 1996, 1995, and 1994 have been derived from audited
consolidated financial statements and notes thereto included in this Information
Statement/Prospectus. Balance sheet data at June 30, 1997 and operating results
data for the nine months ended June 30, 1997 and 1996 have been derived from
unaudited interim condensed consolidated financial statements and notes thereto
included in this Information Statement/Prospectus and, in the opinion of
management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the financial position and
results of operations for the interim periods. Results for the nine months ended
June 30, 1997, may not be indicative of full-year results. The balance sheet
data at September 30, 1994, 1993 and 1992 and operating results data for the
years ended September 30, 1993 and 1992 are derived from unaudited consolidated
financial statements and notes thereto not included in this Information
Statement/Prospectus and, in the opinion of management, include all adjustments
necessary for fair presentation. This information should be read in conjunction
with the consolidated financial statements and notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30 YEAR ENDED SEPTEMBER 30
1997 1996 1996 1995(1) 1994(1) 1993 1992
(UNAUDITED)
CONSOLIDATED OPERATING RESULTS
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues.......................................... $ 668 $ 514 $ 585 $ 2,110 $ 2,213 $ 524 $ 58
Operating costs and expenses...................... 4,063 2,055 2,821 9,920 11,703 7,331 2,790
Other income (expense), net ...................... (3,060)(2) (192) (265) (235) (314) (151) (21)
Net loss.......................................... (6,455) (1,733) (2,501) (8,045) (9,804) (6,958) (2,753)
Pro forma net loss per share (3).................. (3.22) (.86) (1.25) (4.02) (4.90) (3.48) (1.38)
Pro forma shares used in per
share calculations (3).......................... 2,000 2,000 2,000 2,000 2,000 2,000 2,000
</TABLE>

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET DATA JUNE 30, 1997 SEPTEMBER 30
AS ADJUSTED(4) ACTUAL 1996 1995 1994 1993 1992
(UNAUDITED)

<S> <C> <C> <C> <C> <C> <C> <C>
Working capital (deficiency)................. $ 10,565 $1,815 $(3,163) $ 846 $ 418 $ 0 $ 4,113
Total assets................................. 15,880 7,130 5,670 4,067 4,081 2,091 5,922
Long-term debt............................... 16 16 - 22 38 57 -
Convertible notes, due 1997.................. - - 3,620 3,620 4,070 4,630 5,495
Accumulated deficit.......................... (38,933) (38,933) (32,478) (29,976) (21,931) (12,127) (5,169)
Shareholder's equity (deficit) .............. 13,865 5,115 1,008 75 (482) (2,983) 227
</TABLE>

(3) Net income (loss) per share is presented on a pro forma basis assuming
that the Distribution of Agritope Stock pursuant to the Agritope
spin-off had occurred on October 1, 1991.

(4) The capitalization of Agritope as adjusted reflects the effects of the
Private Placement of approximately 1,343,000 shares of Agritope stock
for aggregate proceeds of $9.4 million, less issuance costs of
$650,000.

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<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of operations and financial condition should be read in
conjunction with the consolidated financial statements and notes thereto
included elsewhere in this Information Statement/Prospectus. Special Note:
Certain statements set forth below constitute "forward-looking statements." See
"Note Regarding Forward-Looking Statements."

OVERVIEW

Agritope, Inc. (the "Company" or "Agritope"), consists of two units:
Agritope Research and Development and Vinifera, Inc. ("Vinifera"). Agritope
Research and Development uses biotechnology in the development of new fruit and
vegetable plant varieties for sale to the fresh produce industry. To date,
Agritope has not completed commercialization of its technology. A portion of the
research and development efforts conducted by Agritope has been performed under
various research grants and contracts. Vinifera is engaged in the grapevine
propagation and distribution business.

The results of operations for the year ended September 30, 1994 and the
first three quarters of 1995 include the activity of Vinifera, then a wholly
owned subsidiary of Agritope. Vinifera was sold in the third quarter of 1995,
and a majority interest was reacquired in the fourth quarter of 1996 after the
purchaser failed to make certain required payments. No gain was recognized upon
the sale of Vinifera in 1995. The 1996 purchase price of $916,000 was allocated
to tangible net assets. As a result of subsequent equity sales to private
investors, Agritope now holds a 61 percent equity interest in Vinifera.
Vinifera's operations are included in results of operations for the fourth
quarter of 1996, and for all of 1997. During 1994 and 1995, Vinifera was in the
development stage and generated minimal product sales. Vinifera commenced
commercial stage operations in 1996.

Agritope's results of operations for 1994 and the first three quarters
of 1995 also include the activity of Agrimax Floral Products, Inc. ("Agrimax"),
then a wholly owned subsidiary, which was engaged in the fresh flower packaging
and distribution business. Agrimax's business was discontinued in 1995. In 1995,
a portion of the operating assets of Agrimax were contributed to UAF Limited
Partnership ("UAF"), an unrelated company, in exchange for a minority equity
interest in UAF. A loss of $500,000 was recognized in 1995 on the discontinuance
of operations at Agrimax and the transaction with UAF. In 1996, the remainder of
the operating assets of Agrimax were contributed to Petals USA, Inc. ("Petals"),
an unrelated company, in exchange for a minority equity interest in Petals. No
gain or loss was recognized on the transaction with Petals and the investment in
Petals was recorded at the net book value of the contributed assets. There are
no operations of Agrimax included in 1996 or 1997 operating results.

In July 1997, Epitope's board of directors approved a management
proposal to spin off Agritope, subject to obtaining financing for Agritope and
the satisfaction of certain other conditions.

The accompanying consolidated financial statements have been prepared
to reflect the operating results and financial condition of Agritope and its
subsidiaries. The operating statements include the cost of certain corporate
overhead services which are provided on a centralized basis for the benefit of
the medical products business conducted by Epitope and the agricultural
biotechnology business conducted by Agritope and its subsidiaries ("Shared
Services"). Such expenses have historically been allocated using activity
indicators which, in the opinion of management, represent a reasonable measure
of the respective business' utilization of or benefit from such Shared Services.

The accompanying consolidated financial statements do not include the
operations of Andrew and Williamson Sales, Co. ("A&W"). A&W, a producer and
distributor of fruits and vegetables, was acquired by, and became a direct
wholly owned subsidiary of, Epitope in December 1996. Agritope and A&W thereby
became sister companies, each a wholly owned subsidiary of Epitope. Agritope had
no relationship with A&W other than as a

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<PAGE>

sister corporation. Epitope rescinded the acquisition of A&W in May 1997. The
effects of Epitope's ownership of A&W are reflected solely in Epitope's
financial statements and have no impact on Agritope's financial statements.

RESULTS OF OPERATIONS

Nine months ended June 30, 1997 and 1996

Revenues. Total revenues increased by $154,000 or 30 percent in the nine months
ended June 30, 1997, as compared to the nine months ended June 30, 1996. In
1997, Vinifera accounted for product sales of $566,000. Such sales are highly
seasonal and generally occur in the spring and summer planting seasons. Vinifera
commenced commercial stage operations in 1996 and continued its marketing
efforts and expansion of its customer base during 1997. Vinifera was re-acquired
by Agritope in August 1996 and therefore its results are not included in the
comparable period of 1996. As of June 30, 1997, Vinifera had firm orders
totaling $820,000 for delivery in the fourth quarter of 1997.

Grant and contract revenues decreased by $413,000 or 80 percent in the
nine months ended June 30, 1997, as compared to the nine months ended June 30,
1996. Grant and contract revenues in 1996 included $408,000 received from three
strategic partners for research projects. These research projects are directed
at developing superior new plants through genetic engineering. Revenue from such
projects can vary significantly from quarter to quarter and from year to year as
new projects are started while other projects may be extended, completed, or
terminated. In addition, not all research projects conducted by Agritope receive
grant or contract funding. As of June 30, 1997, Agritope was in the final stages
of concluding work under a $99,000 research grant and had just commenced work
under another research grant expected to total $55,000 over six months. In
October 1997, the Company was awarded a three-year grant totaling $1.0 million
from the U.S. Department of Commerce.

Gross margin. Gross margin on product sales was 3 percent of sales for the first
nine months of 1997. There were no comparable product sales for the prior year
period. Gross margin in 1997 was adversely affected by production start-up costs
incurred during the expansion of production capacity at Vinifera.

Research and development expenses. Research and development expenses increased
by $260,000 or 26 percent in the nine months ended June 30, 1997, as compared to
the nine months ended June 30, 1996. The higher research and development costs
in 1997 reflect increased efforts to develop and propagate crops containing
Agritope's patented ethylene control technology as well as research and
development efforts to improve grape plant propagation conducted by Vinifera.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased by $1.2 million or 113 percent in the nine
months ended June 30, 1997, as compared to the nine months ended June 30, 1996.
The increase is primarily attributable to $691,000 of expenses incurred by
Vinifera, which was not part of Agritope in the comparable period of 1996, and
to expenses of $424,000 related to the withdrawn proposal to create two classes
of common stock of Epitope. During 1996, Vinifera expanded greenhouse capacity
and continued to establish marketing and administrative functions at its new
headquarters location in Petaluma, California. Such activities contributed to
relatively high selling, general and administrative expenses in comparison to
product sales levels. These expenses also include allocation of Shared Services
of $953,000 and $778,000 for the 1997 and 1996 nine-month periods, respectively.
Shared Services in 1997 include an allocation to Vinifera, which was not part of
Agritope in the comparable period of 1996. Shared Services costs also increased
in 1997 as a result of added administrative personnel.

Other income (expense), net. Other income (expense), net was affected by two
significant non-recurring charges totaling $3.1 million in the first quarter of
1997. Agritope recorded a non-cash charge to results of operations of $1.9
million, reflecting the permanent impairment in the value of its investment in
affiliated companies (UAF and Petals). Additionally, conversion of $3.4 million
principal amount of Agritope convertible notes into Epitope common stock at a
reduced price resulted in a non-cash charge to results of operations of $1.2
million.

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Interest expense decreased by $167,000 or 87 percent in the nine months
ended June 30, 1997, as compared to the nine months ended June 30, 1996, due to
the conversion of $3.4 million principal amount of Agritope notes into Epitope
common stock in the first quarter of 1997.

Years Ended September 30, 1996, 1995, and 1994

Revenues. Total revenues declined to $585,000 in 1996 from $2.1 million in 1995
and $2.2 million in 1994. Product sales of $2.0 million in 1995 and $2.2 million
in 1994 consisted primarily of sales in Agrimax's unprofitable wholesale fresh
flower packaging and distribution operations, which was discontinued in the
third quarter of 1995.

A grant from the U.S. Department of Agriculture and grants from
strategic partners accounted for the increase in grant and contract revenues to
$585,000 in 1996 from $94,000 in 1995. These research projects were directed at
developing superior new plants through genetic engineering. Revenues from such
projects can vary significantly from year to year as new projects are started
while other projects may be extended, completed, or terminated. In addition, not
all research projects conducted by Agritope receive grant or contract funding.

Research and development expenses. Research and development expenses in 1996,
1995 and 1994 totaled $1.3 million, $2.2 million and $2.4 million, respectively.
The decrease of $866,000 or 39 percent from 1995 to 1996 resulted from the
divestitures of the Agrimax and Vinifera businesses in the third quarter of
1995.

Selling, general and administrative expenses. Selling, general and
administrative expenses in 1996, 1995, and 1994 were $1.5 million, $4.5 million
and $4.8 million, respectively. Costs in 1995 and 1994 included $2.8 million and
$4.1 million, respectively, of costs incurred in Agrimax and Vinifera. Selling,
general and administrative expenses include $1.1 million, $1.9 million and $1.7
million for the allocation of Shared Services in 1996, 1995 and 1994,
respectively. The amount of allocated Shared Services decreased in 1996 as a
result of the dispositions of the Agrimax and Vinifera businesses.

LIQUIDITY AND CAPITAL RESOURCES

JUNE 30, SEPTEMBER 30,
1997 1996

Cash and cash equivalents.....................$ 848,000 $ 477,000
Working capital (deficiency).................. 1,815,000 (3,163,000)

At June 30, 1997, Agritope had working capital of $1.8 million, as
compared to a working capital deficiency of $3.2 million at September 30, 1996.
The increase in working capital was principally attributable to the conversion
of $3.4 million of convertible notes into 250,367 shares of Epitope common
stock. Concurrent with the note conversion, Epitope made a $4.4 million capital
contribution to Agritope. Working capital also increased due to a $1.5 million
buildup in Vinifera's inventory of growing grapevine plants. The grapevine
plants are grafted and then kept in greenhouses for approximately 10 weeks
before they are ready for sale. The plants can be maintained in greenhouses or
stored outside for several years during which time they continue to grow.
Inventory on hand at June 30, 1997, represents grapevine plants expected to be
sold in the summer of 1997 and in the spring of 1998.

Expenditures for property and equipment were $1.5 million during the
nine months ended June 30, 1997, largely as a result of expansion of greenhouse
capacity at Vinifera. During the first quarter of 1997, Agritope made a one-time
cash payment of $590,000 to a co-inventor of Agritope's ethylene control
technology who is an officer of Agritope in exchange for all rights to future
payments. Agritope has also acquired certain rights to certain proprietary genes
for which it made payments of $171,000 in the period. Such amounts are included
in "Patents and proprietary technology, net." Agritope's investment in
affiliated companies, obtained in connection with the

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divestiture of its fresh flower packaging and distribution business, was reduced
by a non-cash charge of $1.9 million in the first quarter of 1997 reflecting the
permanent impairment in the value of these investments.

Cash flows from operating activities improved significantly in 1996
largely due to the divestiture of Agrimax and Vinifera. Year-end inventories
increased by $510,000 from 1995 to 1996 due to the reacquisition of Vinifera in
August 1996. Additions to property and equipment decreased in 1995 primarily due
to the divestiture of Agrimax and Vinifera and increased in 1996 as a result of
expansion of greenhouse capacity at Vinifera, which was reacquired in August
1996. Expenditures for patents and proprietary technology increased in 1996
primarily due to a payment for Agritope's ethylene control technology.

Historically, the primary sources of funds for meeting Agritope's
requirements for operations, working capital and business expansion have been
$43.5 million in cash from Epitope, $5.4 million principal amount of convertible
notes, $1.6 million of investments in Vinifera by minority shareholders, and
$1.0 million in funding from strategic partners and other research grants.
Agritope expects to continue to require funds to support its operations and
research activities. Agritope intends to utilize cash reserves, cash generated
from sales of products and research funding from strategic partners and other
research grants to provide the necessary funds. Agritope may also receive
additional funds from the sale of equity securities.

Immediately following the spin-off and related financing, Agritope is
expected to have $--- million in cash and cash equivalents on hand to finance
its continued operations. Agritope presently anticipates that these funds will
be sufficient to finance operations as a separate business for at least two
years after the spin-off, based on currently estimated revenues and expenses.
Because this estimate is based on a number of factors, many of which are beyond
its control, Agritope cannot be certain that this estimate will prove to be
accurate, and to the extent that Agritope's operations do not progress as
anticipated, additional capital may be required. Agritope currently utilizes a
portion of Epitope's office and research and development facilities and is
allocated a charge representing the cost of such facilities. As soon as
practicable after the spin-off, Agritope intends to relocate its administrative
and research and development activities to separate facilities to be leased.
Management estimates that the cost to relocate, including leasehold
improvements, will not exceed $2.0 million and that the cash on hand following
the spin-off will be adequate to meet this need. Additional capital may not be
available on acceptable terms, if at all, and the failure to raise such capital
would have a material adverse effect on Agritope's business, financial
condition, and results of operations. See "Risk Factors--Need for Additional
Funds."

DESCRIPTION OF BUSINESS

GENERAL

Agritope is a biotechnology company specializing in the development of
new fruit and vegetable plant varieties for sale to the fresh produce industry.
The Company is utilizing its patented ethylene control technology to produce a
wide variety of fruits and vegetables that are resistant to the decaying effects
of ethylene. The Company also recently acquired certain rights to certain
proprietary genes from the Salk Institute for Biological Studies. Agritope
believes that the Salk Genes may have the potential to confer disease
resistance, enhance crop yield, control flowering, and enhance gene expression
in plants. Agritope has an option to obtain a worldwide license to use the Salk
Genes in a wide range of fruit and vegetable species.

The Company consists of two units: Agritope Research and Development
and Vinifera. Agritope Research and Development contributes biotechnology and
product development to strategic partners and provides disease screening and
elimination programs to Vinifera. Through Vinifera, Agritope believes that it
offers one of the most technically advanced grapevine plant propagation and
disease screening and elimination programs available to the wine and table grape
production industry.

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<PAGE>

AGRITOPE BIOTECHNOLOGY PROGRAM

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

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

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

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

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

Ethylene Control Technology. Agritope's ethylene control technology is focused
on the use of a patented gene known as SAMase. The expression of SAMase in
plants produces an enzyme that acts to degrade one of the important precursor
compounds (S-adenosylmethionine or "SAM") necessary for the production of
ethylene. Agritope has genetically engineered plants to express the SAMase gene
only when certain levels of rising ethylene concentrations are reached in the
tissues of the fruit or plant. This feature causes the production of greater
levels of the enzyme that degrades SAM in response to a correspondingly higher
level of ethylene. Agritope believes that this technology thus offers a major
advantage over other approaches to ripening control in that the production of

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<PAGE>

ethylene may be specifically reduced to levels that allow for the initiation of
ripening but that delay the spoiling effects of excess ethylene. Therefore, the
fruit can be maintained at an optimal level of ripeness for an extended period
of time. An additional benefit of Agritope's technology is that the reaction
catalyzed by the SAMase gene results in compounds normally found in plants.
Agritope believes its SAMase technology can be utilized for the control of
ethylene in any plant species where ethylene affects ripening or senescence.

Agritope's application of ethylene control technology to various fruit
and vegetable crops is at different stages, as described below. There are
difficult scientific objectives to be achieved with respect to application of
the technology to certain crops before the technical or commercial feasibility
of the modified crops can be demonstrated. There can be no assurance that the
technology can be successfully applied to particular crops or that the modified
crops can be successfully and profitably produced, distributed, and sold. See
"Risk Factors--Uncertainty of Product Development."

Agritope's ripening control technology is protected by a U.S. patent
covering the use of any gene that encodes S-adenosylmethionine hydrolase (the
enzyme expressed by the SAMase gene) in any plant species. In addition to the
patent on the SAMase gene, utility claims have been allowed on the promoter/gene
combination used by Agritope in applications currently under development as well
as potential applications in all other fruit-bearing plants. In the area of
regulated ripening control, Agritope has four additional U.S. and foreign
patents pending. In addition, Agritope has three U.S. and foreign patent
applications pending in related areas.

Development Programs. Agritope's research and development programs are directed
toward several highly perishable fruit and vegetable crops described below. The
development program comprises five stages, including gene isolation,
transformation, product evaluation, seed/plant production and product launch,
defined below.

The following chart shows the approximate progress Agritope has made to
date with various crops, which are described in more detail below.

[Chart titled "Agritope Product Development Program" listing the stages
of development (gene isolation, transformation, product evaluation,
seed/plant production, and product launch). The chart shows that the
following products are in the stages indicated:

Melon Product Evaluation
Tomato Product Evaluation
Raspberry Product Evaluation
Additional Crops Gene Isolation]

Gene Isolation: The initial stage of genetic engineering. Gene
isolation involves the identification and characterization of genes and
gene promoters for use in Agritope's development programs. These
genetic elements are then combined for use in genetically engineered
plants.

Transformation: The stage at which the new genetic material is
introduced into the plant. The transgenic plants which result are then
available for product evaluation.

Product Evaluation: The analysis of transgenic plants in both
laboratory and field settings to determine commercial utility. This
stage also involves the plant breeding and selection process to develop
commercially competitive new varieties that incorporate the Agritope
technology. Regulatory data are also collected and submitted at this
stage.

Seed/Plant Production: Propagation of selected plant material (either
seed or plants) in quantities needed for commercial production.

Product Launch: Commercial production and sale, following regulatory
clearance.

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<PAGE>

Melon. The U.S. wholesale fresh melon market is estimated to exceed $350 million
annually. Perishability in melons results in substantial product losses during
the processes of production, harvesting, and distribution. Agritope believes
that melons represent a substantial market opportunity for implementation of its
ripening control technology. Recent scientific reports have demonstrated a
dramatic increase in shelf life for specialty type melons in which the ability
to produce ethylene has been impaired. Using proprietary seed varieties supplied
by two units of the French seed company Groupe Limagrain: Clause Semences and
its U.S. affiliate Harris Moran Seed Company ("Harris Moran"), Agritope is
developing commercial melon varieties with controlled ripening and increased
post-harvest product life. Transgenic melons containing Agritope's ethylene
control gene are currently being evaluated jointly by Harris Moran and Agritope
technicians.

Tomato. The annual U.S. wholesale fresh market tomato business is estimated at
$1.7 billion. In order to facilitate the commercialization of its ethylene
control technology for this market, Agritope formed Superior Tomato Associates,
L.L.C. ("STA"), a joint venture with Sunseeds Company, the developer and
producer of several leading fresh market tomato varieties.

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

STA is currently in the process of developing and testing transgenic
cherry, roma, and large fruited vine ripe tomato varieties. Agritope has
developed lines of elite tomato germplasm provided by Sunseeds. Recent field
trials have successfully demonstrated the transfer of Agritope's SAMase ripening
control technology to a number of Sunseeds' elite breeding lines. Sunseeds is
conducting further breeding and field trials of these transgenic lines. These
trials will be followed by production scale trials that, if successful, will
lead to regulatory submissions and, if regulatory clearances are received,
commercial-scale seed production. Seeds will then be sold to approved growers,
who will pay STA a royalty on net sales of tomatoes grown from the seed.

Prior to the formation of STA, Agritope submitted safety, nutritional,
and environmental information on a prototype transgenic tomato line to both the
USDA and the FDA. In March 1996, the USDA issued its finding that this line has
no significant environmental impact and would no longer be considered a
regulated article. During the same month the FDA determined that the variety did
not raise issues that would require pre-market review or approval by that
agency. In addition to receiving these U.S. regulatory clearances, Agritope also
conducted field evaluations of SAMase tomato lines in Mexico under permits
granted by the Mexican Ministry of Agriculture. In order to commence sale of
selected varieties, Agritope will be required to make supplemental submissions
to the USDA and FDA that establish that such varieties are comparable to the
previously cleared lines.

Raspberry. The wholesale raspberry market, estimated at $48 million annually in
the U.S., has experienced limited growth because of the extreme perishability of
the fruit. Agritope believes that the successful development of raspberries
containing its ethylene control technology could permit a significant expansion
of the fresh raspberry market.

In a collaboration with Sweetbriar Development, Inc. ("Sweetbriar"),
the largest fresh raspberry producer in the U.S., Agritope has engineered
several of Sweetbriar's proprietary commercial raspberry varieties to contain
the SAMase gene. Initial field trials of transgenic raspberries are currently
underway at Sweetbriar facilities in California and Agritope facilities in
Woodburn, Oregon. Agritope has already demonstrated the ability to reduce
ethylene synthesis in the fruit. Successful development of a commercial
transgenic raspberry, which would be owned by Sweetbriar, will require further
demonstration of improved shelf life as well as additional field trials to
obtain the appropriate regulatory clearances. If these conditions are met,
Sweetbriar would produce the new

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<PAGE>

raspberries for distribution and marketing by Driscoll Strawberry Associates
("Driscoll"), the largest distributor of fresh raspberries and strawberries in
the U.S. Agritope would receive royalties on wholesale product sales.
Separately, Agritope has integrated its ripening control technology into several
public domain varieties.

Other Crops. Agritope is also pursuing research and development programs to
incorporate its SAMase technology into other crops where perishability causes
significant losses in the production and distribution process. These include
strawberries, lettuce, bananas, peaches, pears, and apples. The estimated U.S.
wholesale markets for these crops range from $325 million for pears to $2.4
billion for bananas.

The Salk Genes. In addition to its ethylene control technology, Agritope also
recently acquired certain rights to certain proprietary genes discovered by
scientists at the Salk Institute for Biological Studies ("Salk"). The Company
believes that the Salk Genes may have the potential to confer disease
resistance, enhance yield, control flowering and enhance gene expression in
plants. Agritope believes these new technologies will allow Agritope to leverage
its ability to genetically engineer fruits and vegetables and enhance its
ability to broaden its pipeline of new genetically engineered products. U.S. and
international patent filings have been made with respect to each of these genes.
A patent covering one gene, LEAFY, recently issued in the U.S.

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

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

SAR-1 is a gene that confers systemic acquired resistance ("SAR"). SAR
is the ability of plants to develop a powerful disease resistance state. After
exposure to a non-lethal inoculum of a bacterial, viral or fungal pathogen, a
plant will possess a heightened ability to defend itself against a broad range
of new pathogenic challenges. The phenomenon of SAR has been studied for years
but only recently at the molecular level. Scientists at the Salk Institute for
Biological Studies, in collaboration with those at the Samuel Roberts Nobel
Foundation, have discovered a gene, SAR-1, that appears to play a key role in
the maintenance of SAR. Agritope intends to utilize SAR-1 in the development of
plant varieties that have increased disease resistance to a broad range of plant
pathogens.

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

BIN1 is a gene that encodes the plant receptor for brassinosteroids.
The BIN1 gene encodes a receptor-like protein kinase involved in brassinosteroid
signaling and provides further opportunities for biotechnological

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<PAGE>

applications related to yield increase in transgenic plants. In principle, it is
possible to manipulate both hormone biosynthesis with DET2, as described above,
as well as the level of brassinosteroid receptor through BIN1. In addition, it
is possible to generate BIN1 derivatives that have been activated as if
brassinosteroid were bound. Both approaches, either separately or together, have
the potential to greatly stimulate plant growth and yield.

Cyclin is a gene that is involved in regulating cell division. Salk
Institute scientists have expressed the cyclin gene in transgenic plants and
believe it may play a role in accelerating root growth. Furthermore, transgenic
crop plants containing the cyclin gene are also expected to have enhanced
vegetative growth properties. Agritope intends to test the cyclin gene initially
in commercial tomato and carrot varieties.

LEAFY is a gene that is responsible for flower initiation in plants.
Scientists at the Salk Institute have demonstrated that transgenic aspen trees
expressing LEAFY develop flowers within months rather than the 8 to 10 years
that a non-transgenic aspen requires. Agritope intends to investigate uses of
the LEAFY gene for use in tree fruits and grapevines. Alternatively, inhibiting
LEAFY expression in plants may prevent plants from flowering, which could be of
value in some vegetable crops such as lettuce and celery.

Booster Element ("BE") is a genetic element (a small piece of DNA) that
can be added to plant gene promoters to enhance gene expression. The BE
technology is applicable to a range of plant genetic engineering strategies,
including the Company's SAMase ripening control technology, and to other Salk
genes. For example, certain crops may need a higher level of SAMase expression
to produce a specific level of ripening control. BE may facilitate manipulation
of the promoters controlling SAMase expression and thus improve the utility of
the SAMase technology.

Additional Technologies. Agritope is also conducting research on several
additional early-stage technologies. For example, Agritope scientists have
devised a genetic engineering strategy to confer seedlessness to fruit crops. In
addition, Agritope has recently been awarded a Phase I Small Business Innovation
Research ("SBIR") grant to develop a novel geminivirus resistance strategy and
to incorporate the approach into commercial tomato varieties. Geminiviruses are
a class of plant viruses that cause widespread damage in several crops including
tomato, pepper, melon and squash.

COMMERCIALIZATION STRATEGY

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

GRANTS AND CONTRACTS

U.S. Department of Commerce. In October 1997, Agritope was awarded a U.S.
Department of Commerce, National Institutes of Technology ("NIST"), Advanced
Technology Program ("ATP") grant. The award covers a three-year project period
and totals $990,000. Agritope was awarded the grant for use in the application
of its proprietary ripening control technology to certain tree fruits and
bananas.

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

SBIR Programs. Agritope actively participates in the SBIR programs sponsored by
the USDA. The SBIR programs have two phases. Phase I covers a six-month project
period and a total award not to exceed $100,000. Phase II

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covers a two-year project period and a total award not to exceed $750,000.
Agritope was awarded a Phase I grant of $50,000 in 1994 plus a Phase II grant of
$198,000 in 1995 for development of diagnostic tests for the detection of
grapevine leafroll virus. In 1997, Agritope received a $55,000 Phase I grant for
work on gemini virus resistance strategies in tomato.

Cooperative Research and Development Agreements. Agritope has entered into two
Cooperative Research and Development Agreements ("CRADAs") with the U.S.
Department of Agriculture /Agricultural Research Services ("USDA/ARS"). Under
the CRADAs, Agritope will collaborate with USDA/ARS laboratories by providing
research services or partial funding for research projects. In return, Agritope
has been granted a right of first refusal to obtain a license for any resulting
inventions. The first CRADA is to evaluate and confer raspberry bushy dwarf
virus resistance ("RBDVr") in raspberry. This research is a collaborative effort
with the Northwest Center for Small Fruit Research, located in Corvallis,
Oregon. The purpose of the second CRADA is for the evaluation of the ripening
physiology of SAMase transformed melon. This research will be carried out
through the USDA/ARS research station in Weslaco, Texas.

Other Grants and Contracts. Agritope has also been awarded grant support in the
past from the Oregon Strawberry Commission and Oregon Raspberry and Blueberry
Commission for antifungal biocontrol research. Agritope also receives funds for
research and development programs from its strategic partners. Agritope intends
to continue to participate in the SBIR program, similar grant programs and
projects with strategic partners, as it deems appropriate. Agritope regularly
makes application for new grants, but there is no assurance that grant support
will be continued.

VINIFERA

Vinifera, Inc. was incorporated in 1993 to participate in the grapevine
nursery business. Through proprietary processes, Vinifera propagates and grafts
grapevine plants for sale to vineyards and to growers of table grapes. Industry
sources have estimated that 44 million grafted wine grapevine plants were
produced in California in 1996. This number is expected to increase to between
70 and 90 million by the year 2000.

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

Vinifera is headquartered in Petaluma, California, with propagation and
production facilities there and in Woodburn, Oregon. Its library of grapevine
plants includes 32 different phylloxera-resistant types of rootstock, 88
different wine varietal clones, and ten different table grape varietal clones.
In addition, several French and Italian varietals are currently passing through
quarantine and, when released, will be available to the U.S. market exclusively
through Vinifera. Vinifera believes that this collection of different grapevine
clones is one of the largest in the world. Vinifera's U.S. customer base
consists of over 80 vineyards in California, Washington and Oregon. In 1995,
Vinifera established a joint venture in Argentina (Vinifera Sudamericana S.A.)
to begin the propagation of plant material in that country. The first vines
produced are expected to be sold in 1997. Vinifera is currently in the process
of establishing similar ventures in other countries with large grape and wine
production industries.

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<PAGE>

COMPETITION

The plant biotechnology industry is highly competitive. Competitors
include independent companies that specialize in biotechnology; chemical,
pharmaceutical and food companies that have biotechnology laboratories;
universities; and public and private research organizations. Agritope believes
that many companies including companies with significantly greater financial
resources, such as Monsanto Company, DNAP Holding and Zeneca Plant Sciences, are
engaged in the development of mechanisms to control the ripening and senescence
of fruit and vegetable products. Technological advances by others could render
Agritope's products less competitive. The Company believes that, despite
barriers to new competitors such as patent positions and substantial research
and development lead time, competition will intensify, particularly from
agricultural biotechnology firms and major agrichemical, seed and food companies
with biotechnology laboratories.

GOVERNMENT REGULATION

Regulation by federal, state and local government authorities in the
U.S. and by foreign governmental authorities will be a significant factor in the
future production and marketing of Agritope's genetically engineered fruit and
vegetable products.

The federal government has implemented a coordinated policy for the
regulation of biotechnology research and products. The USDA has primary federal
authority for the regulation of specific research, product development and
commercial applications of certain genetically engineered plants and plant
products. The FDA has principal jurisdiction over plant products that are used
for human or animal food. The EPA has jurisdiction over the field testing and
commercial application of plants genetically engineered to contain pesticides.
Other federal agencies have jurisdiction over certain other classes of products
or laboratory research.

The USDA regulates the growing and transportation of most genetically
engineered plants and plant products. In March 1996 following a request from
Agritope, the USDA issued a determination that permits the growing and shipping
of Agritope's prototype variety of ripening-controlled cherry tomato anywhere in
the U.S. in the same manner as conventionally developed tomatoes.

In May 1992, the FDA announced its policy on foods developed through
genetic engineering (the "FDA Policy"). The FDA Policy provides that the FDA
will apply the same regulatory standards to foods developed through genetic
engineering as applied to foods developed through traditional plant breeding.
Under the FDA Policy, the FDA will not ordinarily require premarket review of
genetically engineered plant varieties of traditional foods unless their
characteristics raise significant safety questions, such as elevated levels of
toxicants, the presence of allergens, or they are deemed to contain a food
additive.

In March 1996, the FDA announced its determination, based on its review
of food safety data submitted by Agritope, that Agritope's prototype variety of
ripening controlled cherry tomato expressing the SAMase gene has not been
significantly altered with respect to food safety or nutritive value when
compared to conventional tomatoes.

Currently, the FDA Policy does not require that genetically engineered
products be labeled as such, provided that such products are as safe and have
the same nutritional characteristics as conventionally developed products.
However, there can be no assurance that the FDA will not reconsider its
position, or that local, state or international authorities will not enact
labeling requirements, any of which could have a material adverse effect on the
marketing of products derived using the tools and techniques of genetic
engineering.

The FDA is considering modifying its policy on foods developed through
genetic engineering to include a Premarket Notification ("PMN") procedure. This
policy modification could require a company that develops genetically engineered
foods to inform the FDA that its safety evaluation is complete and that the
company intends to commercialize the product. The objective of the PMN is to
make the FDA and the public aware of all new

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<PAGE>

genetically engineered food products entering the market. Agritope believes that
any future requirement for a PMN should not delay plans to commercialize its
genetically engineered fruit and vegetable products.

Agritope's complete range of agribusiness and plant biotechnology
activities are subject to general FDA food regulations and are, or may be,
subject to regulation under various other laws and regulations. These include
but are not limited to the Occupational Safety and Health Act, the Toxic
Substances Control Act, the National Environmental Policy Act, other federal
water, air and environmental quality statutes, import/export control
legislation, and other laws. At the present time most states are generally
deferring to federal agencies (USDA or EPA) for the approval of genetically
engineered plant field trials, although states are provided a review period
prior to the issuance of a field trial permit. Failure to comply with applicable
regulatory requirements could result in enforcement action, including withdrawal
of marketing approval, seizure or recall of products, injunction or criminal
prosecution.

International regulatory policies for genetically engineered plants and
plant products are not complete. Consequently, it is possible that additional
data, labeling or other requirements will be required in countries where
Agritope intends to grow and/or commercialize its genetically engineered
products. Foreign regulatory agencies could require Agritope to conduct further
safety assessments and potentially delay product development programs or
commercialization of resulting products.

To date, to the best of its knowledge, Agritope has successfully
functioned within the scope of applicable laws and regulations, including rules
administered by the USDA, the FDA, the Mexican Ministry of Agriculture, and the
Chilean Ministry of Agriculture (Servicio Agricola y Ganadero Departemento
Proteccion Agricola de Chile). Agritope believes it is in substantial compliance
with all applicable laws and regulations pertaining to the development and
commercialization of its products.

PATENTS AND PROPRIETARY INFORMATION

In 1995, Agritope received a U.S. patent relating to its ethylene
control gene. Agritope has also applied for additional U.S. and foreign patent
protection for its ethylene control technology. Agritope's ability to
commercialize products depends in part on the ownership or right to use relevant
enabling technology as well as the ownership or right to use genes of interest.
Agritope anticipates filing patent applications for protection on future
products and technology. U.S. patents generally have a maximum term of 20 years
from the date an application is filed or 17 years from issuance, whichever is
longer.

Much of the technology developed by Agritope is subject to trade secret
protection. To reduce the risk of loss of trade secret protection through
disclosure, Agritope requires its employees and consultants to enter into
confidentiality agreements. Agritope believes that patent and trade secret
protection is important to its business. However, the issuance of a patent or
existence of trade secret protection does not in itself ensure Agritope's
success. Competitors may be able to produce products competing with a patented
Agritope product without infringing on Agritope's patent rights. Issuance of a
patent in one country generally does not prevent others from manufacturing or
selling the patented product in other countries. The issuance of a patent to
Agritope or to a licensor is not conclusive as to validity or as to the
enforceable scope of the patent. The validity or enforceability of a patent can
be challenged by litigation after its issuance, and, if the outcome of such
litigation is adverse to the owner of the patent, the owner's rights could be
diminished or withdrawn. Trade secret protection does not prevent independent
discovery and exploitation of the secret product or technique.

Agritope recently acquired certain rights to five new proprietary genes
discovered by scientists at the Salk Institute for Biological Studies. Agritope
believes the Salk Genes may have the potential to confer disease resistance,
enhanced yield, controlled flowering, and enhanced gene expression in plants.
All of the Salk Gene technologies are covered by pending patent applications.
Agritope has an option to obtain an exclusive worldwide license to the Salk
Genes for a field of use that includes a variety of plant species and nearly all
fruit and vegetable crops.

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<PAGE>

PERSONNEL

At September 30, 1997, Agritope and its subsidiaries had 46 full-time
employees, including 19 in research and development and 23 at the Vinifera grape
plant nursery operation, which also employs seasonal part-time employees as
needed. Agritope considers its relations with its employees to be excellent.
None of its employees are represented by labor unions.

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

SCIENTIFIC ADVISORY BOARD

Agritope utilizes the services of a Scientific Advisory Board. The
Scientific Advisory Board meets periodically to review Agritope's research and
development efforts and to apprise Agritope of scientific developments pertinent
to Agritope's business. The Agritope Scientific Advisory Board consists of
Eugene W. Nester, Ph.D., Professor and Chair Department of Microbiology,
University of Washington; Peter R. Bristow, Ph.D., Associate Professor of Plant
Pathology, Washington State University; Roger Beachy, Ph.D., Scripps Family
Chair, Department of Cell Biology, Scripps Research Institute; and Christopher
J. Lamb, Ph.D., Professor, Director, Plant Biology Lab, Salk Institute for
Biological Studies. Drs. Nester and Beachy are members of the National Academy
of Sciences.

PROPERTIES

Agritope currently uses a portion of Epitope's office space and
research and development facilities in Beaverton, Oregon, consisting of
approximately 35,600 square feet of office, manufacturing, and laboratory space.
Agritope is charged a monthly fee of $16,000 by Epitope for use of the
facilities. As soon as practicable after the spin-off, Agritope intends to
relocate its office and research and development operations to other leased
facilities, but no leasing arrangements have been concluded.

Agritope owns a 15-acre farm in Woodburn, Oregon, which it leases to
Vinifera for use in connection with Vinifera's grapevine propagation operations.
Greenhouse capacity at the farm currently totals 60,000 square feet.

In addition to leasing Agritope's Oregon farm and greenhouse, Vinifera
leases 250,000 square feet of greenhouse space in Petaluma, California under a
lease that expires January 31, 2001. The lease provides an option to purchase
the leased premises, exercisable through January 31, 1999, for a price of $1.3
million. The California greenhouse is currently in the final stages of being
upgraded to provide the capacity necessary to meet anticipated 1997 and 1998
production requirements.

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

LEGAL PROCEEDINGS

There are no material legal proceedings pending against Agritope.

DIVIDEND POLICY

Agritope has never declared or paid cash dividends on its common stock.
Agritope currently anticipates that it will retain all future earnings for use
in the operation and growth of its business and does not anticipate paying any
cash dividends in the foreseeable future. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

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<PAGE>

TRANSFER AGENT

The transfer agent and registrar for the Agritope Stock is ChaseMellon
Shareholder Services, L.L.C.

- 38 -

<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Agritope Board consists of six directors. Because the Agritope
Board is a staggered board, the directors have been designated as Class 1, Class
2 and Class 3 directors. Directors of each class will serve for a term expiring
at the annual meeting of Agritope shareholders in 1998, 1999 and 2000,
respectively.

The table below presents the names, ages and positions of Agritope's
executive officers and directors as of the Distribution Date.

NAME AGE POSITION
Adolph J. Ferro, Ph.D. 55 Chairman of the Board, President,
Chief Executive Officer and
Class 1 Director.

Gilbert N. Miller 56 Executive Vice President,
Chief Financial Officer,
Secretary and Class 1 Director

Richard K. Bestwick, Ph.D. 43 Senior Vice President--Research
and Development

Matthew G. Kramer 40 Vice President--Product Development

Joseph A. Bouckaert 56 President and Chief Executive
Officer--Vinifera, Inc.

W. Charles Armstrong 52 Class 2 Director

Roger L. Pringle 56 Class 2 Director

Michel de Beaumont 55 Class 3 Director

Nancy L. Buc -- Class 3 Director

Adolph J. Ferro, Ph.D., has been President and Chief Executive Officer
of Agritope since 1989, and a director since 1990. He is Chairman of the Board
of Agritope. He was President and Chief Executive Officer of Epitope from 1990
through May 1997, and has been a director of Epitope since 1990. Dr. Ferro was
Senior Vice President of Epitope from 1988 until 1990. From 1987 until 1988, he
was Vice President of Research and Development. He was a cofounder of
Agricultural Genetic Systems, Inc., which Epitope acquired and renamed Agritope
in 1987. Prior to joining Agritope, he was a Professor in the Department of
Microbiology at Oregon State University ("OSU"). From 1981 to 1986, he was an
Associate Professor at OSU, and from 1978 to 1981, he was an Assistant Professor
at OSU. From 1975 to 1978, he was Assistant Professor at the University of
Illinois at Chicago in the Department of Biological Sciences. Dr. Ferro received
a B.A. degree from the University of Washington in 1965, an M.S. degree in
biology from Western Washington University in 1970, and a Ph.D. in bacteriology
and public health from Washington State University in 1973.

Gilbert N. Miller has been Chief Financial Officer of Agritope since
1991. He was also Senior Vice President of Agritope from 1992 until February
1996, when he became Executive Vice President. He has been a director of
Agritope since August 1997. He joined Epitope in 1989 as Executive Vice
President and Chief Financial Officer and has served as Epitope's Treasurer
since 1991. He will not serve as Executive Vice President and Chief

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<PAGE>

Financial Officer of Epitope after the Distribution. From 1987 to 1989, he was
Executive Vice President, Finance and Administration, of Northwest Marine Iron
Works, a privately held ship repair contractor located in Portland, Oregon. From
1986 to 1987, he was Vice President/Controller of the Manufacturing Group of
Morgan Products, Ltd., a manufacturer and distributor of specialty building
products based in Oshkosh, Wisconsin. He also held the position of Senior Vice
President/Finance of Nicolai Company, a Portland wood door manufacturing concern
which became a wholly owned subsidiary of Morgan Products, Ltd., in 1986. Mr.
Miller received a B.S. degree from Oregon State University and a Master of
Business Administration degree from University of Oregon. He is a certified
public accountant.

Richard K. Bestwick, Ph.D., has been a Senior Vice President of
Agritope since 1992. He became Chief Operating Officer--Research and Development
in October 1996 and was named Senior Vice President - Research and Development
in October 1997. He was employed by Epitope from 1987 to 1992. Prior to joining
Epitope, he was a Research Assistant Professor in the Department of Biochemistry
at the Oregon Health Sciences University, where he also completed his
postdoctoral training. Dr. Bestwick received a Ph.D. in Biochemistry and
Biophysics from Oregon State University and a B.S. degree from Evergreen State
College.

Matthew G. Kramer joined Agritope in 1994 as Vice President--Product
Development. From 1987 to 1994, he was Director of Production and Product
Development for Calgene Fresh, Inc., where he was involved in development and
commercialization of the FLAVR SAVR(TM) tomato. Mr. Kramer received an M.S.
degree in Agronomy and a B.S. degree at Montana State University.

Joseph A. Bouckaert joined Vinifera as its President and Chief
Executive Officer when Vinifera began operations in 1993. From 1988 to 1991, he
was Vice Chairman of DNA Plant Technology Corporation, a publicly held
agricultural biotechnology company with offices in Cinnaminson, New Jersey, and
Oakland, California. He also was a co-founder and member of the board of
directors of Florigene, B.V., an agricultural biotechnology company focused on
the flower business and located in the Netherlands. From 1985 to 1988, he served
as President and Chief Executive Officer of Advanced Genetic Sciences Inc. a
publicly held biotechnology company located in Oakland, California. In 1982, Mr.
Bouckaert co-founded Plant Genetic Systems, N.V., a privately held agricultural
biotechnology company located in Brussels, Belgium, and served as its first
Managing Director from 1982 through 1986. Mr. Bouckaert received a Juris Doctor
degree from the University of Leuven in Belgium and postgraduate degrees in
Business Administration from the University of Ghent in Belgium, and the
University of Kentucky in Lexington, Kentucky.

W. Charles Armstrong has been a director of Agritope since August 1997.
He has also been a director of Epitope since 1989 and a director of Pacificorp,
a public utility holding company, since 1996. He served as President and Chief
Executive Officer of Epitope from May 1997 to October 1997. He was Chairman and
Chief Executive Officer of Bank of America Oregon from September 1992 until
September 1996. From April to September 1992, he was Chairman and Chief
Executive Officer of Bank of America Idaho. Mr. Armstrong served as President
and Chief Operating Officer of Honolulu Federal Savings Bank from February 1989
to April 1992. Prior to February 1989, he was President and Chief Executive
Officer of West One Bank, Oregon.

Roger L. Pringle has been a director of Agritope since 1990. He has
been a director of Epitope since 1989, and Chairman of the Board of Epitope
since 1990. He is President of The Pringle Company, a management consulting firm
in Portland, Oregon, which he founded in 1975.

Michel de Beaumont was elected a director of the Company in September
1997. Since 1981, Mr. de Beaumont has served as a co-founder and director of
American Equities Overseas (UK) Ltd. of London, England, a wholly owned
subsidiary of American Equities Overseas, Inc. ("American Equities"), a private
securities brokerage and corporate finance firm. Prior to 1981, Mr. de Beaumont
was Vice President in the London office of American Securities Corp. from 1978
to 1981. He also served as Vice President, Institutional Sales in the London
office of Smith Barney Harris Upham, Inc. from 1975 to 1978 and as a Vice
President at Oppenheimer

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<PAGE>

& Co. Mr. de Beaumont graduated from the University of Poitiers and Paris with
degrees in Advanced Maths, Physics and Chemistry and has earned a degree in
business administration from the University of Paris.

Nancy L. Buc, Esq., was elected a director of the Company in September
1997. She is a partner in the law firm of Buc & Beardsley in Washington, D.C.
Ms. Buc served as General Counsel for the FDA from 1980 to 1981. During an
earlier period of government service, she served successively as
Attorney-Advisor to the Chairman of the Federal Trade Commission and Assistant
Director of that agency's Bureau of Consumer Protection. A member of the
Institute of Medicine's Committee on Contraceptive Research and Development and
its Committee on NIDA Medications Development, she was also a member of the
National Institutes of Health Recombinant DNA Advisory Committee. She served as
a member of the Office of Technology Assessment Advisory Committee on New
Developments in Biotechnology and its panel on Government Policies and
Pharmaceutical Research and Development. She was also a member of the American
Bar Association Antitrust Law Section's Special Committee to Study the Federal
Trade Commission. She is a Director of the Virginia Law School Foundation and
the Women's Legal Defense Fund. Ms. Buc is a graduate of Brown University and
the University of Virginia School of Law. Ms. Buc holds an honorary Doctor of
Laws from Brown and is a fellow emerita of the Brown Corporation, that
university's governing board.

COMMITTEES OF THE BOARD

The Agritope Board has established an Executive Committee, an Audit
Committee, a Compensation Committee and a Nominating Committee. Pursuant to the
Bylaws, the Agritope Board may also establish other committees from time to time
in its discretion.

The Executive Committee consists of at least two directors and may
exercise all the authority and powers of the Agritope Board in the management of
the business and affairs of Agritope, except those reserved to the Agritope
Board by the Oregon Business Corporation Act. Mr. Pringle (chair), Dr. Ferro and
Mr. Miller are the initial members of the Executive Committee.

The Audit Committee consists of at least two outside directors and,
among other things, recommends the appointment of independent public
accountants, reviews the scope of the annual audit and the engagement letter,
reviews the independence of the independent accountants and reviews the findings
and recommendations of the independent accountants and management's response.
The Audit Committee also reviews the internal audit and control functions of
Agritope and makes recommendations for changes in accounting systems, if
warranted. Mr. Armstrong (chair), Ms. Buc and Mr. Pringle are the initial
members of the Audit Committee.

The Compensation Committee also consists of at least two outside
directors and determines compensation for the officers of Agritope, administers
stock-based compensation plans and other performance-based compensation plans
adopted by Agritope, and considers matters of director compensation and
benefits. Ms. Buc (chair), Mr. Armstrong, and Mr. de Beaumont are the initial
members of the Compensation Committee.

The Nominating Committee which consists of at least two directors will
select and recommend candidates to serve on the Agritope Board, whose names will
be submitted for election at annual meetings of Agritope shareholders. The
Nominating Committee will also review and make recommendations to the Agritope
Board concerning the composition and size of the Agritope Board and its
committees. Mr. de Beaumont (chair), Ms. Buc, Dr. Ferro and Mr. Miller are the
initial members of the Nominating Committee.

COMPENSATION OF DIRECTORS

Nonemployee directors of Agritope are expected to receive compensation
of $----- for each board meeting attended. In addition, all directors are
expected to be reimbursed for out-of-pocket expenses in connection with
attending board and committee meetings. Directors are also eligible to receive
options under Agritope's 1997 Stock Award Plan. See "1997 Stock Award Plan."

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<PAGE>

EXECUTIVE COMPENSATION

The following table summarizes the compensation for the last three
fiscal years of the Chief Executive Officer and the three other executive
officers of Agritope whose salary and bonus exceeded $100,000 during the 1997
fiscal year. Information set forth in the table reflects compensation paid for
services rendered for Epitope and/or Agritope.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards

Annual Compensation Securities All Other
Underlying Compen-
Name and Principal Position Year Salary Bonus Options (1) sation(2)
- --------------------------- ---- ------ ----- ----------- ---------

<S> <C> <C> <C> <C> <C>
Adolph J. Ferro, Ph.D. 1997 $ 240,000 $ - $ 7,354
Chairman of the Board, 1996 214,183 50,000 - 4,237
President and Chief Executive 1995 200,769 113,245 5,390
Officer

Gilbert N. Miller 1997 165,000 - - $ 7,125
Executive Vice President 1996 128,510 33,075 - 3,206
and Chief Financial Officer 1995 130,962 - 5,021

Richard K. Bestwick, Ph.D. 1997 150,000 - - -
Senior Vice President-- 1996 91,385 20,160 - 2,280
Research and Development (3)

Joseph A. Bouckaert 1997 160,000 - - -
President and Chief Executive 1996 160,000 33,600 - -
Officer--Vinifera, Inc.(4) 1995 115,592 40,000 - -
</TABLE>

(1) Represents the number of shares of Agritope Stock for which options
were awarded. Excludes options for Epitope Stock received under the
Epitope Award Plan as follows: Dr. Ferro--74,000 options in 1995; Mr.
Miller--34,000 options in 1995; Mr. Bouckaert--50,000 options in 1996.

(2) Represents amounts contributed to Epitope's 401(k) Plan as employer
matching contributions in the form of Epitope Stock.

(3) Dr. Bestwick was not an executive officer of Agritope during fiscal
1995.

(4) Information for Mr. Bouckaert for 1996 and 1995 includes compensation
paid for periods during which Vinifera was not a subsidiary of
Agritope.

GRANTS OF OPTIONS TO PURCHASE AGRITOPE STOCK

No options to purchase Agritope Stock were granted to officers named in
the "Summary Compensation Table" during the fiscal year ended September 30,
1997, and none of such officers held any options for Agritope Stock at September
30, 1997.

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<PAGE>

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OUTSTANDING OPTIONS FOR
AGRITOPE STOCK

None of the officers named in the "Summary Compensation Table"
exercised options to purchase Agritope Stock during the fiscal year ended
September 30, 1997.

EMPLOYMENT; CHANGE IN CONTROL AGREEMENTS

Pursuant to written employment agreements with Agritope, each of the
executive officers named in the Summary Compensation Table above is entitled to
receive one year of salary in the event of termination without cause (two years
in the case of Dr. Ferro and Mr. Miller) or two years of salary (three years in
the case of Dr. Ferro and Mr. Miller) if terminated without cause within 12
months following a change in control (within the meaning of the Exchange Act) or
sale of substantially all the assets of Agritope, except that Mr. Bouckaert's
agreement does not include a change-of-control provision. The agreements in each
case prohibit the officer from competing with Agritope for one year unless the
officer elects to waive the right to amounts otherwise payable. Mr. Bouckaert's
agreement prohibits him from competing with Vinifera for three years after
termination. The agreements do not expire by their terms, except that Mr.
Bouckaert's agreement terminates as of May 31, 2000. The other agreements are
terminable by Agritope on 90 days' notice with cause or, subject to payment of
the salary amounts described above, without cause.

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<PAGE>

1997 STOCK AWARD PLAN

GENERAL

The Agritope, Inc. 1997 Stock Award Plan (the "Award Plan") was adopted
by the Agritope Board and approved by Epitope as Agritope's sole shareholder in
October 1997. The Award Plan will continue in effect until awards have been
granted covering all shares available for issuance under the Award Plan or the
Award Plan is otherwise terminated by the Agritope Board. The Award Plan
provides for the issuance of a total of up to 2,000,000 shares of Agritope
Stock, subject to adjustment for changes in capitalization. A summary
description of certain terms and provisions of the Award Plan and options
proposed to be granted thereunder follows.

PURPOSE

The purpose of the Award Plan is to promote and advance the interests
of Agritope and its shareholders by enabling Agritope to attract, retain, and
reward key employees, outside advisors, and directors. The Award Plan is
intended to strengthen the mutuality of interests between such employees,
advisors, and directors and Agritope's shareholders by offering equity-based
incentive awards to promote a proprietary interest in pursuing the long-term
growth, profitability, and financial success of Agritope.

AWARDS AND ELIGIBILITY

The Award Plan provides for stock-based awards to (i) employees of
Agritope and its subsidiaries (including individuals who may also be officers or
directors of Agritope or a subsidiary), (ii) members of scientific advisory
committees or other consultants to Agritope or its subsidiaries ("Advisors"),
and (iii) nonemployee directors of Agritope or its subsidiaries. Awards that may
be granted under the Award Plan include stock options, stock appreciation
rights, restricted awards, performance awards, and other stock-based awards
(collectively, "Awards"). The Compensation Committee of the Agritope Board (the
"Committee") will administer the Award Plan and determine the key employees and
Advisors of Agritope and its subsidiaries who are to receive Awards under the
plan and the types, amounts, and terms of Awards. The Committee may delegate to
one or more officers of Agritope the authority to grant Awards to recipients who
are not executive officers or directors of Agritope and to determine the nature
of the Awards to be granted. The Committee is authorized to grant Awards to
non-employee directors from time to time in its discretion in accordance with
its fiduciary obligations to Agritope and its shareholders.

All employees are eligible to receive Awards under the Award Plan,
including each of Agritope's nonemployee directors and executive officers. No
options, stock appreciation rights ("SARs"), restricted awards, performance
awards, or other stock-based awards have been granted under the Award Plan.

NEW OPTIONS

It is currently anticipated that options ("New Options") to purchase a
total of approximately ------- shares of Agritope Stock will be granted to
officers, employees and nonemployee directors of Agritope under the Award Plan
effective on the Distribution Date. Each New Option will: (i) have an exercise
price equal to the fair market value of Agritope Stock on the Distribution Date,
(ii) become exercisable as to 25 percent of the shares covered by such option on
each of the first four anniversaries of the Distribution Date, and (iii) have a
term of ten years.

The following table shows the New Options that are expected to be
granted under the Award Plan as of the Distribution Date.

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<PAGE>

NEW PLAN BENEFITS
AGRITOPE, INC. 1997 STOCK AWARD PLAN

Number of
New
Name and Position Options

Adolph J. Ferro, Ph.D.
Chairman of the Board, President
and Chief Executive Officer
Gilbert N. Miller
Executive Vice President
and Chief Financial Officer
Richard K. Bestwick, Ph.D.
Senior Vice President--
Research and Development
Joseph A. Bouckaert
President and Chief Executive
Officer--Vinifera, Inc.
All executive officers as a group
All nonemployee directors as a group
All employees as a group, excluding
executive officers

DESCRIPTION OF TERMS OF AWARDS

Following is a brief summary of the various types of Awards that may be
granted under the Award Plan.

Options. Options granted under the Award Plan may be either incentive
stock options, a tax-favored form of stock option meeting the requirements of
Section 422 of the Code, or nonqualified options, which are not entitled to
favorable income tax treatment. ISOs must expire not more than ten years from
the date of grant. The Award Plan does not limit the maximum term for
nonqualified options. The exercise price per share for options granted under the
Award Plan generally must be at least 100 percent (for incentive stock options)
or 75 percent (for nonqualified options) of the fair market value of a share of
Agritope Stock on the date the option is granted. The Award Plan authorizes the
Committee to issue nonqualified deferred compensation options with an option
price substantially less than the fair market value of a share of Agritope Stock
on the date of grant (but not less than $1 per share) for the purpose of
deferring a specified amount of income for a recipient. The Committee, in its
discretion, may provide in the agreement evidencing an option that, to the
extent that the option is exercised using previously acquired shares of Agritope
Stock, the option holder shall automatically be granted a replacement ("reload")
option for a number of shares of Agritope Stock equal to the number of shares
delivered upon exercise with an option price equal to the fair market value of a
share of Agritope Stock on the date of exercise and subject to such other terms
as the Committee determines. The aggregate fair market value of shares for which
any participant may be granted ISOs which are exercisable for the first time
during any calendar year may not exceed $100,000. In addition, no individual
participant may be granted options for more than 500,000 shares during any
fiscal year period.

Stock Appreciation Rights. A recipient of SARs will receive, upon
exercise, a payment based on the increase in the price of a share of Agritope
Stock between the date of grant and the date of exercise. Payment may be in
cash, in shares of Agritope Stock, in the form of a deferred compensation option
or in any other form approved by the Committee. SARs may be granted in
connection with options or other Awards granted under the Award Plan or may be
granted as independent Awards.

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Restricted Awards. Restricted Awards may take the form of restricted
shares or restricted units. Restricted shares are shares of Agritope Stock that
may be subject to forfeiture if the recipient terminates employment or service
as a nonemployee director or Advisor during a specified period (the "Restriction
Period"). Stock certificates representing restricted shares are issued in the
name of the recipient, but are held by Agritope until the expiration of the
Restriction Period. From the date of issuance of restricted shares until any
forfeiture, the recipient is entitled to the rights of a shareholder with
respect to the shares, including voting and dividend rights. Upon expiration of
the Restriction Period and satisfaction of any other applicable conditions,
restricted shares vest and are delivered to the recipient. The Committee may
permit payment to be in cash, in installments or in the form of a deferred
compensation option.

Restricted units are Awards of units equivalent in value to a share of
Agritope Stock, which similarly may be subject to forfeiture if the recipient
terminates employment or service as a nonemployee director or Advisor during a
Restriction Period. At the expiration of the Restriction Period, payment with
respect to restricted units is made in an amount equal to the value of the
number of shares of Agritope Stock covered by the restricted units. Payment may
be in cash, unrestricted shares of Agritope Stock, or any other form approved by
the Committee.

Performance Awards. Performance Awards are designated in units
equivalent in value to a share of Agritope Stock. A performance Award is subject
to forfeiture if or to the extent that Agritope, a subsidiary, an operating
group, or the recipient, as specified by the Committee in the Award, fails to
meet performance goals established for a designated performance cycle.
Performance Awards earned by attaining performance goals are paid at the end of
a performance cycle in cash, shares of Agritope Stock, or any other form
approved by the Committee.

Other Stock-Based Awards. The Committee may grant other Awards that
involve payments or grants of shares of Agritope Stock or are measured by or in
relation to shares of Agritope Stock. The Award Plan thus provides needed
flexibility to design future types of stock-based or stock-related Awards to
attract and retain employees, Advisors, and directors in a competitive
environment.

The Board may amend or terminate the Award Plan without shareholder
approval, other than amendments that would materially increase the aggregate
number of shares of Agritope Stock that may be issued under the Award Plan
(except for adjustments for changes in capitalization).

The foregoing is a summary description of certain terms and provisions
of the Award Plan and is subject to its terms and provisions.

FEDERAL INCOME TAX CONSEQUENCES

The following discussion summarizes the principal anticipated federal
income tax consequences of Awards granted under the Award Plan to participants
and to Agritope.

Incentive Stock Options. An optionee does not realize taxable income
upon the grant or exercise of an ISO under the Award Plan.

If no disposition of shares issued to an optionee pursuant to the
exercise of an ISO is made by the optionee within two years from the date of
grant or within one year from the date of exercise, then (a) upon the sale of
the shares, any amount realized in excess of the option price (the amount paid
for the shares) is taxed to the optionee as mid-term (if the disposition is
within 18 months from the date of exercise) or long-term capital gain (if the
disposition is more than 18 months after the date of exercise) and any loss
sustained will be a mid-term or long-term capital loss, and (b) no deduction is
allowed to Agritope for federal income tax purposes. For purposes of computing
alternative minimum taxable income, an ISO is treated as a nonqualified option.

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If shares of Agritope Stock acquired upon the exercise of an ISO are
disposed of prior to the expiration of the two-year and one-year holding periods
described above (a "disqualifying disposition"), then (a) the optionee realizes
compensation taxable at ordinary income tax rates in the year of disposition in
an amount equal to the excess (if any) of the fair market value of the shares at
exercise (or, if less, the amount realized on sale of the shares) over the
exercise price thereof and (b) Agritope is entitled to deduct such amount. Any
further appreciation or reduction in value is treated as a short-term, mid-term,
or long-term capital gain or loss, as applicable, to the optionee, and does not
result in any deduction to Agritope. A disqualifying disposition in the year of
exercise will generally avoid the alternative minimum tax consequences of the
exercise of an ISO.

Nonqualified Options. No income is realized by the optionee at the time
a nonqualified option is granted. Upon exercise, (a) an optionee will generally
realize ordinary income in an amount equal to the difference between the
exercise price and the fair market value of the shares on the date of exercise
and (b) Agritope will receive a tax deduction for the same amount. The
optionee's cost basis in the acquired shares is the fair market value of the
shares on the exercise date. Upon sale of the shares thereafter, any
appreciation or reduction in value is treated as a short-term, mid-term, or
long-term capital gain or loss, as applicable, to the optionee, and will not
result in any deduction to Agritope.

Payment of Exercise Price in Shares. The Committee may permit
participants to pay all or a portion of the exercise price using previously
acquired shares of Agritope Stock. If an option is exercised and payment is made
in previously held shares, there is no taxable gain or loss to the participant
other than any gain recognized as a result of exercise of the option, as
described above.

Stock Appreciation Rights. The grant of a SAR to a participant will not
cause the recognition of income by the participant. Upon exercise of a SAR, the
participant will realize ordinary income equal to the amount of cash payable to
the participant plus the fair market value of any shares of Agritope Stock or
other property delivered to the participant. Agritope will be entitled to a
deduction equal to the amount of ordinary income realized by the participant in
connection with the exercise of a SAR.

Restricted Awards and Performance Awards. Generally, a participant will
not recognize any income upon issuance of a restricted Award or performance
Award that is subject to forfeiture during a Restriction Period or performance
cycle. Dividends paid with respect to Awards during a Restriction Period or
performance cycle prior to the vesting of the Awards will be taxable as ordinary
income to the participant. Generally, a participant will recognize ordinary
income upon the vesting of restricted Awards or performance Awards in an amount
equal to the amount of cash payable to the participant plus the fair market
value of shares of Agritope Stock or other property delivered to the
participant. However, a participant may elect to recognize compensation income
upon the grant of restricted shares, based on the fair market value of the
shares of Agritope Stock subject to the Award at the date of grant. If a
participant makes such an election, dividends paid with respect to the
restricted shares will not be treated as ordinary income, but rather as dividend
income, and the participant will not recognize additional income when the
restricted shares vest. Agritope will be entitled to a deduction equal to the
amount of ordinary income recognized by the participant. If a participant who
receives an Award of restricted shares makes the special election described
above, Agritope will not be entitled to deduct dividends paid with respect to
the restricted shares.

Limitation on Deductibility of Certain Compensation. Section 162(m) of
the Code generally makes nondeductible to Agritope taxable compensation paid to
a single individual in excess of $1 million in any calendar year if the
individual is the Chief Executive Officer or one of the next four highest-paid
executive officers, unless the excess compensation is considered to be
"performance based." Awards of options that are granted with an option price
equal to fair market value on the date of grant are considered performance based
for this purpose. Among other requirements contained in Section 162(m), the
material terms of a compensation plan must be approved by shareholders. Agritope
may in the future consider structuring other Awards to attempt to meet the
requirements of Section 162(m) if it determines the action to be advisable.

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1997 EMPLOYEE STOCK PURCHASE PLAN

GENERAL

The Agritope, Inc. 1997 Employee Stock Purchase Plan (the "Purchase
Plan") was adopted by the Agritope Board and approved by Epitope as sole
shareholder of Agritope in October 1997. The Purchase Plan provides for the
issuance of up to 250,000 shares of Agritope Stock. The Compensation Committee
of the Agritope board (the "Committee) will administer the Purchase Plan. The
following summary of the Purchase Plan is subject to the detailed terms and
provisions of the Plan.

PURPOSE

The purpose of the Purchase Plan is to give employees of Agritope the
opportunity to subscribe for shares of Agritope Stock on an installment basis
through payroll deductions.

SUBSCRIPTIONS

The Purchase Plan provides for offering and purchase periods to be set
by the Committee, but no more than three regular offering periods may be set
during each fiscal year. The number of offering periods, the number of shares
offered, and the length of each period will be set by the Committee. The
Purchase Plan also provides for special offerings as described below. Shares not
subscribed for in any offering period and shares subscribed for that cease to be
subject to a subscription agreement will be available for subscription in
connection with a later offering period established by the Committee.

The subscription price per share for each purchase period will be the
lesser of (i) 85 percent of the mean between the reported high and low sales
prices of shares of Agritope Stock on the stock exchange or automated securities
interdealer quotation system on which the stock was traded on the day before the
offering period commenced (the "initial subscription price") and (ii) the mean
between the reported high and low sales prices for the shares on the date the
purchase period ends, or on any earlier date of purchase provided for in the
Purchase Plan.

The total value of shares that may be subscribed for by an individual
in one or more regular offering periods within any calendar year is limited to
$21,250. Subject to this limitation, the Committee may set a minimum, a maximum,
or both a minimum and a maximum number of shares that may be subscribed for
during any offering period.

The Purchase Plan also provides for monthly special offering dates
pursuant to which any employee of Agritope may receive a one-year subscription
for a number of shares of Agritope Stock equal to the amount by which the
employee's annual compensation would otherwise be increased during the one-year
period following the employee's annual compensation review divided by the
initial subscription price for the special offering date that occurs on or
immediately following the effective date of the increase in compensation. The
subscription may be provided to the employee at Agritope's discretion or
pursuant to the employee's irrevocable election in lieu of any increase in cash
compensation for the ensuing year.

An employee may terminate his or her subscription at any time before
the full purchase price for the subscribed shares has been paid and be refunded
the full amount withheld, plus interest at the rate of 6 percent per year. An
employee may also reduce the number of subscribed shares and (i) receive a
refund of the amount withheld that is in excess of the amount that would have
been withheld if his or her subscription had been for the reduced number of
shares, plus interest on the refund at the rate of 6 percent per year, or (ii)
have the excess applied to reduce the amount of future installments of the
purchase price.

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<PAGE>

An employee whose employment is terminated for any reason other than
retirement, disability, or death (or the personal representative of an employee
who dies after such termination) may, at his or her election, (i) be refunded
the full amount withheld, plus interest at the rate of 6 percent per year or
(ii) receive the whole number of shares that could be purchased at the purchase
price with that amount together with a cash refund of any balance. An employee
who retires or is permanently disabled (or the personal representative of an
employee who dies while employed, retired, or disabled) at any time before the
full purchase price of the subscribed shares has been paid has the rights
described above and in addition may prepay the entire unpaid balance for the
subscribed shares in a lump sum of cash and receive the shares. Any such
election must be made within three months following any termination of
employment and prior to the end of the respective purchase period.

The Agritope Board may amend or terminate the Purchase Plan without
shareholder approval, other than amendments that materially increase the number
of shares that may be issued under the plan or decrease the purchase price of
shares under the plan (except for adjustments for changes in capitalization).

When the Purchase Plan becomes effective upon consummation of the
Distribution, approximately --- employees are expected to be eligible to
participate in the Purchase Plan. Numbers of shares that may be subject to
future individual subscriptions under the Purchase Plan are not now
determinable.

FEDERAL INCOME TAX CONSEQUENCES

The Purchase Plan is intended to qualify as an "employee stock purchase
plan" under Section 423 of the Code. Participants do not realize taxable income
at the commencement of an offering or at the time shares are purchased under the
Purchase Plan.

If no disposition of shares purchased under the Purchase Plan is made
by the participant within two years from the offering commencement date or
within one year from the purchase date, then (a) upon sale of the shares, 15
percent of the fair market value of the shares at the commencement of the
offering period (or, if less, the amount of gain realized on sale of the shares)
is taxed to the participant as ordinary income, with any additional gain taxed
as a mid-term or long-term capital gain, as applicable, and any loss sustained
treated as a mid-term or long-term capital loss, as applicable, to the
participant, and (b) no deduction is allowed to Agritope for federal income tax
purposes.

If shares purchased under the Purchase Plan are disposed of prior to
the expiration of the two-year and one-year holding periods described above,
then (a) the participant realizes ordinary income in the year of disposition in
an amount equal to the excess (if any) of the fair market value of the shares on
the date of purchase (or, if less, the amount realized on sale of the shares)
over the purchase price thereof, and (b) Agritope is entitled to deduct that
amount. Any further gain realized is taxed as a short-term, mid-term, or
long-term capital gain to the participant and will not result in any deduction
to Agritope.

EMPLOYEE STOCK OWNERSHIP PLAN

The Agritope, Inc., Employee Stock Ownership Plan ("ESOP"), which
covers Agritope and those of its affiliates which elect to participate (the
"employers"), provides that all employees (including officers), other than
excluded classes (leased, union, nonresident alien, temporary, and seasonal
employees) are eligible to participate immediately upon commencement of
employment. The ESOP is an "employee stock ownership plan" under Section
4975(e)(7) of the Internal Revenue Code, designed to invest primarily in
Agritope Stock.

The employers' contribution to the ESOP each year is determined by
Agritope, and may be made either in Agritope Stock or in cash. Contributions are
allocated to participants in proportion to their compensation.

Each participant has a separate account attributable to employer
contributions. Participants will become fully vested in their accounts if they
attain age 65, die, or become disabled prior to termination of employment; if

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termination of employment occurs before age 65, death, or disability, the
vesting in the accounts is based on the number of years of service (and the
nonvested portion is forfeited):

Years of Service Percentage Vested

Less than 2 years 0
At least 2 years, but less than 3 years 20
At least 3 years, but less than 4 years 40
At least 4 years, but less than 5 years 60
At least 5 years, but less than 6 years 80
At least 6 years 100

Each participant may direct the voting of Agritope Stock allocated to
the participant's account.

The participants' accounts are distributable at termination of
employment. Distribution must be in Agritope Stock unless both the participant
and the trustees elect cash distribution.

401(K) PROFIT SHARING PLAN

The Agritope, Inc., 401(k) Profit Sharing Plan ("401(k) Plan") which
covers Agritope and those of its affiliates which elect to participate, provides
that all employees (including officers), other than excluded classes (leased,
union, nonresident alien, temporary, and seasonal employees) are eligible to
participate immediately upon commencement of employment. The 401(k) Plan
includes a salary reduction feature under Section 401(k) of the Internal Revenue
Code.

All participants in the 401(k) Plan may contribute on a before-tax
basis a whole number percentage of their cash compensation each year up to a
maximum fixed by Agritope not to exceed 17%, subject to an annual maximum which
is adjusted for cost of living ($9,500 for 1997). However, only the first 5% of
a participant's compensation is eligible for a pro-rata matching contribution by
the employers. The aggregate amount of the annual matching contribution is
determined by Agritope.

Matching contributions are invested in Agritope Stock. Employee
contributions are pooled for investment at the direction of the employee in one
or more of the various investment funds established by Agritope, one of which
may provide for investment in Agritope Stock.

Participants are at all times fully vested in their employee
contributions. Participants will become fully vested in their matching
contributions if they attain age 65, die, or become disabled prior to
termination of employment; if termination of employment occurs before age 65,
death, or disability, the vesting of matching contributions is based on the
number of years of service (and the nonvested portion is forfeited):

Years of Service Percentage Vested

Withdrawals of employee contributions are permitted prior to
termination of employment in the case of hardship. Matching contributions and
any remaining amounts of employee contributions are distributable at

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termination of employment; matching contributions, and any employee
contributions which are invested in Agritope Stock at the participants'
election, are customarily distributed in Agritope Stock.

CERTAIN TRANSACTIONS

On November 11, 1996, the Company amended an agreement pursuant to
which it acquired its patented ethylene control technology in 1987. Dr. Ferro, a
co-inventor of the technology, relinquished all rights to future payments under
the agreement in exchange for a one-time cash payment of $590,000. The amount is
included in Agritope's consolidated balance sheet under the caption "Patents and
proprietary technology" and will be amortized over 15 years, the remaining life
of the related patent.

In November 1996, Agritope agreed to exchange $3.4 million principal
amount of Agritope 4 percent Convertible Notes Due 1997 for 250,367 shares of
Epitope Stock at a reduced exchange price of $13.50 per share. The original
terms of the notes permitted the holders to exchange them for Epitope Stock at
an exchange price of $19.53 per share. Holders exchanging their notes at the
reduced exchange price included Groupe des Assurances Nationales, the beneficial
owner of more than 5 percent of the outstanding Epitope Stock, which exchanged
$2,500,000 principal amount of notes for 185,185 shares of Epitope Stock.

American Equities has been engaged by the Company to act as placement
agent in connection with the Private Placement. Michel de Beaumont is a
co-founder and director of American Equities. Mr. de Beaumont was elected to
serve as a director of Agritope in September 1997. American Equities will
receive commissions equal to five percent of the gross proceeds of the Private
Placement. In addition, American Equities or its designees will receive warrants
to purchase an aggregate of 500,000 shares of Agritope Stock in consideration
for its services as placement agent. See "Shares Eligible for Future Sale."

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the anticipated
beneficial ownership of Agritope Stock as of the Distribution Date after giving
effect to the Private Placement and the Distribution by (a) each person who is
expected by Agritope to be the beneficial owner of more than 5 percent of
Agritope Stock outstanding after the Distribution and the Private Placement, (b)
each director of Agritope, (c) each executive officer of Agritope named in the
Summary Compensation table above and (d) the executive officers and directors of
Agritope as a group. Except in the case of subscribers in the Private Placement,
this information is based on the Epitope Stock beneficially owned by such
persons as of September 30, 1997.

Amount and Nature Percent
of Beneficial of
Name Ownership(1) Class

Greenacres Holdings - -

Groupe des Assurances Nationales - -
61 Rue Monceau
Paris 75008 France

W. Charles Armstrong - *

Michel de Beaumont

Richard K. Bestwick, Ph.D. - *

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<PAGE>

Joseph A. Bouckaert - *

Nancy L. Buc

Adolph J. Ferro, Ph.D. - -

Gilbert N. Miller - -

Roger L. Pringle - *

All directors and executive
officers as a group
(9 persons)

*Less than 1 percent

(1) Subject to community property laws where applicable, beneficial
ownership consists of sole voting and investment power except as
otherwise indicated. Information is based on Epitope's records and a
review of statements filed with the Commission under Sections 13(d) and
13(g) of the Exchange Act with respect to Epitope Stock.

(2) Does not include 17,035 shares of Epitope Stock held in the Epitope
401(k) Plan, as to which Messrs. Ferro and Miller share voting power as
trustees of the Epitope 401(k) Plan. Messrs. Ferro and Miller disclaim
any economic beneficial interest in such shares other than the -----
and ----- shares, respectively, allocated to their individual accounts
under the Epitope 401(k) Plan, which are included in the table above.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Distribution, there has not been any public market for
Agritope Stock and there can be no assurance that a significant public market
for Agritope Stock will be developed or be sustained after the Distribution.
Sales of substantial amounts of Agritope Stock in the public market after the
Distribution, or the possibility of such sales occurring, could adversely affect
prevailing market prices for Agritope Stock or the future ability of Agritope to
raise capital through an offering of equity securities.

After the Distribution and the Private Placement, ----- shares of
Agritope Stock will be outstanding. Shares distributed in the Distribution will
be freely tradeable in the public market without restriction under the
Securities Act, unless the shares are held by "affiliates" of the Company, as
that term is defined in Rule 144 under the Securities Act. See "The
Distribution--Trading of Agritope Stock." The Agritope Stock to be issued in the
Private Placement may not be sold in the U.S. without registration under the
Securities Act until 40 days following the closing of the Private Placement. See
"Private Placement" and "The Distribution--Trading of Agritope Stock."

As of the Record Date, options to purchase ---- shares of Agritope
Stock were outstanding. As of the Record Date, 2,000,000 shares were available
for future grants of awards under Agritope's Award Plan, and 250,000 shares were
available for future issuance under Agritope's Purchase Plan.

Agritope intends to file after the Distribution Date Registration
Statements on Form S-8 to register an aggregate of 2,250,000 shares of Agritope
Stock reserved for issuance under its Award Plan and Purchase Plan. The
Registration Statements will become effective automatically upon filing. Shares
issued under the foregoing plans, after the filing of the Registration
Statements on Form S-8, may be sold in the open market, subject, in the case of
certain holders, to the Rule 144 limitations applicable to affiliates and
vesting restrictions imposed by Agritope.

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Epitope has retained Vector Securities International, Inc. ("Vector
Securities") as Epitope's exclusive financial advisor. In partial consideration
for services rendered in connection with the Distribution and the Epitope
Targeted Stock Proposal as well as strategic advice, Vector Securities will
receive warrants to purchase an aggregate of 500,000 shares of Agritope Stock
and Epitope Stock, exercisable at a price equal to 110 percent of the average
closing price of the respective shares on the five trading days beginning on the
Distribution Date. The ratio of the number of Agritope Stock warrants to the
number of Epitope Stock warrants to be received by Vector Securities will be the
same as the Distribution Ratio. Epitope and Agritope expect to grant Vector
Securities certain registration rights with respect to the warrants.

Agritope has engaged American Equities to serve as placement agent in
connection with the Private Placement. American Equities or its designees will
receive warrants to purchase an aggregate of 500,000 shares of Agritope Stock at
$7 per share in partial consideration for its services. Such warrants may be
exercised at any time within the three years following the closing of the
Private Placement. Agritope has granted American Equities certain registration
rights with respect to the warrants.

DESCRIPTION OF AGRITOPE CAPITAL STOCK

Agritope's Articles authorize the issuance of up to 40 million shares
of Agritope Common and 10 million shares of Agritope Preferred issuable in
series. The following description of Agritope's capital stock is qualified in
all respects by reference to the Articles.

AGRITOPE COMMON

The holders of Agritope Common are entitled to one vote per share on
all matters on which shareholders are entitled to vote. Holders of Agritope
Common are entitled to receive dividends when and as declared by the Agritope
Board out of any funds lawfully available therefor and, in the event of
liquidation or distribution of assets, are entitled to participate ratably in
the distribution of such assets remaining after payment of liabilities, in each
case subject to any preferential rights granted to any series of Agritope
Preferred that may then be outstanding. Holders of Agritope Common do not have
cumulative voting rights with respect to any matter.

AGRITOPE PREFERRED

The Articles authorize the Agritope Board, without further shareholder
authorization, to issue Agritope Preferred in one or more series and to fix the
terms and provisions of each series, including dividend rights and preferences,
conversion rights, voting rights, redemption rights, and rights on liquidation,
including preferences over Agritope Common, all of which could adversely affect
the rights of holders of Agritope Common. The issuance of a series of Agritope
Preferred under certain circumstances could have the effect of delaying or
preventing a change of control of Agritope, could adversely affect the rights of
the holders of Agritope Common, may discourage offers for the Agritope Common at
a premium over market price and may adversely affect the market price of, and
the voting and other rights of the holders of, the Agritope Common.

The Agritope Board has adopted a Shareholder Rights Plan, as described
below, which enables holders of Agritope Common, under certain circumstances, to
purchase fractional shares of a series of Agritope Preferred. See "--Shareholder
Rights Plan," below. No Agritope Preferred is currently outstanding, and
Agritope has no present plans to issue any shares of Agritope Preferred.

AGRITOPE WARRANTS

Vector Securities has provided advisory services to Epitope with
respect to the Distribution as well as strategic and advisory services in
connection with Epitope's targeted stock proposal. In partial consideration for
services rendered in connection with the Distribution and the Epitope targeted
stock proposal, Vector Securities will

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receive warrants to purchase an aggregate of 500,000 shares of Agritope Stock
and Epitope Stock, exercisable at a price equal to 110 percent of the average
closing price of the respective shares on the five trading days beginning on the
Distribution Date. The ratio of Agritope Stock warrants to Epitope Stock
warrants to be received by Vector Securities will be the same as the
Distribution Ratio.

Agritope has also issued to American Equities or its designees warrants
to purchase an aggregate of 500,000 shares of Agritope Stock in partial
consideration for its services as placement agent in connection with the Private
Placement. Each warrant entitles the holder to purchase one share of Agritope
Stock at $7 per share at any time within three years of the closing of the
Private Placement.

PREEMPTIVE RIGHTS

The Articles provide that no holder of any of Agritope's shares is
entitled to any preferential or preemptive rights, except as such rights may be
provided for by contract or pursuant to the terms of any series of Agritope
Preferred.

SHAREHOLDER RIGHTS PLAN

In October 1997, Agritope adopted the Rights Agreement. Accordingly,
each share of Agritope Common distributed in the Distribution will be issued
with one preferred stock purchase right ("Right").

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

In the event Agritope is acquired in a merger or other business
combination transaction (including one in which Agritope is the surviving
corporation), each Right will entitle its holder to purchase, at the then
current exercise price of the Right, that number of shares of common stock of
the surviving company which at the time of such transaction would have a market
value of two times the exercise price of the Right. The Rights do not have any
voting rights and are redeemable, at the option of Agritope, at a price of $0.01
per Right at any time until 10 business days after a person acquires beneficial
ownership of at least 15 percent of the Agritope Common.

The Rights expire on October 17, 2007. So long as the Rights are not
separately transferable, Agritope will issue one Right with each new share of
Agritope Common issued.

The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire Agritope on
terms not approved by the Agritope Board. The Rights should not interfere with
any merger or other business combination approved by the Agritope Board because
the Rights may be redeemed by Agritope until the tenth business day following
the first public announcement that a person or group has become an Acquiring
Person.

- 54 -
<PAGE>

OTHER ANTI-TAKEOVER MEASURES

Agritope's Articles and Bylaws contain certain provisions that may have
the effect of delaying, deferring or preventing a change in control of Agritope.
Such provisions include requirements for: (i) a classified Board of Directors,
with each class containing as nearly as possible one-third of the total number
of directors and the members of each class serving for staggered three-year
terms; (ii) removal of directors only for cause; (iii) changing the size of the
Agritope Board only with supermajority approval of the directors then in office;
and (iv) no less than 60 days' advance notice with respect to nominations of
directors or other matters to be voted on by shareholders other than by or at
the direction of the Agritope Board.

Classified Board of Directors. The Articles provide that the Agritope
Board will be divided into three classes (Class 1, Class 2 and Class 3) with
each class containing as nearly as possible one-third of the total number of
directors and the members of each class serving for staggered three-year terms.
The initial designation of directors to each of the three classes has been made.
See "Management." At each annual meeting of Agritope shareholders, the number of
directors equal to the number of the class whose term expires at the time of
such meeting will be elected to hold office until the third succeeding annual
meeting of Agritope shareholders.

Removal of Directors. Directors of Agritope may be removed only for
cause.

Changes in the Number of Directors. The Articles specify that the
Agritope Board will consist of no less than six nor more than thirteen members,
with the exact number to be set from time to time by the Board. The Agritope
Board is authorized to increase or decrease the size of the Board (within the
specified range) by the affirmative vote of two-thirds of the directors then in
office. Without the consent of all the directors then in office: (i) no more
than two additional directors may be added to the Agritope Board within any
12-month period; and (ii) no person who is affiliated as an owner, director,
officer or employee of a company or business deemed by the Board of Directors to
be competitive with that of Agritope is eligible to serve on the Agritope Board.

Nominations of Directors and Other Matters Brought by Shareholders. The
Bylaws require that, generally, in addition to other applicable requirements, in
order for an Agritope shareholder to (i) nominate a person for election to the
Agritope Board at an annual meeting of shareholders or (ii) properly bring a
matter before an annual meeting of shareholders, such shareholder must notify
Agritope of his or her intentions not less than 60 days prior to such meeting
(with respect to the 1998 meeting of shareholders, not later than December 15,
1997). Moreover, in order to be valid, any such notice must be in proper written
form as more specifically described in the Bylaws.

Amendment of Articles. The Articles require the approval of the holders
of at least two-thirds of Agritope Common to amend certain provisions of the
Articles including certain of the anti-takeover measures described above.

OREGON ANTI-TAKEOVER STATUTES

Agritope is subject to certain provisions of the Oregon Business
Corporation Act that govern business combinations between corporations and
interested shareholders (the "Business Combination Act"). The Business
Combination Act generally provides that, if a person or entity acquires 15
percent or more of the voting stock of an Oregon corporation (an "Interested
Shareholder"), the corporation and the Interested Shareholder, or any affiliated
entity of the Interested Shareholder, may not engage in certain business
combination transactions for three years following the date the person became an
Interested Shareholder. Business combination transactions for this purpose
include: (a) a merger or plan of share exchange; (b) any sale, lease, mortgage
or other disposition of 10 percent or more of the assets of the corporation; and
(c) certain transactions that result in the issuance of capital stock to the
Interested Shareholder. These restrictions do not apply if: (i) the Interested
Shareholder, as a result of the transaction in which such person became an
Interested Shareholder, owns at least 85 percent of the outstanding voting stock
of the corporation (disregarding shares owned by directors who are also officers
and shares owned by certain employee benefit plans); (ii) the board of directors
approves the share acquisition or business

- 55 -
<PAGE>

combination before the Interested Shareholder acquires 15 percent or more of the
corporation's outstanding voting stock; or (iii) the board of directors and the
holders of at least two-thirds of the outstanding voting stock of the
corporation (disregarding shares owned by the Interested Shareholder) approve
the transaction after the Interested Shareholder acquires 15 percent or more of
the corporation's voting stock.

Agritope is also subject to the Oregon Control Share Act (the "Control
Share Act"). The Control Share Act generally provides that a person (the
"Acquiror") who acquires voting stock of an Oregon corporation in a transaction
which results in the Acquiror holding more than 20 percent, 33-1/3 percent or 50
percent of the total voting power of the corporation (a "Control Share
Acquisition") cannot vote the shares it acquires in the Control Share
Acquisition ("Control Shares") unless voting rights are accorded to the Control
Shares by: (a) a majority of each voting group entitled to vote; and (b) the
holders of a majority of the outstanding voting shares, excluding the Control
Shares held by the Acquiror and shares held by the corporation's officers and
inside directors. The term "Acquiror" is broadly defined to include persons
acting as a group.

The Acquiror may, but is not required to, submit to the corporation an
"Acquiring Person Statement" setting forth certain information about the
Acquiror and its plans with respect to the corporation. The Acquiror may also
request that the corporation call a special meeting of shareholders to determine
whether the voting rights will be restored to the Control Shares. If the
Acquiror does not request a special meeting of shareholders, the issue of voting
rights of Control Shares will be considered at the next annual or special
meeting of shareholders that is held more than 60 days after the date of the
Control Share Acquisition. If the Acquiror's Control Shares are accorded voting
rights and represent a majority or more of all voting power, shareholders who do
not vote in favor of the restoration of such voting rights will have the right
to receive the appraised "fair value" of their shares, which may not be less
than the highest price paid per share by the Acquiror for the Control Shares.

INDEMNIFICATION OF DIRECTORS AND OFFICERS; LIMITATION OF LIABILITY; INSURANCE

As permitted by Oregon law, Agritope's Articles permit, and its Bylaws
require, the indemnification of a director or officer made or threatened to be
made a party to a proceeding (other than a proceeding by or in the right of
Agritope to procure a judgment in its favor) because such person is or was a
director or officer of Agritope or one of its subsidiaries against certain
liabilities and expenses, if the director or officer acted in good faith and in
a manner he or she reasonably believed was in or not opposed to the best
interests of Agritope, and, with respect to any criminal action or proceeding,
the director or officer, in addition, had no reasonable cause to believe his or
her conduct was unlawful. In the case of any proceeding by or in the right of
Agritope, a director or officer is entitled to indemnification of certain
expenses if he or she acted in good faith and in a manner he or she reasonably
believed was in or not opposed to the best interests of Agritope.

However, pursuant to Oregon law, the Bylaws and indemnity agreements
Agritope intends to enter into with its directors and officers generally,
Agritope will not indemnify its directors and officers: (i) in connection with a
proceeding by or in the right of Agritope in which the director or officer is
adjudged liable to Agritope; (ii) in connection with any other proceeding
charging improper personal benefit to the director or officer in which the
director or officer is adjudged liable on the basis that personal benefit was
improperly received by him or her; (iii) in connection with any claim made
against any director or officer for which payment is required to be made to or
on behalf of the director or officer under any insurance policy; (iv) in
connection with any claim made against any director or officer if a court having
jurisdiction in the matter determines that indemnification is not lawful under
any applicable statute or public policy; (v) in connection with any proceeding
(or part of any proceeding) initiated by the director or officer or any
proceeding by the director or officer against Agritope or its directors,
officers, employees or other agents; and (vi) for an accounting of profits made
from the purchase and sale by the director or officer of securities of Agritope
within the meaning of Section 16(b) of the Exchange Act or similar provision of
any state statutory law or common law. Agritope may also provide indemnification
to persons other than its directors or officers under certain circumstances.

- 56 -
<PAGE>

As permitted by Oregon law, the Articles also provide that no director
will be liable to Agritope or its shareholders for monetary damages for his or
her conduct as a director, except that personal liability may exist for any: (i)
breach of the director's duty of loyalty to Agritope or its shareholders; (ii)
act or omission not in good faith or that involves intentional misconduct or a
knowing violation of the law; (iii) unlawful distribution to shareholders; (iv)
transaction from which the director derives an improper personal benefit; or (v)
profits made from the purchase and sale by the director of securities of
Agritope within the meaning of Section 16(b) of the Exchange Act or similar
provision of any state statutory law or common law.

As stated above, Agritope intends to enter into agreements to indemnify
its directors and officers. The agreements are intended to provide the maximum
indemnification permitted by Oregon law. The agreements, among other provisions,
will indemnify each of Agritope's directors and officers in any action or
proceeding for certain expenses (including attorney fees) and (other than in an
action or proceeding by or in the right of Agritope) judgments, fines and
settlement amounts incurred on account of such person's services as a director
or officer of Agritope or, at Agritope's request, as a director, officer,
employee or agent of another enterprise. The agreements will also limit the
liability of Agritope's directors and officers in respect of their conduct in
serving Agritope to the extent permitted by Oregon law, as described above.

Agritope understands that the current position of the Commission is
that any indemnification of liabilities arising under the Securities Act is
against public policy and is, therefore, unenforceable.

Agritope intends to obtain insurance insuring its directors and
officers against certain liabilities, including liabilities under federal and
state securities laws.

LEGAL MATTERS

The validity of the Agritope Stock will be passed upon by Tonkon, Torp,
Galen, Marmaduke & Booth, Portland, Oregon. Miller, Nash, Wiener, Hager &
Carlsen LLP has provided the tax opinion in connection with the Distribution.

EXPERTS

The financial statements as of September 30, 1996 and 1995 and for each
of the three years in the period ended September 30, 1996 included in this
Information Statement/Prospectus have been so included in reliance on the report
of Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

- 57 -
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS PAGE

FULL YEAR FINANCIAL STATEMENTS

Report of Independent Accountants.......................................F-1
Consolidated Balance Sheets
at September 30, 1996 and September 30, 1995....................F-2
Consolidated Statements of Operations
for the years ended September 30, 1996, 1995, and 1994 .........F-3
Consolidated Statements of Changes in Shareholder's Equity
for the years ended September 30, 1996, 1995, and 1994 .........F-4
Consolidated Statements of Cash Flows
for the years ended September 30, 1996, 1995, and 1994 .........F-5
Notes to Consolidated Financial Statements..............................F-6

INTERIM FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets
at June 30, 1997 and September 30, 1996........................F-14
Condensed Consolidated Statements of Operations
for the nine months ended June 30, 1997 and 1996...............F-15
Condensed Consolidated Statements of Changes in Shareholder's Equity
for the nine months ended June 30, 1997........................F-16
Condensed Consolidated Statements of Cash Flows
for the nine months ended June 30, 1997 and 1996...............F-17
Notes to Condensed Consolidated Financial Statements...................F-18

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Epitope, Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of changes in shareholder's equity and of
cash flows present fairly, in all material respects, the financial position of
Agritope, Inc. (as described in Note 1 to these financial statements) and its
subsidiaries at September 30, 1996 and 1995, and the results of their operations
and their cash flows for each of the three years in the period ended September
30, 1996, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

As described in Note 2, the basis of presentation of these financial statements
differs from previously issued Agritope Group financial statements in that
certain cash and cash equivalents and the related interest income that were
previously allocated to Agritope have not been allocated to Agritope in these
financial statements.

PRICE WATERHOUSE LLP

Portland, Oregon
October 28, 1996, except for Note 11 as to which the date is December 26, 1996
and the second paragraph of Note 1 as to which the date is July 26, 1997.

F-1

<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
SEPTEMBER 30 1996 1995

ASSETS
Current assets
<S> <C> <C>
Cash and cash equivalents (Note 2) ........................... $ 476,512 $ 10,103
Trade accounts receivable, net (Note 2) ...................... 264,986 135,866
Other accounts receivable .................................... 32,337 993,790
Inventories (Note 2) ......................................... 509,745 -
Prepaid expenses ............................................. 812 56,064
------------- -------------
Total current assets ......................................... 1,284,392 1,195,823

Property and equipment, net (Notes 2 and 4) .................. 1,286,197 555,004
Patents and proprietary technology, net (Note 2) ............. 510,244 140,757
Investment in affiliated companies (Note 3) .................. 2,448,623 1,974,833
Other assets and deposits (Note 5) ........................... 140,513 200,430
------------- -------------
$ 5,669,969 $ 4,066,847

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Current portion of installment notes payable ................. $ - $ 17,758
Convertible notes (Notes 5 and 11)............................ 3,620,003 -
Accounts payable.............................................. 91,474 125,971
Salaries, benefits and other accrued liabilities.............. 735,478 206,349
------------- ------------
Total current liabilities..................................... 4,446,955 350,078

Long-term portion of installment notes payable................ - 21,749
Convertible notes (Notes 5 and 11)............................ - 3,620,003
Minority interest (Note 3).................................... 215,407 -

Commitments and contingencies (Note 9)........................ - -

Shareholder's equity (Note 6)
Preferred stock, no par value
1,000,000 shares authorized;
no shares issued and outstanding............................ - -
Common stock, no par value
20,000,000 shares authorized;
2,000,000 shares issued and outstanding..................... 33,485,214 30,051,356
Accumulated deficit .......................................... (32,477,607) (29,976,339)
------------- -------------
1,007,607 75,017

$ 5,669,969 $ 4,066,847
</TABLE>

The accompanying notes are an integral part of these statements.

F-2

<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30 1996 1995 1994

Revenues
<S> <C> <C> <C>
Product sales.............................................. $ - $ 2,015,318 $ 2,179,742
Grants and contracts (Note 8).............................. 585,485 94,370 33,642
------------- ------------ --------------
585,485 2,109,688 2,213,384

Costs and expenses
Product costs............................................. - 3,235,675 4,575,149

Research and development costs (Note 8)................... 1,338,703 2,204,993 2,368,880
Selling, general and administrative expenses
(Note 2)................................................ 1,482,694 4,479,498 4,759,219
------------- ------------ --------------
2,821,397 9,920,166 11,703,248

Loss from operations...................................... (2,235,912) (7,810,478) (9,489,864)

Other income (expense), net
Interest income........................................... - 7,535 -
Interest expense.......................................... (265,356) (241,775) (236,121)
Other, net................................................ - (500) (78,081)
------------- ------------- ---------------
(265,356) (234,740) (314,202)

Net loss................................................... $ (2,501,268) $ (8,045,218) $ (9,804,066)

Net loss per share ....................................... $ (1.25) $ (4.02) $ (4.90)

Weighted average number
of shares outstanding .................................. 2,000,000 2,000,000 2,000,000
</TABLE>

The accompanying notes are an integral part of these statements.

F-3

<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
COMMON ACCUMULATED
STOCK DEFICIT TOTAL

<S> <C> <C> <C>
Balances at September 30, 1993 .............................. $ 9,143,694 $ (12,127,055) $ (2,983,361)
Compensation expense for stock awards (Note 6)............... 50,392 - 50,392
Compensation expense for stock option grants (Note 6)........ 343,922 - 343,922
Capital contributed by Epitope, Inc., upon exchange of
convertible notes (Note 5) ................................ 559,964 - 559,964
Equity issuance costs ....................................... (40,267) - (40,267)
Cash from Epitope, Inc. ..................................... 11,391,436 - 11,391,436
Net loss for the year ....................................... - (9,804,066) (9,804,066)
------------ -------------- --------------
Balances at September 30, 1994 .............................. 21,449,141 (21,931,121) (481,980)

Compensation expense for stock awards (Note 6)............... 69,998 - 69,998
Compensation expense for stock option grants (Note 6)........ 318,375 - 318,375
Capital contributed by Epitope, Inc., upon exchange of
convertible notes (Note 5) ................................ 449,991 - 449,991
Equity issuance costs ....................................... (22,487) - (22,487)
Cash from Epitope, Inc. ..................................... 7,786,338 - 7,786,338
Net loss for the year ....................................... - (8,045,218) (8,045,218)
------------ ------------ -----------
Balances at September 30, 1995 .............................. 30,051,356 (29,976,339) 75,017

Compensation expense for stock awards (Note 6)............... 14,500 - 14,500
Compensation expense for stock option grants (Note 6) ....... 229,164 - 229,164
Cash from Epitope, Inc. ..................................... 3,190,194 - 3,190,194
Net loss for the year ....................................... - (2,501,268) (2,501,268)
------------ ------------ ------------
Balances at September 30, 1996 .............................. $ 33,485,214 $ (32,477,607) $ 1,007,607
</TABLE>

The accompanying notes are an integral part of these statements.

F-4

<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30 1996 1995 1994

CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss................................................... $ (2,501,268) $ (8,045,218) $ (9,804,066)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization.............................. 294,045 663,379 505,135
Compensation expense for stock awards...................... 14,500 69,998 50,392
Compensation expense for stock option grants .............. 229,164 318,375 343,922
Loss on disposition of property............................ - 500 74,130
Decrease (increase) in receivables......................... 832,333 (945,501) (140,268)
Decrease (increase) in inventories......................... (509,745) 88,737 (385,928)
Decrease (increase) in prepaid expenses.................... 55,252 (55,639) 36,965
Decrease (increase) in other assets and deposits........... (36,219) 9,137 6,562
Increase (decrease) in accounts payable and
accrued liabilities...................................... 494,633 (104,680) 67,457
-------------- -------------- --------------
Net cash used in operating activities...................... (1,127,305) (8,000,912) (9,245,699)

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment........................ (886,646) (238,558) (2,128,837)
Proceeds from sale of property............................. - 13,258 -
Expenditures for patents and proprietary
technology............................................... (411,943) (178,208) 135
Investment in affiliated companies......................... (473,790) 610,146 -
Minority interest in affiliated companies.................. 215,407 - -
-------------- -------------- --------------
Net cash (used in) provided by investing activities........ (1,556,972) 206,638 (2,128,702)

CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under installment purchase notes
and capital lease obligations ............................ (39,508) (16,137) (20,724)
Cash from Epitope, Inc..................................... 3,190,194 7,786,338 11,391,436
-------------- -------------- --------------
Net cash provided by financing activities.................. 3,150,686 7,770,201 11,370,712

Net increase in cash and cash equivalents.................. 466,409 (24,073) (3,689)
Cash and cash equivalents at beginning of year............. 10,103 34,176 37,865
-------------- -------------- --------------
Cash and cash equivalents at end of year................... $ 476,512 $ 10,103 $ 34,176
</TABLE>

The accompanying notes are an integral part of these statements.

F-5

<PAGE>

AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 THE COMPANY

Agritope, Inc. (the "Company" or "Agritope") is an Oregon corporation utilizing
biotechnology to develop and market superior new plants and related products.
Agritope is a wholly owned subsidiary of Epitope, Inc. ("Epitope"), an Oregon
corporation engaged in the development and marketing of medical diagnostic
products. Through its subsidiary, Vinifera, Inc. ("Vinifera"), Agritope is also
engaged in the business of propagation, growing, and distribution of grapevine
plants. Agrimax Floral Products, Inc. ("Agrimax") is an inactive subsidiary that
holds minority interests in two flower distribution businesses. See Note 3,
Investment in Affiliated Companies.

Agritope Spin-off. In July 1997, Epitope's board of directors approved a
management proposal to spin off Agritope, subject to obtaining financing for
Agritope and the satisfaction of certain other conditions. Agritope intends to
sell additional shares of Agritope common stock in a private placement to
certain investors immediately after the spin-off.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

The basis of presentation of these financial statements differs from the
previously issued Agritope Group financial statements contained in Epitope's
Form 10-K and Form 10-Q filings. In the previously issued financial statements,
cash and cash equivalents and the related interest income were allocated to
Agritope in connection with the contemplated targeted stock transaction. With
respect to the spin-off, these items will not be transferred to Agritope and
therefore have not been allocated to Agritope in these financial statements.

Certain corporate overhead services such as accounting, annual meeting costs,
annual report preparation, audit, executive management, facilities, finance,
general management, human resources, information systems, investor relations,
legal services, payroll and SEC filings are provided by Epitope on a centralized
basis for the benefit of Agritope ("Shared Services"). Such expenses have been
allocated to Agritope in the accompanying financial statements using activity
indicators which, in the opinion of management, represent a reasonable measure
of Agritope's utilization of such Shared Services. These activity indicators,
which are reviewed periodically and adjusted to reflect changes in utilization,
include number of employees, number of computers, and level of expenditures.
Management believes that the amount allocated for these shared services is not
materially different from the amount which would be incurred by Agritope for
such services provided on a stand alone basis. Allocated Shared Services of
$1,069,249, $1,892,370 and $1,735,688, respectively, for 1996, 1995 and 1994 are
included under the caption "Selling, general and administrative expenses."

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

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

SEPTEMBER 30 1996
Work-in-process .............................................. $471,208
Finished goods ............................................... 38,537
---------
$509,745

F-6
<PAGE>

Agritope, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, Continued

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

Accounting for Long-Lived Assets. The Company reviews its long-lived assets for
impairment periodically or as events or circumstances indicate that the carrying
amount of long-lived assets may not be recoverable. If the estimated net cash
flows are less than the carrying amount of the long-lived assets, the Company
recognizes an impairment loss in an amount necessary to write down long-lived
assets to fair value as determined from expected discounted future cash flows.
This accounting policy is consistent with Statement of Financial Accounting
Standards ("SFAS") No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of. See Note 11, Subsequent Events.

Patents and Proprietary Technology. Direct costs associated with patent
submissions and acquired technology are capitalized and amortized over their
minimum estimated economic useful lives, generally five years.

In August 1996, the Company amended an agreement pursuant to which it acquired
its patented ethylene control technology in 1987. A co-inventor of the
technology relinquished all rights to future compensation under the agreement in
exchange for a one-time cash payment, a research grant and a limited
non-exclusive license to use the technology for one crop. The total
consideration paid of $365,000 is included under the caption "Patents and
proprietary technology" and is being amortized over 15 years, the remaining life
of the related patent. See Note 11, Subsequent Events.

Amortization and accumulated amortization are summarized as follows:

1996 1995 1994
Amortization for the year ended September 30,.... $ 42,456 $ 23,964 $ 13,487
Accumulated amortization ........................ 79,907 37,451 13,487

Fair Value of Financial Instruments. The carrying amounts for cash equivalents,
accounts receivable, and accounts payable approximate fair value because of the
immediate or short-term maturity of these financial instruments. The carrying
amount for long-term debt and convertible notes approximates fair value because
the related interest rates are comparable to rates currently available to the
Company for debt with similar terms and maturities.

Revenue Recognition. Product sales are recognized when the related products are
shipped. Grant and contract revenues include funds received under research and
development agreements with various entities. These grants and contracts
generally provide for progress payments as expenses are incurred and certain
research milestones are achieved. Revenue related to such grants and contracts
is recognized as research milestones are achieved. Accounts receivable are
stated net of an allowance for doubtful accounts of $19,571 as of September 30,
1996, and $65,172 as of September 30, 1995.

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

Income taxes. The Company accounts for certain revenue and expense items
differently for income tax purposes than for financial reporting purposes. These
differences arise principally from methods used in accounting for stock options
and

F-7
<PAGE>

Agritope, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, Continued

depreciation rates. Deferred tax assets and liabilities are recognized based on
temporary differences between the financial statement and the tax bases of
assets and liabilities using enacted tax rates in effect for the year in which
the temporary differences are expected to reverse.

Stock-based Compensation. In October 1995, the Financial Accounting Standards
Board issued SFAS No. 123, Accounting for Stock-Based Compensation. SFAS 123
allows companies which have stock-based compensation arrangements with employees
to adopt a fair-value basis of accounting for stock options and other equity
instruments or to continue to apply the existing accounting rules under
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, but with additional financial statement disclosure. The Company plans
to elect the disclosure-only alternative commencing in fiscal 1997 and therefore
does not anticipate that SFAS 123 will have a material impact on its financial
position or results of operations.

Supplemental Cash Flow Information. Non-cash financing and investing activities
not included in the consolidated statements of cash flows are summarized as
follows:

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30 1996 1995 1994

<S> <C> <C> <C>
Conversion of notes to equity (Note 5).................... $ - $ 472,478 $ 600,231
Investment in affiliated companies........................ - 2,584,979 -
</TABLE>

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

NOTE 3 INVESTMENT IN AFFILIATED COMPANIES

In May 1995, Agritope's wholly owned subsidiary, Agrimax, ceased operations as
an independent entity. Agrimax had been engaged in the fresh flower packaging
and distribution business. Also in May 1995, the Company surrendered control of
its Charlotte facility and contributed inventory and operating supplies to a
limited liability company (LLC) 60 percent owned by Universal American Flowers,
Inc. (UAF) and 40 percent owned by the Company pursuant to an Operating and
Transition Agreement (Agreement). Pursuant to the Agreement, on October 27,
1995, the assets and liabilities of LLC and of UAF, together with the Company's
equipment and leasehold improvements located at the Charlotte facility, were
transferred to a newly formed entity, UAF, Limited Partnership (LP). LP also
assumed the liability for the lease of the Charlotte facility. In fiscal 1995,
the Company removed the assets transferred to LP from its books and recorded the
cost of such assets as "Investment in affiliated companies", less a charge of
$500,000, representing the Company's share in the losses of LLC during the
intervening period in which a 40 percent interest was held, and estimated costs
to discontinue the business. Until May 1995, the Company's investment in Agrimax
was consolidated. From May 1995 through October 27, 1995, the Company followed
the equity method in accordance with APB 18. Since October 27, 1995, the
investment has been accounted for under the cost method in accordance with APB
18. In 1996, the equity interest of Agrimax in UAF was reduced to 9 percent as
the result of a recapitalization of UAF.
See Note 11, Subsequent Events.

In 1996, Agrimax contributed the operating assets of its discontinued St. Paul,
Minnesota operations to Petals USA, Inc. ("Petals"), an unrelated company, in
exchange for a 19.5 percent equity interest in Petals. No gain or loss was
recognized on the transaction with Petals and the investment in Petals was
recorded at the net book value of the contributed assets.
See Note 11, Subsequent Events.

F-8
<PAGE>

Agritope, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, Continued

<TABLE>
<CAPTION>
SEPTEMBER 30 1996 1995

<S> <C> <C>
Investment in UAF............................................. $1,847,148 $1,821,602
Investment in Petals.......................................... 410,932 -
Net assets of St. Paul facility............................... - 348,231
Other......................................................... 190,543 -
Valuation adjustment.......................................... - (195,000)
------------- -------------

Investment in affiliated companies............................ $2,448,623 $1,974,833
</TABLE>

For the years ended September 30, 1995, and 1994, respectively, the accompanying
financial statements include revenues of $1,914,000 and $2,148,000, and
operating losses of $3,299,000 and $5,601,000, attributable to Agrimax. The
accompanying statement of operations for the year ended September 30, 1995
includes the results of operations of Agrimax through May 1995 and also includes
a charge of $500,000 to selling, general and administrative expenses
attributable to the disposition of Agrimax's business.

In June 1995, Agritope agreed to sell its wholly owned grapevine plant
propagation subsidiary, Vinifera, to VF Holdings, Inc. ("VF"), an affiliate of a
Swiss investment group, pursuant to a stock purchase agreement. VF subsequently
failed to make all the payments required under the VF Agreement. As part of a
settlement of claims based on VF's default, VF retained a 4 percent minority
interest in Vinifera and relinquished the majority interest to Agritope in
August 1996. Additional minority investors in Vinifera reduced Agritope's
ownership to 76 percent as of September 30, 1996.

The reacquisition of Vinifera in August 1996 has been accounted for under the
purchase method. The net purchase price of $916,000 has been allocated to
tangible net assets. Vinifera's results of operations are included in the
consolidated statements of operations in 1994 and through May of 1995, and for
the month of September 1996. The following summarized, unaudited pro forma
results of operations are presented as if the reacquisition had occurred on the
first day of each period shown.

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
1996 1995
Pro forma Pro forma
Historical adjustments Pro forma Historical adjustments Pro forma

<S> <C> <C> <C> <C> <C> <C>
Revenues............... $ 585,485 $ 833,949 $ 1,419,434 $ 2,109,688 $ 276,588 $ 2,386,276
Net loss............... (2,501,268) (1,464,002) (3,965,270) (8,045,218) (460,296) (8,505,514)
Pro forma net
loss per share ...... (1.25) (.73) (1.98) (4.02) (.23) (4.25)
</TABLE>

F-9
<PAGE>

Agritope, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, Continued

NOTE 4 PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30 1996 1995

<S> <C> <C>
Land ......................................................... $ 30,020 $ 30,020
Grapevine propagation blocks ................................. 313,463 -
Production equipment.......................................... 38,075 -
Buildings and improvements ................................... 717,508 717,508
Research and development laboratory equipment ................ 220,919 196,255
Office furniture and equipment ............................... 140,452 95,338
Leasehold improvements........................................ 23,962 23,962
Construction in progress ..................................... 499,980 34,650
----------- -----------
1,984,379 1,097,733
Less accumulated depreciation and amortization ............... (698,183) (542,730)
------------ ------------
$ 1,286,196 $ 555,003
</TABLE>

NOTE 5 LONG-TERM DEBT

On June 30, 1992, Agritope completed a private placement with several European
institutional investors pursuant to which $5,495,000 of convertible notes were
issued. The notes are unsecured, mature on June 30, 1997 and bear interest at
the rate of 4 percent per annum which is payable on each June 30 and December
31. The notes are convertible into common stock of Epitope at a conversion price
of $19.53 per share.

During the years ended September 30, 1995 and 1994, respectively, investors
exchanged $449,991 and $559,964 principal amount of convertible notes for
Epitope common stock at a price of $19.53 per share. Following these
conversions, Epitope made a capital contribution to Agritope equal to the amount
of Epitope stock issued. In conjunction with the exchanges, unamortized debt
issuance costs of $22,487 and $40,267 related to such notes were recognized as
equity issuance costs during 1995 and 1994, respectively. Debt issuance costs
are included in other assets and are being amortized over the five-year life of
the notes. Amortization expense of debt issuance costs for the years ended
September 30, 1996, 1995 and 1994, respectively, totaled $108,257, $96,136 and
$91,715, leaving an unamortized balance of $88,821 and $197,077 at September 30,
1996 and 1995, respectively. See Note 11, Subsequent Events.

NOTE 6 SHAREHOLDER'S EQUITY

Authorized Capital Stock. Agritope's current amended articles of incorporation
authorize 1,000,000 shares of preferred stock and 20,000,000 shares of common
stock. The Company's board of directors has authority to determine preferences,
limitations and relative rights of the preferred stock.

Common Stock. Cash, cash equivalents, and marketable securities provided and
allocated to Agritope by Epitope have been reflected in common stock. Also
reflected in common stock are certain transactions in Epitope common stock. The
exchange of shares of Epitope common stock for Agritope convertible debt and the
related write-off of debt issuance costs have been reflected as Agritope common
stock.

As employees of a wholly owned subsidiary of Epitope, the employees of Agritope
and its subsidiaries have participated in stock award, employee stock purchase
and other benefit plans of Epitope. Compensation expense recognized for

F-10
<PAGE>

Agritope, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, Continued

Epitope stock grants and awards to Agritope employees totaling $244,000 in 1996,
$388,000 in 1995, and $394,000 in 1994, has been recognized as operating
expenses and common stock of Agritope.

NOTE 7 INCOME TAXES

As of September 30, 1996, Agritope had net operating loss carryforwards of
approximately $29.8 million and $16.9 million, respectively, to offset federal
and Oregon state taxable income. These net operating loss carryforwards will
expire if not used by Agritope, as follows:

<TABLE>
<CAPTION>
YEAR OF EXPIRATION FEDERAL OREGON

Significant components of Agritope's deferred tax asset were as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30 1996 1995

<S> <C> <C>
Net operating loss carryforwards.......................... $ 11,588,000 $ 10,725,000
Deferred compensation..................................... 558,000 468,000
Research and experimentation credit carryforwards......... 339,000 331,000
Accrued expenses.......................................... 15,000 14,000
Other..................................................... 59,000 35,000
-------------- -------------
Gross deferred tax assets................................. 12,559,000 11,573,000
Valuation allowance....................................... (12,559,000) (11,573,000)
-------------- -------------
Net deferred tax asset.................................... $ - $ -
</TABLE>

No benefit for Agritope's deferred tax assets has been recognized in the
accompanying financial statements as they do not satisfy the recognition
criteria set forth in SFAS 109. The valuation allowance increased by $986,000 in
1996. The research and experimentation tax credit carryforwards will generally
expire from 2004 through 2011 if not used by Agritope. Net operating loss and
tax credit carryforwards incurred by Agritope through the date of the spin-off
(see Note 1, The Company--Agritope Spin-off) will continue as carryforwards of
Agritope after the date of distribution. The issuance of common stock in future
years may result in a change of ownership under federal tax rules and
regulations. Upon occurrence of such a change in ownership, utilization of
existing tax loss and tax credit carryforwards would be subject to cumulative
annual limitations.

The expected federal statutory tax benefit of $850,000 for the year ended
September 30, 1996 is increased by approximately $109,000 for the effect of
state and local taxes (net of federal impact), and decreased by approximately
$986,000 for the effect of the increase in valuation allowance.

F-11
<PAGE>

Agritope, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, Continued

NOTE 8 RESEARCH AND DEVELOPMENT ARRANGEMENTS

Agritope performed research work in 1996 and 1995 with respect to raspberries
which was partially funded by Sweetbriar Development, Inc. under a License
Agreement dated October 18, 1994 and with respect to grapevine disease
diagnostics funded by a grant from the U.S. Department of Agriculture under the
Small Business Innovation Research Program. Agritope has also received grant
support from the U.S. Department of Agriculture, Oregon Strawberry Commission,
and Oregon Raspberry & Blackberry Commission for antifungal biocontrol research
and from several strategic partners.

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

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30 1996 1995 1994

<S> <C> <C> <C>
Government research grants................................ $ 144,987 $ 16,358 $ 33,642
Research projects with strategic partners................. 326,462 40,000 -
Other..................................................... 114,036 38,012 -
------------ ----------- ---------
585,485 94,370 33,642

Project related expenses.................................. $ 461,460 $ 318,401 $ 35,728
</TABLE>

NOTE 9 COMMITMENTS AND CONTINGENCIES

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

YEAR ENDING SEPTEMBER 30

1997...................................................... $ 189,551
1998 ..................................................... 185,394
1999 ..................................................... 150,000
2000 ..................................................... 150,000
2001 ..................................................... 50,000
----------
$ 724,945

Agritope also occupies office, greenhouse, and laboratory facilities which are
leased by Epitope. The occupancy costs associated with these facilities are
allocated to Agritope on the basis of square footage utilized. Rent expense
incurred by Agritope, including amounts allocated by Epitope, aggregated
$238,790, $374,862, and $311,623 for the years ended September 30, 1996, 1995
and 1994, respectively.

Agritope is also contingently liable for a lease which has been assigned to UAF
and the lease of property which has been subleased to Petals in the following
amounts:

YEAR ENDING SEPTEMBER 30

1997...................................................... $ 328,953
1998...................................................... 341,304
1999...................................................... 347,184
------------
$ 1,017,441

F-12

<PAGE>

Agritope, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, Continued

NOTE 10 PROFIT SHARING AND SAVINGS PLAN

Epitope established a profit sharing and deferred salary savings plan in 1986
and restated the plan in 1991. All Agritope employees are eligible to
participate in the plan. In addition, the plan permits certain voluntary
employee contributions to be excluded from the employees' current taxable income
under the provisions of Internal Revenue Code Section 401(k) and the regulations
thereunder. Effective October 1, 1991, Epitope replaced a discretionary profit
sharing provision with a matching contribution (either in cash, shares of
Epitope common stock, or partly in both forms) equal to 50 percent of an
employee's basic contribution, not to exceed 2.5 percent of an employee's
compensation. The board of directors of Epitope has the authority to increase or
decrease the 50 percent match at any time. During 1996, 1995 and 1994,
respectively, Agritope was charged $14,500, $29,877, and $25,506 by Epitope for
its share of the matching contribution under the plan.

NOTE 11 SUBSEQUENT EVENTS

On October 25, 1996, Epitope received an offer from a representative of the
holders of the $3.6 million convertible notes due June 30, 1997, whereby the
holders proposed to convert such notes into common stock of Epitope at a reduced
exchange price. On November 14, 1996, Epitope agreed to exchange $3.4 million
principal amount of Agritope notes for 250,367 shares of Epitope common stock at
an exchange price of $13.50 per share. Accordingly, Agritope recognized a charge
to results of operations of $1.2 million in the first quarter of fiscal 1997
representing the conversion expense. Concurrent with the note conversion,
Epitope made a $4.4 million capital contribution to Agritope.

On November 11, 1996, the Company amended an agreement pursuant to which it
acquired its patented ethylene control technology in 1987. A co-inventor of the
technology who is an officer of the Company relinquished all rights to future
payments under the agreement in exchange for a one-time cash payment of
$590,000. The amount will be included in Agritope's consolidated balance sheet
under the caption "Patents and proprietary technology" and will be amortized
over 15 years, the remaining life of the related patent.

Based on information available on December 26, 1996, and due to continued
operating losses at UAF in the four months ended October 31, 1996, coupled with
a shortfall in sales and larger operating loss than expected at Petals in the
fourth quarter of calendar 1996, the Company believes that the value of its
investment in affiliated companies has more than temporarily declined as both
companies are now expected to show operating losses in fiscal 1997. Accordingly,
Agritope recorded a non-cash charge to results of operations of $1.9 million
during the first quarter of fiscal 1997, reflecting the permanent impairment in
the value of its investment in affiliated companies, and reducing the carrying
value of the assets to management's estimate of the net realizable value.

F-13

<PAGE>

INTERIM FINANCIAL STATEMENTS
AGRITOPE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
6/30/97 9/30/96
(Unaudited)

ASSETS
Current assets
<S> <C> <C>
Cash and cash equivalents (Note 2)............................ $ 844,567 $ 476,512
Trade accounts receivable, net................................ 185,447 264,986
Other receivables............................................. 2,817 32,337
Inventories (Note 2).......................................... 1,987,506 509,745
Prepaid expenses.............................................. 23,913 812
----------- ----------
3,044,250 1,284,392

Property and equipment, net................................... 2,403,908 1,286,197
Patents and proprietary technology, net....................... 1,293,369 510,244
Investment in affiliated companies (Note 3)................... 358,080 2,448,623
Other assets and deposits..................................... 29,950 140,513
---------- ----------
$ 7,129,557 $ 5,669,969

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Accounts payable.............................................. $ 237,079 $ 91,474
Current portion of installment notes payable.................. 4,186 -
Convertible notes (Note 4).................................... - 3,620,003
Salaries, benefits and other accrued liabilities.............. 987,776 735,478
---------- ----------
1,229,041 4,446,955

Long-term portion of installment notes payable................ 15,682 -
Minority interest in consolidated subsidiaries (Note 5)....... 769,799 215,407

Commitments and contingencies................................. - -

Shareholder's equity (Note 2)
Preferred stock, no par value
1,000,000 shares authorized;
no shares issued and outstanding............................ - -
Common stock, no par value
20,000,000 shares authorized;
2,000,000 shares issued and outstanding..................... 44,047,742 33,485,214
Accumulated deficit........................................... (38,932,707) (32,477,607)
------------ ------------
5,115,035 1,007,607

$ 7,129,557 $ 5,669,969
</TABLE>

F-14

<PAGE>

INTERIM FINANCIAL STATEMENTS
AGRITOPE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
6/30/97 6/30/96

Revenues
<S> <C> <C>
Product sales.......................................................... $ 566,239 $ -
Grants and contracts................................................... 101,507 514,030
-------------- --------------
667,746 514,030
Costs and expenses
Product costs.......................................................... 548,343 -
Research and development costs......................................... 1,250,390 990,673
Selling, general and administrative expenses........................... 2,264,043 1,064,398
-------------- --------------
4,062,776 2,055,071

Loss from operations................................................... (3,395,030) (1,541,041)

Other income (expense), net
Interest expense....................................................... (25,010) (192,103)
Valuation loss (Note 3)................................................ (1,900,000) -
Cost of debt conversion (Note 4)....................................... (1,216,654) -
Other, net............................................................. 81,594 -
-------------- --------------
(3,060,070) (192,103)

Net loss............................................................... $ (6,455,100) $ (1,733,144)

Net loss per share .................................................... $ (3.22) $ (.86)

Weighted average number of shares outstanding ........................ 2,000,000 2,000,000
</TABLE>

F-15

<PAGE>

INTERIM FINANCIAL STATEMENTS
AGRITOPE, INC. AND SUBSIDIARIES
CONDENSED COMBINED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY (UNAUDITED)

<TABLE>
<CAPTION>
COMMON ACCUMULATED
STOCK DEFICIT TOTAL

<S> <C> <C> <C>
Balances at September 30, 1996............................... $ 33,485,214 $ (32,477,607) $ 1,007,607
Compensation expense for stock awards........................ 23,437 - 23,437
Compensation expense for stock option grants................. 20,832 - 20,832
Capital contributed by Epitope, Inc. upon exchange of
convertible notes (Note 4)................................ 4,442,875 - 4,442,875
Minority interest investment
in subsidiary (Note 5).................................... 742,752 - 742,752
Cash from Epitope, Inc....................................... 5,332,632 - 5,332,632
Net loss for the period...................................... - (6,455,100) (6,455,100)
------------- ------------- --------------
Balances at June 30, 1997.................................... $ 44,047,742 $ (38,932,707) $ 5,115,035
</TABLE>

F-16

<PAGE>

INTERIM FINANCIAL STATEMENTS
AGRITOPE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
6/30/97 6/30/96
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net loss............................................................... $ (6,455,100) $ (1,733,144)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization.......................................... 383,302 188,885
Common stock issued as compensation for services....................... 23,437 4,029
Compensation expense for stock option grants........................... 20,832 171,873
Minority interest in subsidiary operating results...................... (208,310) -
Valuation loss......................................................... 1,900,000 -
Non-cash portion of cost of debt conversion............................ 1,149,054 -
Decrease (increase) in receivables..................................... 109,059 (82,338)
Increase in inventories................................................ (1,477,761) -
Decrease (increase) in prepaid expenses................................ (23,101) 55,284
Increase (decrease) in accounts payable and accrued liabilities........ 397,903 (203,821)
Other, net............................................................. 121,234 4,972
------------- -------------
Net cash used in operating activities.................................. (4,059,451) (1,594,260)

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment.................................... (1,471,276) (40,114)
Expenditures for patents and proprietary technology.................... (853,718) (459)
Investment in affiliated companies..................................... - (327,550)
------------- -------------
Net cash used in investing activities.................................. (2,324,994) (368,123)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt............................................. 20,887 -
Principal payments on long-term debt................................... (241,019) (39,507)
Minority interest investment in subsidiary............................. 1,640,000 -
Cash from Epitope, Inc................................................. 5,332,632 1,991,787
------------- -------------
Net cash provided by financing activities.............................. 6,752,500 1,952,280

Net increase (decrease) in cash and cash equivalents................... 368,055 (10,103)
Cash and cash equivalents at beginning of period....................... 476,512 10,103
------------- -------------
Cash and cash equivalents at end of period............................. $ 844,567 $ -
</TABLE>

F-17
<PAGE>

INTERIM FINANCIAL STATEMENTS
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 THE COMPANY

Agritope, Inc. (the "Company" or "Agritope") is an Oregon corporation utilizing
biotechnology to develop and market superior new plants and related products.
Through its 61 percent owned subsidiary, Vinifera, Inc. ("Vinifera"), Agritope
is also engaged in the business of propagation, growing, and distribution of
grapevine plants. Agritope is a wholly owned subsidiary of Epitope, Inc.
("Epitope"), an Oregon corporation engaged in the development and marketing of
medical diagnostic products.

The interim condensed financial statements included herein are unaudited;
however, in the opinion of management, the interim data include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position and results of operations for the interim
periods. These condensed financial statements should be read in conjunction with
the full year financial statements and notes thereto included elsewhere in this
Information Statement/Prospectus. Results of operations for the nine-month
period ended June 30, 1997 are not necessarily indicative of the results of
operations expected for the full fiscal year.

Agritope Spin-off. In July 1997, Epitope's board of directors approved a
management proposal to spin off Agritope, subject to obtaining financing for
Agritope and the satisfaction of certain other conditions. Agritope has agreed
to sell approximately 1,343,000 shares of Agritope common stock in a private
placement to certain investors for an aggregate price of $9.4 million,
immediately after the spin-off.

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

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation. The accompanying consolidated financial statements of
Agritope include the assets, liabilities, revenues and expenses of Agritope and
its majority owned subsidiaries. All significant intercompany transactions and
balances have been eliminated.

Inventories. Inventories consisted principally of growing grapevine plants at
Vinifera. The components of inventory are summarized as follows:

6/30/97 9/30/96
(Unaudited)

Work-in-process........................ $ 1,321,299 $ 471,208
Finished goods......................... 666,207 38,537
------------ -----------
$ 1,987,506 $ 509,745

Net Loss Per Share. In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128, Earnings Per Share
("SFAS 128"). This new standard is effective for interim and annual periods
ending after December 15, 1997. SFAS 128 will require the reporting of "basic"
and "diluted" earnings per share ("EPS") instead of "primary" and "fully
diluted" EPS as required under current accounting principles. Basic EPS
eliminates the common stock equivalents considered in calculating primary EPS.
Diluted EPS is similar to fully diluted EPS. Since Agritope had no common stock
equivalents during the periods presented, basic EPS would have been the same as
primary EPS.

F-18

<PAGE>

Interim Financial Statements
Agritope, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

NOTE 3 INVESTMENT IN AFFILIATED COMPANIES

Agritope's investment in affiliated companies includes its 9 percent interest in
UAF, Limited Partnership, a fresh flower distribution operation in Charlotte,
North Carolina, and its 19.5 percent interest in Petals USA, Inc. ("Petals"), an
affiliate of a Canadian fresh flower wholesaler. Based on information available
on December 26, 1996, and due to continued operating losses at UAF in the four
months ended October 31, 1996, coupled with a shortfall in sales and larger
operating loss than expected at Petals in the fourth quarter of calendar 1996,
the Company believes that the value of its investment in affiliated companies
has more than temporarily declined as both companies are now expected to show
operating losses in fiscal 1997. Accordingly, Agritope recorded a non-cash
charge to results of operations of $1.9 million during the first quarter of
fiscal 1997, reflecting the permanent impairment in the value of its investment
in affiliated companies, and reducing the carrying value of the assets to
management's estimate of the net realizable value. See Note 6, Subsequent Event
below.

6/30/97 9/30/96

Investment in UAF ...................... $ - $1,847,148
Investment in Petals.................... 358,080 410,932
Other................................... - 190,543
-------------- -------------
Investment in affiliated companies...... $ 358,080 $ 2,448,623

NOTE 4 CONVERTIBLE NOTES

In November 1996, Epitope exchanged $3.4 million principal amount of Agritope
convertible notes for 250,367 shares of common stock of Epitope at a reduced
exchange price of $13.50 per share. The exchange price had previously been fixed
at $19.53 per share. Accordingly, Agritope recognized a non-cash charge to
results of operations of $1.2 million in the first quarter of fiscal 1997
representing the conversion expense. Concurrent with the note conversion,
Epitope made a $4.4 million capital contribution to Agritope. On June 30, 1997,
Agritope paid in full the remaining $240,000 principal amount outstanding.

NOTE 5 SHAREHOLDER'S EQUITY

In the first quarter of fiscal 1997, a minority shareholder in Vinifera
contributed $100,000 to Vinifera in satisfaction of a stock subscription
agreement.

In the third quarter of fiscal 1997, Agritope sold 770,000 shares of common
stock of Vinifera to outside parties for $1.5 million in cash. In accordance
with the terms of the related stock purchase agreements, Agritope contributed
the proceeds of these stock sales to Vinifera's capital. These sales of
previously issued shares of Vinifera common stock reduced the percentage
ownership by Agritope in Vinifera voting stock from 76 percent to 61 percent.

F-19
<PAGE>

Interim Financial Statements
Agritope, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

NOTE 6 SUBSEQUENT EVENT

In October 1997, the majority owner of Petals informed the Company that it had
entered into negotiations to sell Petals to an unrelated third party. Under the
proposed terms of sale, the Company's interest in Petals would be reduced to
less than 10 percent. The Company was further informed that the majority owner
did not intend to advance additional funds to Petals and that if a sale could
not be consummated, intended that Petals would cease operations and liquidate
its assets. Based on this information, the Company believes that its investment
in Petals has more than temporarily declined and, accordingly, intends to record
a charge to operations of $358,080 in the fourth quarter of 1997.

F-20
<PAGE>

PART II

INFORMATION NOT REQUIRED IN INFORMATION STATEMENT/PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

Amount

SEC Registration Fee............................... $ 1,550

Accounting Fees and Expenses*...................... $ 25,000

Legal Fees and Expenses*........................... $ 50,000

Blue Sky Fees and Expenses*........................ $ 4,900

Printing, including Registration Statement, $ 50,000
Information Statement/Prospectus, etc.*..........

Miscellaneous Expenses*............................ $ 34,550
--------

TOTAL EXPENSES*.................. $166,000

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

*Estimated

Item 14. Indemnification of Directors and Officers.

Indemnification. Generally, the Oregon Business Corporation Act (the
"Oregon Act") requires the indemnification of an individual made a party to a
proceeding because the individual is or was a director or officer of the
corporation against reasonable expenses incurred by the director or officer in
the proceeding if the individual is wholly successful on the merits or
otherwise. In addition, the Oregon Act allows a corporation to indemnify a
director, officer, employee or agent of the corporation if:

(a) The conduct of the individual was in good faith;

(b) The individual reasonably believed that the individual's
conduct was in the best interests of the corporation, or at least not
opposed to its best interests;

(c) In the case of any criminal proceeding, the individual had
no reasonable cause to believe that the individual's conduct was
unlawful;

(d) In the case of any proceeding by or in the right of the
corporation, the individual was not adjudged liable to the corporation;
and

(e) In connection with any proceeding (other than a proceeding
by or in the right of the corporation) charging improper personal
benefit to the individual, the individual was not adjudged liable on
the basis that he or she improperly received personal benefit.

Generally, when appropriate, the Oregon Act also authorizes a court to
order indemnification, whether or not the above standards of conduct have been
met, if the court determines that the officer or director is entitled to
mandatory indemnification under the Oregon Act or is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances. In
addition, the Oregon Act provides that the indemnification described above is
not exclusive of any other rights to which directors, officers, employees or
agents may be entitled under the

II-1

<PAGE>

corporation's articles of incorporation or bylaws, or under any agreement,
action of its board of directors, vote of shareholders, or otherwise.

Article 6 of the restated articles of incorporation of the Registrant
permits the Registrant to indemnify its directors, officers, employees, and
agents to the fullest extent permitted by law. Article 8 of the restated bylaws
of the Registrant requires such indemnification as to directors and officers,
against expenses and liability (other than in a proceeding by or in the right of
the Registrant), including attorney fees, actually and reasonably incurred by
such individual in connection with any threatened, pending, or completed action,
suit, or proceeding to which the individual is a party because of service to the
Registrant. Article 8 of the bylaws further provides that the foregoing right of
indemnification is not exclusive of any other rights to which the individual may
be entitled under the Oregon Act, restated articles of incorporation, bylaws,
agreement, action of the shareholders or disinterested directors, or otherwise.
The Registrant may, but is not required to, offer the same rights of
indemnification, on a case-by-case basis, to its employees and agents.

In addition to the foregoing right of indemnity, the Registrant will
enter into indemnification agreements with all of its officers and directors,
the forms of which are filed as Exhibits 10.10 and 10.11 hereto. Each
indemnification agreement makes provisions of the Oregon Act relating to
permissive indemnification mandatory and therefore restates the Registrant's
obligation as set forth in the bylaws, as discussed above. In addition, each
indemnification agreement sets forth the Registrant's obligation to indemnify
the party to the agreement in the event that the indemnitee is entitled to
indemnification of some but not all liability and expenses. The indemnification
agreements and the restated bylaws also set forth procedures for the defense of
claims by the Registrant.

Section 60.367 of the Oregon Revised Statutes (a part of the Oregon
Act) provides in substance that any director held liable pursuant to that
section for the unlawful payment of a dividend or other distribution of assets
of a corporation shall be entitled to contribution from the shareholders who
accepted the dividend or distribution, knowing the dividend or distribution was
made in violation of the Oregon Act or the articles of incorporation. The
section also provides that any such director shall be entitled to contribution
from the other directors who voted for or assented to the dividend or
distribution without complying with the applicable standards of conduct
prescribed by the Oregon Act.

The Registrant understands that the current position of the Securities
and Exchange Commission is that any indemnification of liabilities arising under
the Securities Act of 1933, as amended, is against public policy and is,
therefore, unenforceable.

The effects of these provisions is to indemnify directors and officers
of the Registrant against all costs and expenses of liability incurred by them
in connection with any action, suit or proceeding in which they are involved by
reason of their affiliation with the Registrant, to the fullest extent permitted
by law.

Insurance. The Registrant intends to carry insurance protecting
officers and directors against certain liabilities that they may incur in their
capacities as such.

Item 15. Recent Sales of Unregistered Securities.

Agritope will sell at least 1,343,000 shares of Agritope Stock at a
price of $7 per share, for an aggregate price of at least $9.4 million in the
Private Placement, immediately following the Distribution. Subscribers in the
Private Placement have entered stock purchase agreements and have deposited the
purchase price in an escrow account, pending completion of the Distribution and
the closing of the Private Placement. The shares of Agritope Stock sold in the
Private Placement will represent at least 27 percent of the Agritope Stock
outstanding following the Distribution. Shares sold in the Private Placement
will not be registered under the Securities Act in reliance upon the exemption
from registration provided by Regulation S.

II-2
<PAGE>

Item 16. Exhibits and Financial Statement Schedules.

(a) The exhibits to the Registration Statement required by Item 601 to
Regulation S-K are listed in the accompanying index to exhibits.

(b) No financial statement schedules have been filed because the
requested information is not applicable or is provided as part of the
consolidated financial statements in the Information Statement/Prospectus
included in this Registration Statement.

Item 17. Undertakings.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 2 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Beaverton, state of Oregon, on October 24, 1997.

AGRITOPE, INC.

By /s/ Gilbert N. Miller
Gilbert N. Miller, Executive Vice President
and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on October 24, 1997, by the following
persons in the capacities indicated.

Signature Title

* ADOLPH J. FERRO, PH.D. Chairman of the Board, President, Chief
Adolph J. Ferro, Ph.D. Executive Officer and Director
(Principal Executive Officer)

/s/ Gilbert N. Miller Executive Vice President,
Gilbert N. Miller Chief Financial Officer, Secretary and
Director
(Principal Financial Officer and
Principal Accounting Officer)

*W. CHARLES ARMSTRONG Director
W. Charles Armstrong

*ROGER L. PRINGLE Director
Roger L. Pringle

*NANCY L. BUC Director
Nancy L. Buc

*MICHAEL de BEAUMONT Director
Michael de Beaumont

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

II-4

<PAGE>

EXHIBIT INDEX

Number Description

2.* Form of Separation Agreement between Epitope, Inc.
("Epitope"), and Agritope, Inc. ("Agritope").

3.1* Current Restated Articles of Incorporation of Agritope.

3.2* Proposed form of Restated Articles of Incorporation of
Agritope.

3.3* Current Restated Bylaws of Agritope.

3.4* Proposed form of Restated Bylaws of Agritope.

4.1** Form of Common Stock Certificate.

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

5.* Form of Opinion of Tonkon, Torp, Galen, Marmaduke & Booth.

8.* Form of Opinion of Miller, Nash, Wiener, Hager & Carlsen LLP.

10.1** Form of Transition Services and Facilities Agreement between
Epitope and Agritope.

10.2* Form of Tax Allocation Agreement between Epitope and Agritope.

10.3** Form of Employee Benefits Agreement between Epitope and
Agritope.

10.4* Agritope, Inc. 1997 Stock Award Plan.

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

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

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

10.8** Form of Employment Agreement between Agritope and Richard K.
Bestwick, Ph.D.

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

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

10.11* Form of Indemnification Agreement for directors.

10.12* Form of Indemnification Agreement for officers.

II-5

<PAGE>

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

10.14* Option to License and Research Support Agreement between the
Salk Institute for Biological Studies and Epitope dated
February 25, 1997, including Amendment dated July 25, 1997,
and Assignment between Agritope and Epitope. Portions of this
exhibit have been omitted pursuant to a request for
confidential treatment.

10.15* Superior Tomato Associates, L.L.C. Operating Agreement dated
February 19, 1996.

10.16* Placement Agent Agreement between American Equities Overseas,
Inc., and Agritope, dated October 15, 1997.

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

10.18* Form of Warrant Agreement to be issued in connection with the
Private Placement.

21. The subsidiaries of Agritope are Vinifera, Inc., an Oregon
corporation, and Agrimax Floral Products, Inc., a Minnesota
corporation. Agritope owns a 662/3 percent interest in
Superior Tomato Associates, L.L.C.

23.1* Consent of Price Waterhouse LLP.

23.2* Consent of Tonkon, Torp, Galen, Marmaduke & Booth (included in
Exhibit 5).

23.3* Consent of Miller, Nash, Wiener, Hager & Carlsen LLP (included
in Exhibit 8).

24.* Powers of attorney.

27.* Financial Data Schedule.

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

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

* Previously filed

** To be filed by amendment

II-6