UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                 FORM 10-KSB

   [ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THESECURITIES
                     EXCHANGE ACT OF 1934 [FEE REQUIRED]

                 For the fiscal year ended December 31, 1997
                                     OR
      [   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
              SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

    For the transition period from  _______________  to _______________

                       Commission file number: 0-16310

                     AMERICAN EDUCATIONAL PRODUCTS, INC.
           (Exact Name of Registrant as Specified in its Charter)

             Colorado                              84-1012129
  (State or other jurisdiction of        (I.R.S. EmployerIdentification
  incorporation or organization)                     number)

6550 Gunpark Drive, Suite 200, Boulder, Colorado      80301
(Address of principal executive offices)           (Zip Code)

    Registrant's telephone number, including area code:   (303)527-3230

      Securities registered pursuant to Section 12(b) of the Act:NONE
                                      
         Securities registered pursuant to Section 12(g) of theAct:

                        Common Stock, $.05 par value
                              (Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-KSB or any amendment to this Form 10-KSB.   [    ]

The Registrant's revenues for the year ended December 31, 1997,  were
$8,392,000.

As of March 24, 1998, the aggregate market value of the Common Stock of the
Registrant based upon the closing prices of the Common Stock as quoted by
NASDAQ (symbol "AMEP") held by non-affiliates of the Registrant was
approximately $4,450,000.  As of March 24, 1998, there were 960,000 shares
of the Common Stock of the Registrant outstanding.<PAGE>
<PAGE>
                     DOCUMENTS INCORPORATED BY REFERENCE

The Registrant hereby incorporates herein by reference the following
documents:

   Part III
   
   Item  9.  Directors and Executive Officers of the Registrant.
   
   Item 10.  Executive Compensation.
   
   Item 11.  Security Ownership of Certain Beneficial Owners and Management.

   Item 12.  Certain Relationships and Related Transactions.

   The foregoing are incorporated by reference from the Registrant's
   definitive Proxy Statement relating to its annual meeting of
   stockholders, which will be filed in an amendment within 120 days of
   December 31, 1997.
   
   Item 13.  Exhibits

   1.   Incorporated by reference in the Registrant's Post Effective
        Amendment No. 5 to Registration Statement on Form S-18 filed with
        the Securities and Exchange Commission and declared effective on
        July 1, 1987.

   2.   Incorporated by reference from the Registrant's Registration
        Statement on Form S-8 filed with the Securities and Exchange
        Commission, and declared effective on August 4, 1992.

   3.   Incorporated by reference from the Registrant's Registration
        Statement on Form S-8 filed with the Securities and Exchange
        Commission on March 17, 1998.

   4.   Incorporated by reference from the Registrant's Current Report on
        Form 8-K dated March 11, 1994 and filed with the Commission on March
        24, 1994.

   5.   Incorporated by reference from the Registrant's Current Report on
        Form 8-K dated December 20, 1995 and filed with the Commission on
        January 4, 1996.

   6.   Incorporated by reference from the Registrant's Current Report on
        Form 8-K dated June 17, 1996, and filed with the Commission on July
        3, 1996.


Forward-Looking Statements
--------------------------
In addition to historical information, this Annual Report contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and are thus prospective.  The forward-
looking statements contained herein are subject to certain risks and
uncertainties that could cause actual results to differ materially from
those reflected in the forward-looking statements.  Factors that might
cause such a difference include, but are not limited to, competitive
pressures, changing economic conditions, factors discussed in the section
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations", and other factors, some of which will be outside
the control of management.  Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof.  The Company undertakes no obligation
to publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof.  Readers should refer to
and carefully review the information described in future documents the
Company files with the Securities and Exchange Commission.  
<PAGE>
<PAGE>
                                   PART I

Item 1.   Description of Business

Business Development
--------------------
American Educational Products, Inc. ("AMEP" or the "Company") was organized
in 1986 with the primary purpose of merging with or acquiring one or more
businesses.  It completed an initial public offering that same year.  Its
first acquisition was of an educational products manufacturer, Scott
Resources, Inc. ("Scott").   Since that first acquisition, the Company has
focused its efforts on the education industry.  AMEP is a developer of
hands-on educational materials for students, teachers, and parents.  The
Company has a broad base of proprietary products which are primarily used
to educate students from pre-school through high school (the "K - 12"
market).

The Company's mission is to manufacture and distribute products which help
teachers increase their effectiveness in the classroom, facilitate
students' learning through the joy of inquiry and discovery, and encourage
parental participation in their children's education.  The Company's
manipulative products allow teachers to use the hands-on approach to
education, consistent with a major industry trend away from exclusive
reliance on textbooks.

In 1986, the Company adopted a long term growth strategy to develop its
product lines and strengthen its market position via acquisition. The
Company actively seeks acquisition opportunities that complement its
existing business.  It believes that the appropriate long-term strategy is
to be involved in the consolidation of a fragmented industry.

During 1996, 1995, and 1994, the Company experienced significant net losses
that temporarily eliminated its access to capital to make acquisitions. 
During that period, AMEP focused its efforts on the core competency of
manufacturing manipulative products.  It has subsequently returned to
profitable operations and intends to use some of its cash flow from
operations to fund acquisition activities.  Should additional funds be
required, it intends to pursue outside sources of capital.

In 1988, the Company formed Summit Learning, Inc. ("Summit") as a direct
mail marketer of educational products.  Summit grew rapidly and became the
largest division of AMEP.  By 1995, Summit had grown so large that it was
no longer possible for AMEP to provide adequate working capital.  In
December, 1995, the assets of Summit were sold.  At the time of the sale,
Summit represented about 50% of AMEP consolidated sales.

To add to its existing line of science products, the Company acquired
Hubbard Scientific, Inc. ("Hubbard") in August, 1991.  This leveraged asset
acquisition was completed through a two-tiered, asset-based financing in
which the Company increased its senior secured revolving credit facility by
$700,000, borrowed $3,000,000 under a senior subordinated term note bearing
interest at the rate of 23% per annum, and issued $500,000 in redeemable
preferred stock to the seller.  The Company prepaid and retired the term
note, redeemed the preferred stock, and reduced the revolving line of
credit in September, 1992, with the proceeds of its secondary public
offering.

In September, 1992, the Company completed a secondary public offering of
common stock, realizing net proceeds of approximately $4,763,000.  Most of
the proceeds were used to retire the debt and redeemable preferred stock
incurred in connection with its acquisition of Hubbard.

Effective December 31, 1992, the Company acquired certain assets of Redco
Science, Inc. ("Redco").  During 1993, the manufacturing operations of
Redco were assimilated into the Hubbard facility in Chippewa Falls,
Wisconsin.  Proceeds from the secondary public offering provided funds for
the acquisition.

On March 11, 1994, the Company completed the acquisition of certain assets
of Churchill Films, Inc., a producer and distributor of educational
videotapes, videodiscs, and films.  In connection with the acquisition, the
Company formed a multi-media subsidiary, AEP Media Corporation, which
assimilated the assets and did business as Churchill Media ("Churchill"). 
The acquisition was financed primarily through bank debt.  Churchill's
performance was not satisfactory and in June, 1996, the assets of Churchill
were sold.  

In August, 1994, the Company acquired a raised relief map line previously
owned by Kistler, Inc. d.b.a. Kistler Graphics of Denver, Colorado.  The
product line includes 27 maps which complement the Company's existing line
of raised relief maps.  The acquisition was financed by bank debt.


Industry
--------
The Company develops, manufactures, and distributes educational products to
parents, teachers, principals, public and private schools, and school
districts throughout the United States and in some selected international
locations.  Generally, the Company's products can be classified as
supplemental instructional aids, that is, products that present educational
content in a format different than traditional textbooks.  Specifically,
the Company produces manipulative products that students can physically
touch and examine to gain additional understanding.

America's educational system continues to be the target of increased
scrutiny and concern.  Continued poor student achievement, despite reform
efforts and increased funding, has kept education in the national spotlight
since the 1983 release of the National Commission on Excellence in
Education's widely acclaimed report, "A Nation at Risk."  Fueled by media
attention, the public has become increasingly aware of the need for
improving the effectiveness of the education system.  Attention to test
scores and industry accountability is constantly being monitored by
educators and the public.

School markets are in a state of change.  There are several factors
contributing to these changes.  High growth in enrollment in the 1996-97
school year, plus societal demands for new programs such as alternative
education, or before and after school care are fueling some changes. 
School systems are being reformed with creation of charter schools and
magnet schools. The trend toward school system decentralization is shifting
more decisions to the school building level rather than to the school
district, region, or state.  Teachers are choosing the curricular materials
they need to effectively convey educational concepts while placing the
student at the center of the program.  The industry is rethinking its sales
and marketing strategies.  As a result, the industry faces evolving
challenges to reaching individual teachers with high quality, cost
effective teaching aids.
  
Many school systems are converting or modifying curriculum to establish
programs that are in line with standards developed by national educational
authorities.  These trends include integrated curriculums that overlap
several areas of study for continual reinforcement of basic information,
developing programs that correlate funding with the accomplishment of
educational goals, and revising the methods by which instructional material
(textbooks, manipulatives, software, etc.) is evaluated.  

Buying trends within the school industry are reflected in several ways,
i.e. direct purchase by districts, purchases controlled by district
"subject coordinators" or committees, individual school purchases made by
school administrators, media specialists and classroom teachers or
combinations of the above.  Mail order purchases are also on the rise and
are made by administrators in charge of budgets as well as individual
classroom teachers.  Again, industry sources agree that individual school
administrators in both elementary and secondary school environments are
often the decision makers on which purchases will be authorized in their
particular school.  These same administrators play key roles in how schools
run and how educational moneys are allocated at local levels.

Supplemental instructional materials are needed by schools for several
critical reasons.  First, teachers with language arts training may not be
prepared adequately to teach math and science in elementary and middle
schools.  Second, youth at the elementary and middle school levels learn
best developmentally by active use of material they can manipulate
physically.  A report of the Association of American Publishers ranked
hands-on tools, such as those marketed by AMEP, as the "most effective (out
of ten) in terms of student learning."  Textbooks were ranked fifth out of
ten.

The success of the Company relies upon government funding of educational
programs.  Most of the funding is provided by state and local governments,
although about 7% of the funds come from the federal government.  The
Company believes that governmental units will continue to increase funding
of education to meet an increasing school population.  However, there can
be no assurance that such funding will continue to increase.


Scott and Hubbard
-----------------
The Scott product line includes mathematics and earth science products that
are used by elementary, middle, and high school students and teachers.

Most of the math products are manipulatives; that is, products that
illustrate a particular mathematical concept by providing a concrete or
physical object as the focus of instruction.  Twelve major math product
lines manufactured under the Scott name include:

   Fraction Bars(-Registered Mark-) program is a comprehensive series of
   manipulatives used to introduce and teach fraction concepts.
   Decimal Squares(-Registered Mark-) program teaches decimals and percents
   through the use of a complete series of objectives, manipulatives,
   activities, and tests.
   Chip Trading(-Registered Mark-) activities program uses manipulatives to
   teach the basic skills of addition, subtraction, multiplication, and
   division.
   Scott Geoboards are wooden or plastic tiles with pin arrays used to teach
   basic geometric concepts.
   Pattern Blocks and Color Cubes are painted wooden or plastic blocks of
   various shapes, used to teach shapes, counting, and sorting to younger
   students.  They are used to teach angles, fractions, areas, and volumes
   to older students.
   Color Tiles are plastic, square tiles used to model basic operations with
   whole numbers for primary age learners, and to develop patterns and
   relationships for problem solving skills for intermediate and middle
   school learners.
   Fraction Interaction(-Registered Mark-) video series includes three
   videos for teaching fractions.  The videos are developed for middle
   school learners.  Videolabs, a package that combines a video and Scott
   manipulatives for student activities, and Teacher Packs are also
   available.
   Clever Catch(-Registered Mark-) is a series of beach balls illustrating
   math and phonics skills.
   Math Chase(-Registered Mark-) is a set of three games to reinforce and
   extend math skills at multiple levels.
   AlgeBits is a set of manipulatives for teaching pre-algebra concepts to
   middle school learners.  Instruction guides are also developed by Scott.
   Stretch & Shape(-Registered Mark-) is a package with Geoboards and
   activities for an introduction to geometry concepts.
   Terrific Triangles activities program uses manipulatives to teach whole
   number concepts and operations.

Other math products developed by Scott include mathematics games,
reproducible resource books, and teaching aids such as overhead materials.

Scott also manufactures approximately 150 different earth science products
that are sold to distributors or directly to schools throughout this
country and internationally.  The products include rock, mineral, and
fossil collections, charts, classroom activity sets, and videolabs.  In
addition, Scott has produced 25 earth science videotape and videodisc
titles.  Over 250 different varieties of rocks, minerals, and fossils are
sold in bulk quantities or as individual specimens to customers.

Hubbard produces a comprehensive line of high quality earth science, life
science, and physical science materials that are specifically designed for
classroom use.  These products include three-dimensional models of animal
and human anatomy, a wide variety of astronomy and earth science
experiments and models, and the Jewel line of Plant Mobiles, animal cages,
and fresh and salt water aquariums.  Additionally, the Company is the
largest U.S. producer of high quality raised relief maps that are marketed
to consumers through a number of sales channels, including map dealers,
specialty stores, independent sales representatives, and direct mail. 
Hubbard produces approximately 250 different maps.

The raw materials and components used by the Company are purchased from a
large number of suppliers.  There are a few major vendors that the Company
relies on to supply materials and services.  If a disruption in supply
occurred, alternate vendors could be found; however, delays in production
could result.  The Company has not experienced significant raw material
cost increases during the last two years.

The educational industry is inherently seasonal in nature.  There are wide
variations in sales from month to month and, as a result, accounts
receivable, inventories, and accounts payable also vary widely.  The summer
months are the most active as educational institutions restock their
supplemental materials for the next school year.  Sales terms are typically
net 30 days and orders are normally filled within 14 days.

As of December 31, 1997, the Company had a backlog of orders of $136,000,
compared to a backlog of $161,000 at December 31, 1996, and $367,000 at
December 31, 1995.  Historically, the order backlog at year-end has not
been a good indicator of future sales.


Markets and Marketing
---------------------
Various industry researchers compile actual historical information
pertinent to the education industry and prepare estimates of changes over
the next several years.  The most recent information indicates that there
are 51.1 million public and private school students and 3.1 million
teachers.  The number of new students forecast for grades kindergarten
through twelve is predicted to increase to 55 million by the year 2007. 
The number of teachers is expected to similarly increase.

The Company reaches its target market primarily through the use of 300
distributors who publish and circulate educational product catalogs
displaying AMEP products, among others.  Relationship marketing with
distributors is used to increase support for dealers in the sales of
products manufactured by AMEP.  The Company also sells through direct mail
catalogs and independent sales representatives.  Scott and Hubbard maintain
separate brand-name identifications.

The Company's marketing efforts also include attending national and
regional trade shows and teacher's conferences such as the National Council
of Teachers of Mathematics (NCTM), the National Science Teachers
Association (NSTA), the National School Supply and Educators Association
(NSSEA), and the Educational Dealers and Suppliers Association (EDSA). 
Marketing efforts for maps includes attendance at the International Map
Trade Association and Outdoor Retailer Association.  Attendance at these
exhibitions increases the Company's visibility in the market and affords it
the opportunity to meet end users and evaluate the competition.

International marketing is a growing sales channel of the Company.  Such
sales are made principally through international educational dealers and
are directed by the vice president of marketing assisted by two sales
persons.  International sales comprise approximately 15% of consolidated
revenues.


Competition
-----------
The Company faces competition from many businesses ranging in size from
sole proprietorships to large corporations.  The products manufactured by
these competitors range from textbooks to manipulatives and models.  Many
of these entities publish catalogs in addition to listing their products in
dealer catalogs.  Some of the competitors are larger and have greater
financial resources than AMEP.  The Company believes that its competitive
advantages include the ability to provide custom orders and to provide
specialized products designed to satisfy basic teaching needs.  There are
no guarantees that the Company's products will continue to receive a
favorable reception from classroom educators.  

During the last three years, there has been increasing competition from
foreign manufacturers of educational products.  These products are often
priced less than the Company's products.  While the Company can provide its
customers with better delivery schedules and more comprehensive teacher
manuals, foreign competition may have future adverse consequences to the
Company.

Scott directly competes with products such as Attribute Blocks, Cuisinaire
Rods, and Base 10 Blocks in math products.  In science products, Scott's
principal direct competitors in the market are Ward's Natural Science
Establishment and Geo-Science, although some hobby outlets and science
supply houses have begun to enter this market.

Hubbard encounters a significant amount of direct competition for many of
its classroom products.  Some of the product lines are similar in quality
and price to items manufactured by others.  Two product lines, Jewel and
raised relief maps, occupy a special market niche.  The Jewel product line
of high quality aquariums, cages, and botany apparatus is designed to meet
extreme requirements of scientific experimentation and demonstration.  The
Company is not aware of any competitors producing comparable quality items
for the school market.  However, these products are priced significantly
higher than lower quality alternatives.  Similarly, Hubbard produces raised
relief maps which provide a unique cartographic perspective.  However,
raised relief maps are significantly more expensive than flat maps of the
same cartographic image.

The Company believes that the educational marketplace has become more
competitive in the last three years.  Specifically, sales of technology
related products are growing at a faster rate than sales of manipulatives
and videos.  The Company does not manufacture technology related products
and has no such products currently under development.  Many of the
Company's competitors are larger, have greater financial resources, and
spend more money on product development.


Product Development
-------------------
To maintain and improve its position in the market, the Company has made a
commitment to develop new products.  A key component to product development
is regular revisions of existing products to keep them up-to-date with
changing educational standards.

The product development process includes formal field testing and
development of prototypes for pre-sale opportunities to ensure quality of
new products and to meet critical market window introductions.  During
1997, the Company completed development efforts on 25 products.  These
products included new rock charts, the Nutrition Model Kit, Fraction
Interaction videolabs, AlgeBits and Pre-Algebra Communicating Guide, and
seven middle school physical science kits.  In addition, nine products were
revised by updating teacher guides, translating into foreign languages, or
re-engineering.

The Company began marketing 14 new raised relief maps in 1997.  Most of the
new maps were acquired under exclusive distributorship arrangements.

In addition to internal product development, many new products are created
externally.  Some products are developed by independent contractors under a
development agreement with the Company.  Some products are developed by
teachers or other interested educators and submitted to the Company for
evaluation.  The Company regularly receives prototypes from these external
sources.  If the Company desires to refine and manufacture these products,
it will typically obtain the rights to the product and pay the author a
royalty on product sales over the life of the copyright.  


Intellectual Property
---------------------
Copyrights, trademarks, and trade secrets are the principal protection
sources for the Company's products.  The Company holds numerous copyrights
covering its published materials, including teachers' guides, manuals, game
boards, and videos.  Each manipulative and model is accompanied by these
published materials.  Approximately one-half of these copyrights are
derived directly from original works created by employees of the Company or
by independent contractors hired under agreement for a specific project. 
The remaining copyrights are held by the Company through licensing
arrangements with the authors.

The Company owns federally registered Trademarks for the following product
names:  Fraction Bars(-Registered Mark-), Decimal Squares (-Registered
Mark-), Chip Trading(-Registered Mark-), Math Chase(-Registered Mark-),
Math in Brief(-Registered Mark-), Clever Catch(-Registered Mark-), Fraction
Interaction(-Registered Mark-), Earth Science VideoLab(-Registered Mark-),
Finders(-Registered Mark-), Stretch & Shape(-Registered Mark-), and Checks
and Balances(-Registered Mark-).  The Company claims common law Trademark
protection in all of its proprietary marks and is extremely diligent in its
efforts to develop and protect new marks.

All of the copyrights, licenses, and trademarks are considered by the
Company to be valuable property rights.  The protection afforded by these
intellectual property rights and the law of trade secrets are believed by
the Company to be adequate protection for its products.  However,
notwithstanding the Company's intellectual property rights, it is possible
for a competitor to develop near imitations of the Company's products,
implementing modifications, without violating those rights.


Personnel
---------
The Company employs 66 persons in full time permanent positions.  Personnel
are located in Boulder, Colorado; Fort Collins, Colorado; and Chippewa
Falls, Wisconsin.  There are 24 persons employed in direct manufacturing
positions;  15 persons employed in factory supervisory, clerical,
purchasing, and product development positions; 4 persons employed in
shipping and receiving positions; 11 persons employed in sales, marketing
and customer service positions; and 12 persons employed in general and
administrative positions.

The Company is not part of any collective bargaining agreement.  There have
been no work stoppages and the Company believes its employee relations are
good.


Item 2.   Description of Property

The Company leases space in Boulder, Colorado, to use as corporate
headquarters.  This property consists of 1,400 square feet and is currently
leased at $2,000 per month, expiring September 2000.

Approximately 9,200 square feet of office and warehouse space is leased in
Van Nuys, California.  The space was previously occupied by Churchill. 
Rent is $5,400 per month, and the lease expires in 1999.  The Company
signed a sublease with an unaffiliated third party to occupy the space
through the remaining term of the lease.  Sublease rental income will
approximate $5,000 per month.  

Hubbard's principal manufacturing facility is located in Chippewa Falls,
Wisconsin, and is comprised of approximately 37,000 square feet.  The
Hubbard manufacturing facility is leased at $8,150 per month.  The lease is
subject to annual renewal.

In 1992, AMEP purchased 3.5 acres together with 8,000 square feet of
improvements in Fort Collins, Colorado.  In January 1993, the Company
completed construction of a 10,500 square foot facility on this property. 
The five buildings on the property contain approximately 14,200 square feet
of manufacturing and warehouse space and 4,300 square feet of office space. 

The Company believes that all its facilities are adequate for their
intended purpose and does not plan any significant investment in additional
facilities during the next year.


Item 3.   Legal Proceedings

Neither the Company, nor any of its subsidiaries, is currently a party to
any material pending litigation or other legal proceeding.


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

The Company did not submit any matters to a vote of its security holders
during the fourth quarter of its fiscal year ending December 31, 1997.
<PAGE>
<PAGE>
                                   PART II

Item 5.   Market for Common Equity and Related Stockholder Matters

Price Range of Common Stock
---------------------------
The Company's Common Stock trades on the NASDAQ SmallCap Market  under the
symbol AMEP and on the Pacific Exchange under the symbol EP.

The following table has been adjusted to reflect the one-for-five reverse
stock split that became effective on April 22, 1997.

<TABLE>
<CAPTION>
                                            High          Low
  <S>                                       <C>           <C>
  1996
  First Quarter                             9.40          5.65
  Second Quarter                            8.15          5.65
  Third Quarter                             7.20          3.75
  Fourth Quarter                            6.55          3.90

  1997
  First Quarter                             5.31          2.94
  Second Quarter                            6.75          2.38
  Third Quarter                             7.75          5.63
  Fourth Quarter                            8.00          5.13

  1998
  First Quarter (through March 24)          7.88          5.38

</TABLE>

The bid price of the Company's common stock as of March 24, 1998, was $7.69
per share.  The prices presented are bid prices which represent prices
between broker-dealers and do not include retail markups and markdowns or
any commissions to the broker-dealer.  The prices may not reflect prices in
actual transactions.

As of March 24, 1998, there were approximately 300 shareholders of record
and approximately 1,700 beneficial shareholders.


Dividends
---------
The Company has paid no cash dividend on its common stock during the last
two fiscal years, and the Company's Board of Directors has determined that
no cash dividend on common stock will be paid for 1997.  Future dividend
policy is subject to the discretion of the Board of Directors and is
dependent on a number of factors, including future earnings, capital
requirements, and the financial condition of the Company.

During 1997, the Company issued a warrant dividend to existing
shareholders.  The warrant dividend consists of one warrant for each share
of common stock owned by shareholders of record on June 5, 1997.  Each
warrant entitles its holder for a period of three years to purchase one
additional share of the Company's common stock at an exercise price of
$10.00 per share.  No voting rights have been attached to the warrant.  The
Company retains the right to redeem the warrants upon 30 days notice for a
redemption price of $0.01 per warrant in the event that public trading of
the Company's common stock equals or exceeds 110% of the then current
exercise price of the warrant for twenty consecutive days.  

Item 6.   Management's Discussion and Analysis of Financial Condition and
Results of Operations

The following discussion addresses the financial condition and results of
operations for American Educational Products, Inc. and its Subsidiaries
("AMEP" or the "Company").  AMEP currently has two operating subsidiaries:
Hubbard Scientific, Inc. ("Hubbard"), and Scott Resources, Inc. ("Scott"). 
As discussed below, the Company recently sold the operating assets of two
subsidiaries: Summit Learning, Inc. ("Summit") and AEP Media Corporation,
d.b.a. Churchill Media ("Churchill").

Effective June 17, 1996, AMEP sold the assets of Churchill for a cash
payment of $1,000,000 plus future royalties.  AMEP purchased Churchill in
1994.  Accordingly, the operating results of Churchill were consolidated
with the Company commencing March 1, 1994, and ending on June 17, 1996.

In December, 1995, AMEP sold substantially all of the assets of Summit for
total proceeds of $3,982,000.  Accordingly, the operating results of Summit
were consolidated with the Company only through December 31, 1995.
 
Comparisons among 1997, 1996, and 1995 are affected by the foregoing
divestitures.

The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements, including the explanatory notes,
beginning on page F-1 in this annual report.


Liquidity and Capital Resources - December 31, 1997 Compared to December
31, 1996
---------------------------------------------------------------------------
The Company's liquidity and capital resources improved significantly during
1997.  Net income for the year was $514,000, compared to losses in each of
the two previous years.  Earnings before interest, taxes, depreciation and
amortization were $1,846,000.  The performance for 1997 reflects the
results of the restructuring and cost reduction measures implemented in
1996 and 1995.  The restructuring reduced the size of the Company and
returned it to its core business.

During 1997, cash flow from operations was sufficient to fund all of the
company's cash requirements.  Accordingly, the Company reduced its
outstanding indebtedness by 23% and reduced amounts owed to trade creditors
by 30%.  Whereas in prior years the Company had been unable to make all
payments on a timely basis, it eliminated that deficiency in 1997.  The
Company believes that the relationships with its vendors have been restored
to normal condition.

On April 4, 1997, the Company's shareholders approved a one-for-five (1-
for-5) reverse split of its $0.01 par value common stock.  The reverse
split became effective on April 22, 1997.  As of that date, the par value
of the Company's common stock was increased to $0.05 per share and the
number of common shares outstanding was reduced from 4,580,794 to 916,298. 
The reserve split has been shown in the accompanying financial statements
and notes as a retroactive adjustment giving effect to the split for all
periods presented.

During 1997, the Company issued a warrant dividend to existing
shareholders.  The warrant dividend consists of one warrant for each share
of common stock owned by shareholders of record on June 5, 1997.  Each
warrant entitles its holder for a period of three years to purchase one
additional share of the Company's common stock at an exercise price of
$10.00 per share.  No voting rights have been attached to the warrant.  The
Company retains the right to redeem the warrants upon 30 days notice for a
redemption price of $0.01 per warrant in the event that public trading of
the Company's common stock equals or exceeds 110% of the then current
exercise price of the warrant for twenty consecutive days.

A registration statement under the Securities Act of 1933 was filed
regarding the warrants and was declared effective by the Securities and
Exchange Commission in December, 1997.  The warrants were issued and began
trading on December 5, 1997 on the NASDAQ Small Cap Market System under 
the symbol  AMEPW.  NASDAQ informed the Company that, in its opinion, the
ex-dividend date for these warrants should be December 5, 1997, the day
that trading commenced.  As a result of the delayed ex-dividend date, the
Company may be required to issue additional warrants to disenfranchised
shareholders who sold shares between June 5, 1997, and December 5, 1997. 
The Company believes that approximately 50,000 warrants were effected by
the delayed date.  Issuing additional warrants would not have a material
adverse impact on the financial statements.  

In contrast to 1997, the Company experienced losses in 1996 and 1995.  The
net losses reduced the Company's liquidity and capital resources.  During
this period, cash provided from operations was not sufficient to fund the
Company's cash requirements.

Accordingly, the Company undertook a major restructuring and sale of
assets.  In 1995, the Company sold substantially all of the assets of
Summit to an unaffiliated company.  Total proceeds of the sale were
$3,982,000.  The Company utilized the proceeds to pay all of Summit's
outstanding accounts payable and to reduce the outstanding balance on the
Company's line of credit.  The Company recognized a gain of $1,092,000 on
the sale.  Revenue of $10,215,000 and operating income of $288,000 were
attributable to Summit's operations during the year ended December 31,
1995.

Effective June 17, 1996, the Company sold substantially all of the assets
of Churchill to an unaffiliated company.  Total cash proceeds of the sale
were $1,000,000.  In addition, the Company has the right to receive future
royalties on Churchill titles sold by the purchaser during the next four
years.  Royalties are calculated at 10% of sales and are subject to an
aggregate ceiling of $750,000.  Future royalties to be received have been
assigned to the bank as payments under the long-term debt.  The Company
utilized the cash proceeds to pay trade creditors and reduce the
outstanding balance on the long-term debt.  The Company recognized a loss
of $384,000 on the sale.  Revenue of $905,000 and operating losses of
$215,000 were attributable to Churchill during the six month period ending
June 30, 1996.  In 1997, the Company recorded an additional $38,000 loss
from Churchill related to a decline in estimated future royalty receipts. 

In July, 1996, the Company sold the land and buildings previously occupied
by Summit.  When the Company sold the assets of Summit in December, 1995,
it retained ownership of the real estate and leased a portion of it to the
purchaser of Summit.  The sale of the real estate provided approximately
$1,000,000 in net proceeds that were used to pay trade creditors and reduce
bank debt.  A gain on the sale of approximately $77,000 is reflected in the
financial statements. 
 
The Company revised its borrowing arrangements during 1997.  All of its
previously existing debt with Colorado National Bank, consisting of a
working capital line of credit and two term loans, was consolidated under
one asset based financing arrangement with Republic Acceptance Corp., an
affiliate of Colorado National Bank.  The new arrangement expires on April
30, 2000, and provides for borrowings up to $2,800,000.  Certain amounts
available to be borrowed under the agreement are derived from a borrowing
base as defined in the agreement relating to allowable inventory and
accounts receivable.  As of December 31, 1997, the borrowing base formula
limited total borrowings to $2,547,000.  Borrowings are collateralized by
substantially all the Company's assets.  Interest, computed at a floating
rate plus 3%, is payable monthly.  In addition, the Company is required to
make minimum monthly principal payments of $20,000. 
 
The borrowing arrangement contains a demand provision such that the lender
can demand repayment at any time.  Accordingly, the entire balance of
outstanding borrowings is reflected as a current liability.  The lender has
not indicated that it will demand payment during 1998 and management does
not expect to receive such a demand.  Should such a demand be made, the
Company would not have the funds available.  However, the Company's
improved financial condition should allow it to obtain the necessary funds
via either an equity placement or alternate borrowing arrangements.  

The Company believes that the funds available to it in 1998 will be
adequate to meet its operating requirements.  The source of those funds
will be cash flow from operations and additional borrowings available under
the arrangement with its lender.  The Company intends to install new
computer software and hardware during 1998.  Substantially all of the
arrangements required to finance that installation were completed during
1997.  Any acquisition activity undertaken by the Company during 1998 would
be contingent upon obtaining the necessary financing. 

During 1996, the Company sold 78,000 equity units for total proceeds of
$390,000.  The proceeds were used to reduce bank debt and to provide
additional working capital.  The equity units consisted of one share of the
Company's common stock plus a warrant to purchase one additional share of
common stock at a price of $5.00 per share.  During 1997, the exercise
price was reduced to $4.50 per share to reflect updated market valuations. 
At the time of the offering, the units were not registered under the
Securities Act and, accordingly, were only sold to "accredited investors",
as defined under the Securities Act.  The units were registered during
1997.  The warrants are exercisable through October, 1999.

The Company experienced a 46% working capital increase in the year ended
December 31, 1997.  Current assets of $4,239,000 increased $591,000 from
December 31, 1996, and current liabilities increased $51,000 from
$2,481,000 to $2,532,000.  As a result, working capital increased from
$1,167,000 to $1,707,000, and the current ratio increased from 1.47 to
1.67.  Working capital improved because of funds generated by operations.

Total assets decreased 4% from $7,556,000 at December 31, 1996, to
$7,251,000 at December 31, 1997.  During the same period, total liabilities
decreased 25% from $3,388,000 to $2,532,000.  Assets decreased primarily
because of normal depreciation and amortization offset by increased
accounts receivable and inventory.  Liabilities decreased because cash flow
from operations was used to reduce accounts payable and debt.  

Stockholders' equity increased from $4,168,000 at December 31, 1996, to
$4,719,000 at December 31, 1997, a increase of $551,000 or 13%.  The
increase was caused by 1997 net income of $514,000 and by the issuance of
stock under the employee stock purchase plan and by various stock option
transactions.

Accounts receivable increased from $840,000 at December 31, 1996, to
$1,220,000 at December 31, 1997, an increase of $380,000 or 45%.  The
increase is attributable to increased fourth quarter sales in 1997 compared
to 1996.

Inventories increased from $2,475,000 at December 31, 1996, to $2,540,000
at December 31, 1997, an increase of $65,000 or 3%.  This increase can be
attributed to fourth quarter production in anticipation of first quarter
shipments.

Prepaid advertising costs of $38,000 at December 31, 1997, represents
preliminary costs associated with the 1998 catalog mailing program.  For
the 1997 catalog program, all costs were incurred subsequent to December
31, 1996.

Net property and equipment decreased from $2,681,000 at December 31, 1996,
to $2,247,000 at December 31, 1997, a decrease of $434,000 or 16%.  The
Company recorded depreciation expense of $665,000 for the year.  Capital
expenditures of $235,000 during the year were comprised primarily of
reproduction masters and production tooling including the purchase of
assets used in the production of USGS section maps.  Those assets were
previously leased from the United States government.  

Video and film library costs decreased from $512,000 at December 31, 1996,
to $359,000 at December 31, 1997, a decrease of $153,000 or 30%. 
Substantially all of the decrease represented normal amortization expense.

Intangible and other assets decreased from $715,000 at December 31, 1996,
to $406,000 at December 31, 1997, a decrease of $309,000 or 43%.  Normal
amortization reduced these assets by $192,000.  The remaining decline
primarily represents collections of and adjustments to the long-term
royalty receivable arising from the sale of Churchill.

Accounts payable and accrued expenses decreased from $973,000 at December
31, 1996, to $677,000 at December 31, 1997, a decrease of $296,000 or 30%. 
The Company was able to reduce accounts payable and accrued expenses by
utilizing cash flow from operations.

Borrowings under the Company's working capital line of credit and notes
payable were reduced from $2,415,000 at December 31, 1996, to $1,855,000 at
December 31, 1997, a decrease of $560,000 or 23%.  The reduction was
achieved by utilizing cash flow from operations.

Management continually assesses the Company's need for capital resources. 
From time to time, the Company may evaluate and pursue additional sources
of capital.

Other than the foregoing, management knows of no trends, demands, or
uncertainties that are reasonably likely to have a material impact on the
Company's short-term liquidity or capital resources.


Results of Operations -- 1997 Compared to 1996 and 1995
-------------------------------------------------------
As previously discussed, the comparisons of operating results for 1997 to
1996 and 1995 are affected by the divestitures made by the Company.

The Company's performance improved in 1997.  Net income for the year was
$514,000, compared to losses in each of the two previous years.  The
restructuring undertaken by the Company reduced the size of the Company and
returned it to its core business.  Restructuring of continuing operations
has included major efforts to consolidate marketing and customer service
into Fort Collins, consolidate certain manufacturing processes to Chippewa
Falls, and reduce headcount across all functions.  In addition, the Company
reviewed all expenditures for potential savings and implemented significant
cost reduction measures.

During 1997, the Company did not experience negative events similar to
those occurring in prior years.  For example, in 1995, several major events
significantly increased the Company's expenses.  Sales of certain video and
science products were significantly below expectations.  At the end of
1995, the Company reviewed the recoverability of the assets it had acquired
from Churchill Films, Inc. in 1994 and Redco Science in 1992.  The
evaluation indicated that the Company was unlikely to fully recover the
cost of those assets and that the estimated fair value of those assets was
less than the amount recorded in the financial statements.  Accordingly,
AMEP recorded an impairment to reduce the assets' carrying value by
$3,297,000.

The Company reported net income of $514,000 for 1997, compared to a net
loss of ($1,095,000) for 1996, and a net loss of ($2,976,000) in 1995. 
After adjusting the per share calculation for the one-for-five reverse
split and the retroactive implementation of SFAS 128, 1997 income was $0.56
per share, the 1996 loss was ($1.29) per share, and the 1995 loss was
($3.61) per share.

In February 1997, the Financial Accounting Standards Board issued SFAS 128,
"Earnings per Share".  SFAS 128 establishes new standards for computing and
presenting earnings per share ("EPS").  Specifically, SFAS 128 replaces the
previously required presentation of primary EPS with a presentation of
basic EPS, requires dual presentation of basic and diluted EPS on the face
of the income statement for all entities with complex capital structures,
and requires a reconciliation of the numerator and denominator of the basic
and diluted EPS computations to the financial statements issued for periods
ending after December 15, 1997, and early application is not permitted. 
Upon adoption, SFAS 128 requires restatement of prior period EPS presented
to conform to the requirements of SFAS 128.  The adoption of SFAS 128 as of
December 31, 1997, did not have a material effect on the Company's
previously issued financial statements.

The Company's revenues in 1997 were $8,392,000, a decrease of $109,000 or
1% from the prior year revenues of $8,501,000 and a decrease of $11,941,000
or 59% below 1995.  Sales declined because of the divestitures of Summit
and Churchill.  Summit's revenues for 1995 were $10,215,000.  Churchill's
revenues for 1996 and 1995 were $905,000 and $2,418,000 respectively.  A
comparison of the Scott and Hubbard revenues indicates that 1997 revenues
of $8,392,000 were 10% greater that 1996.

The cost of goods sold for the year ended December 31, 1997, was
$5,232,000, a decrease of 6% from the prior year figure of $5,586,000 and
56% less than 1995.  Cost of goods sold declined because of the disposal of
Summit and Churchill.  Summit's costs of goods sold for 1995 were
$5,789,000. Churchill's cost of goods sold for 1996 and 1995 were $447,000
and $1,119,000 respectively.

Consolidated gross profits for 1997 were $3,160,000, an increase of
$245,000 or 8% from the prior year gross profit of $2,915,000, and a
decrease of $5,188,000 or 62% below 1995.  As a percentage of sales, the
gross margin increased from 34% in 1996 to 38% in 1997.  Summit's gross
profits for 1995 were $4,426,000 with a gross margin of 43%.  Churchill's
gross profits for 1996 and 1995 were $458,000 and $1,299,000 respectively,
with a gross margin of 51% in 1996 and 54% in 1995. The changes in both
gross profit and gross margin percent is primarily the result of the
disposal of Summit and Churchill.  For the core business that continued to
operate throughout 1997 and 1996, the gross margin percent increased from
32% in 1996 to 38% in 1997.  The improvement was primarily the result of
increased manufacturing activity that increased cost absorption.  In
addition, the Company eliminated certain promotional programs that
discounted its selling prices and had negative impact on margins.

The advertising component of marketing costs decreased $232,000 or 71% from
1996 and decreased $2,820,000 or 97% from 1995.  The 1997 and 1996
decreases are the direct result of the disposal of Summit and Churchill. 
Summit's advertising costs for 1995 were $2,612,000.  Churchill's
advertising costs were $58,000 for 1996 and $89,000 for 1995.

Other marketing costs decreased by $729,000 or 46% from 1996 and $1,973,000
or 70% from 1995.  As a percentage of sales these costs were 10% in 1997,
19% in 1996, and 14% in 1995.  Summit's other marketing costs for 1995 were
$576,000.  Churchill's other marketing costs were $476,000 for 1996 and
$1,198,000 for 1995.

General and administrative expenses were $1,377,000 in 1997, essentially
unchanged from 1996.  Compared to 1995, G & A expenses decreased from
$3,210,000 or 57%.  As a percentage of sales, general and administrative
expenses were 16% in all three years.  Summit's general and administrative
expense for 1995 was $950,000.  Churchill's general and administrative
expense for 1996 and 1995 was $138,000 and $571,000 respectively.

Interest expense continued to decline from $418,000 in 1996 (23% reduction)
and $874,000 in 1995 (63% reduction) to $323,000 in 1997.  The decreased
interest expense resulted from reductions to debt made possible primarily
through improved cash flow from operations and proceeds from the 1996 and
1995 asset sales. 

Included in 1996 is the previously mentioned loss on the sale of assets in
the amount of $384,000 resulting from the sale of Churchill and a gain on
the sale of assets in the amount of $77,000 resulting from sale of real
estate.  Included in 1995 is a gain on sale of assets in the amount of
$1,092,000 resulting from the sale of Summit.  No similar gains or losses
on asset sales were recorded in 1997.

The Company recorded no income tax expense in 1997 as it was able to offset
taxable income with net operating loss (NOL) carryforwards available from
prior years.  Approximately $500,000 of carryforwards were utilized in
1997.

The Company's operating losses in prior years allowed it to recognize tax
benefits related to the offset of taxes accrued or paid in prior years. 
The Company was able to carry back its taxable losses from 1995 and 1994 to
prior years and has received refunds of federal income taxes paid in 1993,
1992, and 1991.

During 1995, the Company exhausted all of the previously existing tax
benefits.  As a result, no additional tax benefits were recognized in 1996. 
The total benefit recognized in 1995 was $620,000. 

At December 31, 1997, the Company had NOL carryforwards and contribution
carryforwards for income tax purposes of approximately $3,700,000, which
expire beginning in 2009.  Under the Tax Reform Act of 1986, the amounts of
and the benefits from NOL carryforwards and contribution carryforwards are
subject to certain limitations in the amount of carryforwards that the
Company may utilize to offset future taxable income, if any.  Because
ultimate realization of any benefit from the NOL and contribution
carryforwards is uncertain, the Company has not recognized the future
benefit of these loss carryforwards in its financial statements.  The
potential future benefits are subject to periodic review and can be
recorded as a reduction of income tax expense at such time as their
utilization is probable.

Inflation did not have any material effect on the Company's operations for
1997 and 1996.  During 1995, Summit experienced cost increases for paper
and postage used in its catalog business.  These increases adversely
affected profitability.  The sale of Summit reduced the Company's exposure
to increased costs of paper and postage.  Also during 1995, cost increases
for plastic and formed metal parts had a negative impact on margins.  The
Company attempts to mitigate the impact of cost increases by evaluating its
suppliers, by increasing its effectiveness, and by adjusting its selling
prices.  While the Company does not expect inflation to have a material
impact on 1998 operations, there are no guarantees that future cost
increases would not have an adverse impact.

The Company historically has experienced significant seasonality in its
sales primarily due to the purchasing cycle of educational institutions. 
Historical trends indicate that the first and fourth fiscal quarters will
each generate approximately 20% of annual sales and the second and third
fiscal quarters will each generate approximately 30% of annual sales.

Other than the foregoing, management knows of no trends, demands, or
uncertainties that are reasonably likely to have a material impact on the
Company's results of operations.


Year 2000 Issue
---------------
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the year.  Any of the Company's
computer programs that have date-sensitive software may recognize a date
using "00" as the year 1900 rather than the year 2000.  This could result
in a system failure or miscalculation causing disruption of operations;
including among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business
activities.  

During 1996, the Company undertook an assessment of its entire computing
system, including hardware and software.  The Company determined that its
system had significant deficiencies with regard to ongoing maintenance
costs, processing speeds, and integration with new generation software.  It
was also determined that some of the Company's software was not Year 2000
compliant.  Accordingly, the Company commenced a project in 1997 to
evaluate and install new integrated manufacturing, customer service and
accounting software.  The new software will provide many new benefits as it
is "Windows" based and includes numerous capabilities not available in the
systems that it will replace. It will also be Year 2000 compliant. 

Simultaneous with the selection of the new software, the Company elected to
migrate from its existing "UNIX" servers to a "Windows NT" platform, and to
replace substantially all of its computer hardware.  The Company found that
switching from UNIX to Windows NT will substantially reduce future costs
for computer hardware.  Preparation, testing, and training for the new
system commenced early in 1998 and is expected to be completed by the end
of the year.

The cost of the replacement software is estimated at $100,000.  The cost
estimated for new hardware is $50,000.  Substantially all of the purchase
costs will be capitalized and depreciated over their estimated useful
lives.  Substantially all of the costs of the old software and hardware
have been fully depreciated.  Internal costs of modification and
installation are not expected to be material and will be expensed as
incurred.  Accordingly, the Company's costs to solve its Year 2000 problem
are not expected to have a material impact on the financial statements.

The Company has not initiated formal communications with its significant
suppliers and customers to determine the extent to which the Company is
vulnerable to those third parties' failure to remediate their own Year 2000
Issue.  At this time, it is considered unlikely that disruption at either a
customer or a supplier would have a material impact on the Company.  Over
the next twelve months, the Company will monitor the situation with its key
suppliers and customers.  The Company has determined that it has no
exposure to Year 2000 contingencies for the products it has sold.


Impact of Recently Issued Accounting Standards
----------------------------------------------
Statement of Financial Accounting Standards 130 "Reporting Comprehensive
Income" and Statement of Financial Accounting Standards 131 "Disclosures
About Segments of an Enterprise and Related Information" were recently
issued.  Statement 130 establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. 
Comprehensive income is defined to include all changes in equity except
those resulting from investments by owners and distributions to owners. 
Among other disclosures, Statement 130 requires that all items that are
required to be recognized under current accounting standards as components
of comprehensive income be reported in a financial statement that displays
with the same prominence as other financial statements.  Statement 131
supersedes Statement of Financial Accounting Standards 14 "Financial
Reporting for Segments of a Business Enterprise".  Statement 131
establishes standards on the way that public companies report financial
information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in
interim financial statements issued to the public.  It also establishes
standards for disclosures regarding products and services, geographic areas
and major customers.  Statement 131 defines operating segments as
components of a company about which separate financial information is
available that is evaluated regularly by the chief operating decision maker
in deciding how to allocate resources and in assessing performance.

Statements 130 and 131 are effective for financial statements for periods
beginning after December 15, 1997, and require comparative information for
earlier years to be restated.  Because of the recent issuance of these
standards, management has not fully evaluated the impact, if any, that the
standards may have on future financial statement disclosures.  Results of
operations and financial position, however, will be unaffected by
implementation of these standards.<PAGE>
<PAGE>
Item 7.   Financial Statements

The following financial statements are filed as part of this report
beginning on page F-1:

   1.  Independent Auditor's Report
   
   2.  Consolidated Balance Sheets as of December 31, 1997, and December 31,
        1996
   
   3.  Consolidated Statements of Operations for the Years ended December
        31, 1997, 1996, and 1995
   
   4.  Consolidated Statement of Stockholders' Equity for the period of
        January 1, 1995, through December 31, 1997
   
   5.  Consolidated Statements of Cash Flows for the years ended December
        31, 1997, 1996, and 1995
   
   6.  Notes to Consolidated Financial Statements


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

There were neither changes in accountants nor disagreements of the type
required to be reported under this Item between the Company and its
independent accountants, Hein + Associates LLP, during the fiscal years
ended December 31, 1997, or December 31, 1996.

<PAGE>
<PAGE>
PART III

Part III, Items 9, 10, 11, and 12, are incorporated herein by reference
from the Registrant's definitive proxy statement relating to its Annual
Meeting of Shareholders which will be filed in an amendment within 120 days
of December 31, 1997.
Item 13.   Exhibits and Reports on Form 8-K

 Exhibits  Exhibit No   Title
    1.         3.1      Articles of Incorporation
    1.         3.2      Articles of Amendment to Articles of Incorporation
    1.       3.2(b)     Articles of Amendment to Articles of Incorporation
                        dated April 21, 1987
    2.       3.2(c)     Articles of Amendment to Articles of Incorporation
                        dated February 19, 1990
    1.         3.3      By-Laws
    2.         4.1      American Educational Products, Inc. 1987 Incentive
                        Stock Option Plan, together with Option Agreement
    2.         4.2      American Educational Products, Inc. 1990 Incentive
                        Stock Option Plan, together with Option Agreement
    2.         4.3      American Educational Products, Inc. 1990 Employee
                        Stock Purchase Plan, together with Subscription
                        Agreement
    3.         4.4      American Educational Products, Inc. 1997 Stock
                        Incentive Plan, together with Option Agreement
    4.        10.1      Asset Purchase Agreement dated March 1, 1994, with
                        Churchill Films, Inc.
    5.        10.2      Asset Purchase Agreement dated December 20, 1995,
                        with Steck-Vaughn Publishing Corporation relating
                        to the sale of Summit Learning, Inc. assets
    6.        10.3      Asset Purchase Agreement dated June 17, 1996, with
                        New SVE, Inc. relating to the sale of AEP Media
                        Corporation assets

1.   Incorporated by reference from the Registrant's Post-Effective
     Amendment No. 5 to Registration Statement on Form S-18 filed with the
     Securities and Exchange Commission and which was declared effective on
     July 1, 1987.
2.   Incorporated by reference from the Registrant's Registration Statement
     on Form S-8 filed with the Securities and Exchange Commission which
     was declared effective on August 4, 1992.
3.   Incorporated by reference from the Registrant's Registration Statement
     on Form S-8 filed with the Securities and Exchange Commission on March
     17, 1998.
4.   Incorporated by reference from the Registrant's Current Report on Form
     8-K dated March 11, 1994 and filed with the Commission on March 24,
     1994.
5.   Incorporated by reference from the Registrant's Current Report on Form
     8-K dated December 20, 1995 and filed with the Commission on January
     4, 1996.
6.   Incorporated by reference from the Registrant's Current Report on Form
     8-K dated June 17, 1996, and filed with the Commission on July 3,
     1996.

Reports on Form 8-K

The Registrant filed no Current Reports on Form 8-K during the Fourth
Quarter ended December 31, 1997.<PAGE>
<PAGE>
            AMERICAN EDUCATIONAL PRODUCTS, INC. AND SUBSIDIARIES

                 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS




                                                                   PAGE
   INDEPENDENT AUDITOR'S REPORT                                     F-2

   CONSOLIDATED BALANCE SHEETS - December 31, 1997, and 1996        F-3

   CONSOLIDATED STATEMENTS OF OPERATIONS - For the Years Ended
     December 31, 1997, 1996, and 1995                              F-4

   CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 
     From January 1, 1995, through December 31, 1997                F-5

   CONSOLIDATED STATEMENTS OF CASH FLOWS - For the Years Ended 
     December 31, 1997, 1996, and 1995                              F-6

   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                       F-7


<PAGE>
<PAGE>
                        INDEPENDENT AUDITOR'S REPORT




Board of Directors
American Educational Products, Inc.
Boulder, Colorado


We have audited the accompanying consolidated balance sheets of American
Educational Products, Inc. and Subsidiaries as of December 31, 1997 and
1996, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the three years in the period ended
December 31, 1997.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
American Educational Products, Inc. and Subsidiaries as of December 31,
1997 and 1996, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.


HEIN + ASSOCIATES LLP  



Denver, Colorado
February 10, 1998


<PAGE>
<PAGE>
<TABLE>
<CAPTION>

            AMERICAN EDUCATIONAL PRODUCTS, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                      as of December 31, 1997, and 1996

                                              1997           1996
                                          ------------    -----------
<S>                                      <C>             <C>
 ASSETS
CURRENT ASSETS
 Cash                                    $    183,000    $   107,000 
 Trade receivables, net of
   allowance of $52,000 and $64,000         1,220,000        840,000 
 Royalty receivable                           119,000        144,000 
 Inventories                                2,540,000      2,475,000 
 Prepaid advertising costs                     38,000            -   
 Other                                        139,000         82,000 
                                         -------------   ------------
     TOTAL CURRENT ASSETS                   4,239,000      3,648,000 

PROPERTY AND EQUIPMENT, net                 2,247,000      2,681,000 

VIDEO LIBRARY, net                            359,000        512,000 

INTANGIBLE ASSETS, net                        169,000        361,000 

OTHER ASSETS                                  237,000        354,000 
                                          ------------   ------------
TOTAL ASSETS                              $ 7,251,000    $ 7,556,000 
                                          ============   ============
 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Note payable                            $  1,855,000    $ 1,080,000 
 Current maturities of long-term debt             -          428,000 
 Accounts payable                             533,000        752,000 
 Accrued expenses                             145,000        221,000 
     TOTAL CURRENT LIABILITIES              2,533,000      2,481,000 

LONG - TERM DEBT, less current
  maturities                                      -          907,000 

COMMITMENTS (Note 5)

STOCKHOLDERS' EQUITY
 Preferred stock; $0.01 par value;
   50,000,000 shares authorized;
   none issued or outstanding                     -              -   
 Common stock; $0.05 par value;
   100,000,000 shares authorized;
   922,872 and 915,449 shares issued
   and outstanding                             46,000         46,000 
 Additional paid in capital                 6,504,000      6,468,000 
 Accumulated deficit                       (1,832,000)    (2,346,000)
   TOTAL STOCKHOLDERS' EQUITY            $  4,718,000    $ 4,168,000 

TOTAL LIABILITIES AND STOCKHOLDERS'
  EQUITY                                 $  7,251,000    $ 7,556,000 
                                          ============   ============
See accompanying notes to consolidated financial statements
/TABLE
<PAGE>
<PAGE>
<TABLE>
<CAPTION>

            AMERICAN EDUCATIONAL PRODUCTS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
            for the Years ended December 31, 1997, 1996, and 1995


                                1997           1996           1995
                            ------------   ------------   ------------
<S>                         <C>            <C>            <C>
INCOME:
 Net sales                  $ 8,392,000    $ 8,501,000    $20,333,000 
 Cost of goods sold           5,232,000      5,586,000     11,985,000 
                            -------------  -------------  -------------
   Gross profit               3,160,000      2,915,000      8,348,000 

OPERATING EXPENSES:
 Advertising and catalog
   costs                         95,000        327,000      2,915,000 
 Other marketing                851,000      1,580,000      2,824,000 
                           -------------  -------------  -------------
   Total marketing              946,000      1,907,000      5,739,000 
 General and administrative   1,377,000      1,378,000      3,210,000 
 Impairment of assets              -              -         3,297,000 
                           -------------  ------------   -------------
     Total operating
     expenses                 2,323,000      3,285,000     12,246,000 
                           ------------   ------------   -------------
OPERATING INCOME (LOSS)         837,000       (370,000)    (3,898,000)

OTHER INCOME (EXPENSE):
 Gain (loss) on sale of assets      -         (307,000)     1,092,000 
 Other income                       -              -           84,000 
 Interest expense              (323,000)      (418,000)      (874,000)
                           -------------  -------------  -------------
     Net other income
        (expense)              (323,000)      (725,000)       302,000 
                           -------------  -------------  -------------
INCOME (LOSS) BEFORE
 INCOME TAXES                   514,000     (1,095,000)    (3,596,000)

 Income tax benefit                 -              -          620,000 

NET INCOME (LOSS)           $   514,000    $(1,095,000)   $(2,976,000)
                            ============   ============   ============
Basic Earnings (Loss)
 per Share                  $      0.56    $     (1.29)   $     (3.61)
                            ============   ============   ============
Diluted Earnings (Loss)
 per Share                  $      0.53    $     (1.29)   $     (3.61)
                            ============   ============   ============
Weighted average number of
 common shares outstanding      918,000        852,000        825,000 
Effect of dilutive 
 securities                      44,000           -              -    
                            ------------   ------------   ------------
Weighted average number of
 common shares outstanding
 plus dilutive securities       962,000        852,000        825,000 
                            ============   ============   ============
See accompanying notes to consolidated financial statements
/TABLE
<PAGE>
<PAGE>
<TABLE>
<CAPTION>

                        AMERICAN EDUCATIONAL PRODUCTS, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                             January 1, 1995, through December 31, 1997

                                                COMMON STOCK
                                                ------------
                                                             Additional    Retained
                                     Number                      Paid      Earnings
                                       of          Common         in     (Accumulated
                                     Shares         Stock       Capital     Deficit)        Total
                                  ------------ ------------  ------------ -----------  -----------
<S>                               <C>           <C>         <C>          <C>          <C>
Balance as of Jan 1, 1995            814,559    $   41,000  $5,905,000   $1,725,000   $7,671,000 

Sale of common stock under the
  employee stock purchase plan        10,612         1,000      85,000          -         86,000 
Exercise of options                    5,100           -        26,000          -         26,000 
Non-qualified stock options granted
  at less than fair market value         -             -        32,000          -         32,000 
Net loss                                -             -           -      (2,976,000)  (2,976,000)
                                 ------------   ----------- ----------- ------------  -----------
Balance as of Dec 31, 1995           830,271        42,000   6,048,000   (1,251,000)   4,839,000 

Sale of common stock under the
  employee stock purchase plan         5,023           -        28,000          -         28,000 
Exercise of options                    2,155           -         6,000          -          6,000 
Sale of equity units                  78,000         4,000     386,000          -        390,000 
Net loss                                -             -           -      (1,095,000)  (1,095,000)
                                 ------------   ----------- ----------- ------------  -----------
Balance as of Dec 31, 1996           915,449        46,000   6,468,000   (2,346,000)   4,168,000 

Sale of common stock under the
  employee stock purchase plan         1,423           -         6,000          -          6,000 
Exercise of options                    3,000           -        12,000          -         12,000 
Issuance of common stock
 for services                          3,000           -        18,000          -         18,000 
Net income                              -             -           -         514,000      514,000 
                                 ------------  ------------ -----------  -----------  -----------
Balance as of Dec 31, 1997           922,872    $   46,000  $6,504,000   $(1,832,000) $4,718,000 

See accompanying notes to consolidated financial statements
/TABLE
<PAGE>
<PAGE>
<TABLE>
<CAPTION>

            AMERICAN EDUCATIONAL PRODUCTS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
            For the years ended December 31, 1997, 1996, and 1995


                                      1997          1996         1995
                                  ------------   -----------  -----------
<S>                               <C>           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)                $  514,000    $(1,095,000)$(2,976,000)
 Adjustments to reconcile net income
 (loss) to cash provided by operating
 activities:
   Depreciation                      665,000       780,000     908,000 
   Amortization                      344,000       412,000     797,000 
   Impairment of assets                  -             -     3,297,000 
   Stock based compensation expense      -             -        32,000 
   Bad debt expense                   13,000        11,000      14,000 
   Royalty receivable adjustment      38,000           -           -   
   Change in deferred income taxes       -             -      (519,000)
   (Gain) loss on sale of assets         -         307,000  (1,092,000)
   Changes in operating assets and
    liabilities: 
     Decrease (increase) in operating
       assets: 
       Accounts receivable          (368,000)      653,000     (32,000)
       Income tax refunds receivable     -         304,000      13,000 
       Inventories                   (65,000)     (313,000)    885,000 
       Prepaid advertising costs     (38,000)        2,000     459,000 
       Other                          27,000       (82,000)    (27,000)
      Increase (decrease) in operating
       liabilities:
       Accounts payable             (219,000)     (183,000) (1,614,000)
       Accrued expenses              (76,000)     (392,000)     76,000 
                                  -----------   ----------- -----------
   Net cash provided by operating
    activities                       835,000       404,000     221,000 

CASH FLOWS FROM INVESTING ACTIVITIES:
 Proceeds from sale of assets            -       1,989,000   3,982,000 
 Purchase of property and equipment (235,000)     (280,000)   (424,000)
 Cost incurred for video production      -        (138,000)   (300,000)
 Net cash provided (used) by
  investing activities              (235,000)    1,571,000  3,258,000 

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from notes payable and
  and long term debt               3,186,000     1,228,000   1,209,000 
 Payments on notes payable and
  long term debt                  (3,746,000)   (3,666,000) (4,874,000)
 Net proceeds from common stock
  transactions                        36,000       424,000     112,000 
                                  -----------   ----------- -----------
 Net cash (used) by financing
  activities                        (524,000)   (2,014,000) (3,553,000)
                                  -----------   ----------- -----------
NET INCREASE (DECREASE) IN CASH       76,000       (39,000)    (74,000)
 Cash, at beginning of period        107,000       146,000     220,000 
                                  -----------   ----------- -----------
 Cash, at end of period           $  183,000    $  107,000  $  146,000 
                                  ===========   =========== ===========
See accompanying notes to consolidated financial statements
/TABLE
<PAGE>
<PAGE>
1.   NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:
   
   Nature of Business - American Educational Products, Inc. (AMEP or the
   Company) was organized as a Colorado corporation in 1986.  AMEP currently
   has two operating subsidiaries: Hubbard Scientific, Inc. (Hubbard), and
   Scott Resources, Inc. (Scott).  
   
   These financial statements also include information about two other
   subsidiaries that have been disposed.  During December 1995, AMEP sold
   substantially all the assets of Summit Learning, Inc. (Summit).  During
   June 1996, AMEP sold substantially all the assets of AEP Media
   Corporation, d.b.a. Churchill Media (Churchill).
   
   The Company sells a wide variety of educational products through multiple
   sales channels.  The Company's products include those developed and
   produced by the Company, as well as products manufactured by other
   companies.  The Company's customers include educational institutions,
   wholesalers, individual educators, and consumers.  Approximately 85% of
   the Company's sales are in the United States and the remainder are sold
   in various locations throughout the world.

   A summary of the Company's significant accounting policies follows:
   
   Principles of Consolidation - The consolidated financial statements
   include the accounts of the Company and its subsidiaries.  All
   significant intercompany accounts and transactions have been eliminated
   in consolidation.
   
   Revenue Recognition - Sales are recorded at time of shipment and an
   allowance is provided for returns.  

   Inventories - Inventories are valued at the lower of cost [using a
   standard costing system that approximates a first-in, first-out (FIFO)
   basis] or market, and consist of the following:

<TABLE>
<CAPTION>
                                                DECEMBER 31
                                      ------------------------------
                                         1997               1996
                                      ----------         ----------
<S>                                  <C>                <C>
Raw materials                        $  968,000         $ 1,095,000 
Work in process                         243,000             304,000 
Finished goods                        1,562,000           1,297,000 
Less Valuation allowance               (233,000)           (221,000)
                                    ------------        ------------
Total                                $2,540,000         $ 2,475,000 
                                    ============        ============
</TABLE>

   Property and Equipment - Property and equipment are stated at cost. 
   Depreciation is computed by the straight-line method over estimated
   useful lives ranging generally from 3 to 32 years.  During 1997, the
   Company reviewed the remaining useful lives and salvage values of all
   depreciable assets and adjusted the depreciation schedules for its new
   estimates.  The revised estimates reduced 1997 depreciation expense by
   $39,000 compared to the amounts that would have been recorded using the
   old estimates.  Depreciation expense was $665,000, $780,000, and
   $908,000, for the years ended December 31, 1997, 1996, and 1995,
   respectively.

   Maintenance and repairs are charged to expenses when incurred.  Property
   replacements and betterments that extend the life of assets, including
   reproduction masters for significant, non-routine product updates, are
   capitalized and subsequently depreciated.

   Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                DECEMBER 31
                                      ------------------------------
                                         1997               1996
                                      -----------        ----------
<S>                                  <C>                <C>
Reproduction masters                 $3,150,000         $ 3,040,000 
Plant machinery and equipment         1,650,000           1,572,000 
Office furniture and equipment          279,000             284,000 
Land and buildings                      737,000             734,000 
Computer hardware and software          395,000             366,000 
Vehicles and other                       21,000              12,000 
                                      6,232,000           6,008,000 
Less accumulated depreciation        (3,985,000)         (3,327,000)
                                     $ 2,247,000        $ 2,681,000 
                                     ===========         ===========
</TABLE>

   Video Library - The Company capitalizes costs incurred relating to the
   development of educational video products.  These costs are amortized
   over the estimated future unit sales of the video products on an
   individual film forecast computation method.  Estimated future unit sales
   of each video represent a significant estimate and are reviewed quarterly
   by the Company.  Amortization expense was $138,000, $262,000, and
   $384,000  for the years ended December 31, 1997, 1996, and 1995,
   respectively.  In 1995, the Company recorded an impairment allowance of
   $1,133,000 for the Churchill video library.  The impairment was recorded
   by reducing the cost of the library to its estimated fair value.
   
   As of December 31, 1997, and 1996, the video library consists of:

<TABLE>
<CAPTION>
                                                DECEMBER 31
                                      ------------------------------
                                         1997               1996
                                      ----------         -----------
<S>                                  <C>                <C>
Production costs - completed
  videos                             $  940,000         $   940,000 
Production costs - videos
  in process                                  0              15,000 
                                     -----------         -----------
Total video library                     940,000             955,000 
Accumulated amortization               (581,000)           (443,000)
                                     $  359,000         $   512,000 
                                     ===========         ===========
</TABLE>

   Intangibles - In the various acquisitions made by the Company, an
   allocation was made to copyrights for proprietary products acquired. 
   These costs are amortized over the estimated remaining lives of the
   products, or related copyrights, whichever is shorter.  The lives range
   from 2 years to 6 years.

   The Company has a covenant not to compete from the former owners of
   Hubbard.  The amount allocated to the covenant is being amortized over
   the six year life of the covenant, which is less than the estimated
   useful life.  The Company had a similar covenant from the former owners
   of Churchill.  In 1995, the Company recorded an impairment allowance of
   $405,000 for the Churchill covenant.  The impairment was recorded by
   reducing the cost and the accumulated amortization of the Churchill
   covenant to zero.
   
   A portion of the Churchill purchase price was allocated to goodwill. 
   This cost was being amortized over 15 years.  In 1995, the Company
   recorded an impairment allowance of $1,489,000 for goodwill by reducing
   the cost and accumulated amortization to zero.
   
   As of December 31, 1997, and 1996, intangible assets consist of:

<TABLE>
<CAPTION>
                                              1997
                                           ACCUMULATED
                             COST         AMORTIZATION         NET
                         ------------     -------------   -------------
<S>                      <C>             <C>              <C>
Copyrights               $    650,000    $   (491,000)    $   159,000 
Covenants                     653,000        (643,000)         10,000 
                          ------------    ------------    ------------
                         $  1,303,000    $ (1,134,000)    $   169,000 
                          ============    ============    ============
</TABLE>

<TABLE>
<CAPTION>
                                              1996
                                           ACCUMULATED
                             COST         AMORTIZATION         NET
                         -------------    -------------   ------------
<S>                      <C>             <C>              <C>
Copyrights               $    650,000    $   (388,000)    $   262,000 
Covenants                     653,000        (554,000)         99,000 
                         -------------    ------------    ------------
                         $  1,303,000    $   (942,000)    $   361,000 
                         =============    ============    ============

</TABLE>

   Prepaid Advertising Costs - Substantially all of the Company's
   advertising is through the mailing of catalogs.  The printing and mailing
   costs of catalogs are recorded as a current prepaid cost.  These costs
   are amortized to expense based upon individual cost pools using actual
   and estimated future revenues for each catalog.  
   
   All other advertising costs are expensed when the advertising first takes
   place.
   
   Long-Lived Assets - Management periodically assesses recoverability of
   all long-lived assets, including intangibles.  The assessment for
   impairment is performed whenever events or changes in circumstance
   indicate that the carrying value of an asset may not be recoverable.  The
   assessment compares the carrying value of the assets to the estimated
   future cash flows of the assets, exclusive of interest.  If an impairment
   is indicated, a provision is made to reduce the asset's carrying value to
   its estimated fair value.
   
   Fair Value of Financial Instruments and Concentration of Credit Risk -
   The carrying value of the Company's trade receivables and trade payables
   are considered to approximate fair value due to their short maturities. 
   The fair value of the Company's notes payable are considered to
   approximate fair value because the obligations have floating interest
   rates.
   
   The Company has a concentration of credit risk along educational lines. 
   Management believes that the allowance for doubtful accounts is
   sufficient to cover the related credit risk.
   
   Stock-Based Compensation - In October 1995, the Financial Standards
   Accounting Board issued a new statement titled Accounting for Stock-Based
   Compensation (SFAS 123).  SFAS 123 encourages, but does not require,
   companies to recognize compensation expense for grants of stock, stock
   options, and other equity instruments to employees based on fair value. 
   Companies that do not adopt the fair value accounting rules must disclose
   the impact of adopting the new method in notes to the financial
   statements.  Transactions in equity instruments with non-employees for
   goods and services must be reported using the fair value method.  The
   Company did not adopt the fair value accounting prescribed by SFAS 123
   for employee grants, but is subject to the related disclosure
   requirements.
   
   Income Taxes - The Company accounts for income taxes under the liability
   method of SFAS 109.  Deferred income taxes reflect the effect of
   temporary differences between the tax basis of assets and liabilities and
   the carrying value of those assets and liabilities for financial
   reporting purposes.  Deferred income taxes also reflect the value of net
   operating losses and an offsetting valuation allowance.  Tax effects are
   computed using the tax rates and laws enacted as of the balance sheet
   date.
   
   Earnings (Loss) Per Share - The earnings (loss) per share is presented in
   accordance with the provisions of Statement of Financial Accounting
   Standards No. 128, Earnings Per Share (FAS 128).  FAS 128 replaced the
   presentation of primary and fully diluted earnings (loss) per share (EPS)
   with a presentation of basic EPS and diluted EPS.  Basic EPS is
   calculated by dividing the income or loss available to common
   shareholders by the weighted average number of common shares outstanding
   for the period.  Diluted EPS reflects the potential dilution that could
   occur if securities or other contracts to issue common stock were
   exercised or converted into common stock.
   
   Use of Estimates - The preparation of the Company's consolidated
   financial statements in conformity with generally accepted accounting
   principles requires the Company's management to make estimates and
   assumptions that affect the amounts reported in these financial
   statements and accompanying notes.  Actual results could differ from
   those estimates.

   Supplemental Disclosures of Cash Flow Information -

<TABLE>
<CAPTION>
                                             December 31
                                --------------------------------------
                                  1997           1996         1995
                              ------------    -----------  -----------
<S>                           <C>            <C>           <C>
Cash payments for:
  Interest                    $    306,000   $  428,000    $  875,000 
                              ============= ============  ============
  Income Taxes                $          0   $        0    $        0 
                              ============= ============  ============

Non-cash investing and financing
  activities:
    Capital leases incurred
     in exchange for for
     equipment purchases      $          0   $        0    $   77,000 
                              ============= ============  ============
</TABLE>

   Impact of Recently Issued Accounting Standards - Statement of Financial
   Accounting Standards 130 Reporting Comprehensive Income and Statement of
   Financial Accounting Standards 131 Disclosures About Segments of an
   Enterprise and Related Information were recently issued.  Statement 130
   establishes standards for reporting and display of comprehensive income,
   its components and accumulated balances.  Comprehensive income is defined
   to include all changes in equity except those resulting from investments
   by owners and distributions to owners.  Among other disclosures,
   Statement 130 requires that all items that are required to be recognized
   under current accounting standards as components of comprehensive income
   be reported in a financial statement that displays with the same
   prominence as other financial statements.  Statement 131 supersedes
   Statement of Financial Accounting Standards 14 Financial Reporting for
   Segments of a Business Enterprise.  Statement 131 establishes standards
   on the way that public companies report financial information about
   operating segments in annual financial statements and requires reporting
   of selected information about operating segments in interim financial
   statements issued to the public.  It also establishes standards for
   disclosures regarding products and services, geographic areas and major
   customers.  Statement 131 defines operating segments as components of a
   company about which separate financial information is available that is
   evaluated regularly by the chief operating decision maker in deciding how
   to allocate resources and in assessing performance.
   
   Statements 130 and 131 are effective for financial statements for periods
   beginning after December 15, 1997, and require comparative information
   for earlier years to be restated.  Because of the recent issuance of
   these standards, management has not fully evaluated the impact, if any,
   that the standards may have on future financial statement disclosures. 
   Results of operations and financial position, however, will be unaffected
   by implementation of these standards.  
   
2.   IMPAIRMENT OF LONG-LIVED ASSETS AND ACQUIRED INVENTORY:

   During 1995, the Financial Accounting Standards Board issued Statement of
   Financial Accounting Standards No. 121, Accounting for Impairment of
   Long-Lived Assets (FAS 121).  The Company adopted FAS 121 during the
   fourth quarter of 1995.  

   As a result of operating losses, it was determined that certain assets
   acquired from Churchill Films, Inc., in 1994 and from Redco Science,
   Inc., in 1992 had suffered an impairment.  

   In accordance with the provisions of FAS 121, the future cash flows of
   the long-lived assets used by Churchill were estimated.  The future cash
   flows consist of future sales less costs of completing those sales and
   were not adjusted for a discount factor or interest charges.  The future
   cash flows so estimated were less than the carrying value of the video
   library and intangible assets, including goodwill.  An additional
   calculation was made to estimate the fair value of the assets.  Fair
   value was estimated as the present value of the future cash flows using
   an appropriate discount rate.  Carrying value exceeded estimated fair
   value by $3,027,000 and, accordingly, an impairment provision in that
   amount was included in the 1995 results of operations.

   An evaluation of Redco in 1995 determined that sales of certain products
   had decreased to an unprofitable level.  The carrying value of assets
   related to those products was reduced to zero by including $270,000 in
   the 1995 provision for asset impairment.  The provision of $270,000 was
   recorded by increasing accumulated depreciation of reproduction masters
   and plant equipment by $150,000 and by establishing an inventory reserve
   of $120,000.
   
3.   DIVESTITURES:

   Effective June 17, 1996, the Company sold substantially all of the assets
   of Churchill to an unaffiliated company.  The sale comprised all the
   assets used by Churchill for video production and distribution.  Total
   cash proceeds of the sale were $1,000,000.  In addition, the Company has
   the right to receive future royalties on Churchill titles sold by the
   purchaser during the next four years.  Royalties are calculated at 10% of
   sales and are subject to an aggregate ceiling of $750,000.  The Company
   recorded a $490,000 royalty receivable based upon its estimate of future
   sales (using historical sales decline curves) less a discount factor of
   11.5% for the time value of money. The Company utilized the proceeds to
   pay trade creditors and to reduce the outstanding balance on the
   Company's bank debt.  The Company recognized a loss of $384,000 on the
   sale.  Revenue of $905,000 and operating losses of $215,000 were
   attributable to Churchill's operations during the six months ended June
   30, 1996. Royalty payments received during 1997 were less than originally
   estimated and, accordingly, the Company reduced the royalty receivable
   carrying value by $38,000 to reflect its revised estimate of future
   royalties.
   
   Effective July 31, 1996, the Company sold the land and building occupied
   by Summit.  When the Company sold the assets of Summit in December, 1995,
   it retained ownership of the real estate and leased a portion of it to
   the purchaser of Summit.  The sale of the real estate provided
   approximately $1,000,000 in net proceeds that were used to pay trade
   creditors and reduce bank debt.  A gain of approximately $77,000 was
   realized on the sale.
   
   Effective December 1, 1995, the Company sold substantially all the assets
   of Summit to an unaffiliated company.  The sale comprised the assets used
   by Summit in connection with its catalog distribution business.  Total
   proceeds of the sale were $3,982,000.  The Company utilized the proceeds
   to pay all of Summit's outstanding accounts payable and to reduce the
   outstanding balance on the Company's line of credit.  The Company
   recognized a gain of $1,092,000 on the sale.  Revenue of $10,216,000 and
   operating income of $288,000 were attributable to Summit's operations
   during the year ended December 31, 1995.
   
4.   NOTES PAYABLE AND LONG-TERM DEBT:
   
   The Company has a $2,800,000 revolving line of credit pursuant to an asset-
   based financing agreement which expires April 30, 2000.  Borrowing under
   this line of credit bears interest at a floating rate plus 3% (totaling
   11.5% as of December 31, 1997).  Interest is payable monthly.  The
   principal balance was $1,855,000 at December 31, 1997.  The amounts
   available to be borrowed under the agreement are derived from a borrowing
   base formula as defined in the agreement relating to allowable inventory
   and accounts receivable.  As of December 31, 1997, the borrowing base
   formula would have limited borrowings to $2,547,000.  The line of credit
   is collateralized by substantially all of the Company's assets.
   
   During 1997, the Company obtained approval for an equipment leasing line
   of credit that will provide financing for $150,000 of capital
   expenditures.  Subsequent to year end, substantially all of the available
   financing was utilized to purchase a new computer system.  Amounts
   utilized under this arrangement will bear interest at approximately 10%
   and will be payable in 36 monthly installments.  
   
   The Company's long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                                      DECEMBER 31
                                             ----------------------------
                                                 1997           1996
                                             ------------  --------------
<S>                                          <C>          <C>
Note Payable, principal due in monthly
  installments of $27,800, plus additional
  quarterly principal payments equal
  to royalties received from the purchaser of
  Churchill. Accrued interest is payable
  monthly at prime plus 3%.  Collateralized
  by business assets.  Paid in full during
  1997.                                      $      -        $ 858,000 

Note Payable, due in monthly installments of
  $4,000, including interest at 8.1%.
  Collateralized by land and buildings.
  Paid in full during 1997.                        -           396,000 

Capital lease obligations, due in monthly
  installments with varying maturities.
  Paid in full during 1997.                         -           55,000 

Other                                               -           25,000 
                                            ------------   ------------
     Total                                          -        1,334,000 
     Less current maturities                        -         (428,000)
                                            ------------    -----------
     Long-term debt                          $      -        $ 906,000 
                                            ============   ============
</TABLE>

5.   COMMITMENTS:
   
   The Company leases office space, equipment, and warehouse facilities
   under noncancellable operating leases.  Total rental expense was
   $133,000, $184,000, and $282,000, for the years ended December 31, 1997,
   1996, and 1995, respectively.  Future minimum rental commitments at
   December 31, 1997, are as follows:

<TABLE>
<CAPTION>

                               <S>       <C>
                               1998      $   224,000 
                               1999           67,000 
                               2000           29,000 
                               2001            2,000 
                               2002            1,000 
                                         ------------
                               Total     $   323,000 
                                         ============
</TABLE>

   The Company has certain royalty agreements with third parties on various
   products.  Total royalty expense for the years ended December 31, 1997,
   1996, and 1995, was $109,000, $207,000, and $367,000, respectively.
   
6.   STOCKHOLDERS' EQUITY:
   
   Preferred Stock - The Company has authorized 50,000,000 shares of
   preferred stock.  These shares may be issued in series with such rights
   and preferences as may be determined by the Board of Directors.  None of
   the shares are issued and outstanding.
   
   Common Stock - On April 4, 1997, the Company's shareholders approved a
   one-for-five (1-for-5) reverse split on its $0.01 par value common stock. 
   The reverse split became effective on April 22, 1997.  As of that date,
   the par value of the Company's common stock was increased to $0.05 per
   share and the number of common shares outstanding was reduced from
   4,580,794 to 916,298.  The reverse split has been shown in the
   accompanying financial statements and notes as a retroactive adjustment
   giving effect to the split for all periods presented.
   
   During 1997, the Company issued a warrant dividend to existing
   shareholders.  The warrant dividend consists of one warrant for each
   share of common stock owned by shareholders of record on June 5, 1997. 
   Each warrant entitles its holder for a period of three years to purchase
   one additional share of the Company's common stock at an exercise price
   of $10.00 per share.  No voting rights have been attached to the warrant. 
   The Company retains the right to redeem the warrants upon 30 days notice
   for a redemption price of $0.01 per warrant in the event that public
   trading of the Company's common stock equals or exceeds 110% of the then
   current exercise price of the warrant for twenty consecutive days.  All
   of these warrants, amounting to 916,000, were outstanding at December 31,
   1997.

   A registration statement under the Securities Act of 1933 was filed
   regarding the warrants and was declared effective by the Securities and
   Exchange Commission in December, 1997.  The warrants were issued and
   began trading on December 5, 1997, on the NASDAQ Small Cap Market System
   under  the symbol  AMEPW.  NASDAQ informed the Company that, in its
   opinion, the ex-dividend date for these warrants should be December 5,
   1997, the day that trading commenced.  As a result of the delayed ex-
   dividend date, the Company may be required to issue additional warrants
   to disenfranchised shareholders who sold shares between June 5, 1997 and
   December 5, 1997.  The Company believes that approximately 50,000
   warrants were effected by the delayed date.  Issuing additional warrants
   would not have a material adverse impact on the financial statements.  

   During 1996, the Company sold 78,000 equity units for total proceeds of
   $390,000.  The proceeds were used to reduce bank debt and to provide
   additional working capital.  The equity units consist of one share of the
   Company's common stock plus a warrant to purchase one additional share of
   common stock.  During 1997, the exercise price of the warrants was
   adjusted from $5.00 per share to $4.50 per share to reflect updated
   market valuations.  The common stock was registered under the Securities
   Act during 1997.  The warrants are exercisable until October, 1999.  As
   of December 31, 1997, all 78,000 warrants were outstanding and
   exercisable.    
   
   Earnings per Share - The following is a reconciliation of basic and
   diluted earnings per share:
<TABLE>
<CAPTION>

                                 For the year ended December 31, 1997
                               ----------------------------------------
                                 Income         Shares        Per Share
                               (Numerator)   (Denominator)     Amount
                              ------------   -------------   -----------
<S>                           <C>            <C>            <C>
Basic EPS                     
 Income available to common
   shareholders               $    514,000        918,000   $     0.56 
                                                            ===========
Effect of dilutive options    
 Stock options                        -            29,000 
 Warrants                             -            15,000 
                               ------------    -----------
Diluted EPS
 Income available to common
   stockholders plus assumed
   conversions                $    514,000        962,000   $     0.53 
                              =============    ===========  ===========
</TABLE>

<TABLE>
<CAPTION>
                                 For the year ended December 31, 1996
                                 ------------------------------------
                                 Income         Shares        Per Share
                               (Numerator)   (Denominator)     Amount
                               ----------    -------------     ------
<S>                           <C>            <C>            <C>
Basic and Diluted EPS
 (Loss) available to common
   shareholders               $(1,095,000)   $    852,000   $   (1.29) 
                              =============  =============  ===========

</TABLE>

<TABLE>
<CAPTION>
                                 For the year ended December 31, 1995
                              ------------------------------------------
                                 Income         Shares        Per Share
                               (Numerator)   (Denominator)     Amount
                              ------------   -------------  -------------
<S>                           <C>            <C>            <C>
Basic and Diluted EPS
 (Loss) available to common
   shareholders               $(2,976,000)   $    825,000   $   (3.61) 
                              =============  =============  ===========

</TABLE>

   Options to purchase 161,700 shares of common stock were outstanding at
   December 31, 1997.  Of that total, 159,000 options had a dilutive effect
   on the 1997 earnings per share calculation.  For purposes of calculating
   diluted EPS, those options resulted 29,000 incremental shares determined
   using the treasury stock method.  The remaining 2,700 options had an
   anti-dilutive effect and were therefore excluded from the calculation of
   diluted EPS. The excluded options had an exercise price of $7.125 per
   share.
   
   The Company also had warrants outstanding at December 31, 1997 to
   purchase 994,000 shares of common stock.  Of that total, 78,000 warrants
   had a dilutive effect on the 1997 earnings per share calculation.  For
   purposes of calculating diluted EPS, those warrants resulted in 15,000
   incremental shares determined using the treasury stock method.  The
   remaining 916,000 warrants had an anti-dilutive effect and were therefore
   excluded from the calculation of diluted EPS.  The excluded warrants had
   an exercise price of $10.00 per share.
   
   The diluted earnings per share calculations for both 1996 and 1995
   excluded the effect of all options and warrants as the net losses for
   those two years resulted in an anti-dilutive effect for all such
   securities.
   
   ESPP - Substantially all of the Company's permanent full-time employees
   are eligible to participate in an employee stock purchase plan (ESPP),
   except those owning more than 5% of the Company's common stock or more
   than $25,000 in value of the Company's common stock.  In 1995, the
   stockholders increased the number of shares available under the ESPP to
   60,000.  Under the ESPP,  employees may purchase shares at 85% of the
   NASDAQ quoted market value on either the beginning or ending date of the
   six month enrollment period, whichever is less.  The number of shares
   purchased under the ESPP for each of the three years ending December 31
   were: 1,423 in 1997; 5,023 in 1996; and 10,612 in 1995.
   
   Stock Options - On June 2, 1997, the shareholders approved the 1997 Stock
   Incentive Plan.  The 1997 Stock Incentive Plan (the '1997 Plan')
   superseded the previously existing plan, the 1990 Incentive Stock Option
   Plan, and all activity under the 1990 was merged into the 1997 Plan.  The
   1997 Plan was created to conform with recent changes in securities and
   tax laws and regulations and to conform with new requirements of the
   NASDAQ Stock Market.
   
   The 1997 Plan authorizes the Board of Directors to issue incentive stock
   options to executive officers and key employees and to grant non-
   qualified stock options and/or stock purchase rights to officers,
   employees, former employees, directors, and consultants.  The options are
   generally granted for a five-year period with the exercise price based
   upon the market price of the Company's freely traded common stock on the
   date of the grant.  The total number of options authorized for issuance
   under the Plan is 179,300.  During 1997, the Board of Directors
   determined that 99,400 incentive and non-qualified stock options
   contained exercise prices in excess of amounts that were appropriate
   given the financial condition of the Company.  Accordingly, 50,900
   incentive stock options and 48,500 non-qualified stock options were
   terminated and subsequently re-issued with an exercise price of $4.50 per
   share.

   At December 31, 1997, the 78,700 incentive stock options outstanding
   under the 1997 Plan had exercise prices ranging from $3.875 to $7.125,
   exercisable as follows:

<TABLE>
<CAPTION>
                                                    WEIGHTED
              EXERCISABLE IN      NUMBER OF          AVERAGE
                   YEAR             SHARES       EXERCISE PRICE
              --------------     ------------     -------------
              <C>                <C>              <C>
                   1997             26,500            $4.50
                   1998             22,967            $4.35
                   1999             18,933            $4.55
                   2000             10,300            $4.16
</TABLE>

   The Company has issued non-qualified stock options under the terms of the
   1997 Plan.  During 1995, the Company issued 20,100 non-qualified stock
   options to its directors at 85% of fair value at the date of the grant,
   resulting in 1995 compensation expense of $32,000.  During 1996, the
   Company issued 22,400 non-qualified stock options to its directors at
   100% of fair value at the date of the grant.  During 1997, the Company
   issued 36,500 non-qualified stock options to its directors at 100% of
   fair value at the date of the grant.  No compensation expense was
   recorded in connection with the 1997 and 1996 grants.  All 83,000 non-
   qualified options outstanding at December 31, 1997, were exercisable.

   At December 31, 1997, there were 14,600 shares available for future
   grants under the existing Plan.

   The following is a summary of the number of shares under option:
<TABLE>
<CAPTION>


                                    NUMBER OF SHARES
                            --------------------------------
                             INCENTIVE    NON-                 WEIGHTED
                               STOCK    QUALIFIED              AVERAGE
                              OPTION      STOCK                EXERCISE
                               PLAN      OPTIONS      TOTAL      PRICE
                            ---------- ----------  ---------   ---------
<S>                         <C>        <C>         <C>         <C>
Balance, Jan. 1, 1995       $  96,600  $   6,000   $102,600      $16.85
   Options granted             52,880     20,100     72,980      $10.10
   Options exercised           (5,100)         0     (5,100)      $5.00
   Options terminated         (19,780)         0    (19,780)     $21.05
                           ----------- ----------  ---------
Balance, Dec. 31, 1995        124,600     26,100     150,700     $10.50
   Options granted             31,300     22,400     53,700       $6.30
   Options exercised           (2,160)         0     (2,160)      $2.95
   Options terminated        (100,540)         0   (100,540)     $10.15
                           ----------- ---------- ----------
Balance, Dec. 31, 1996         53,200     48,500    101,700       $7.90
   Options granted             81,800     85,000    166,800       $4.40
   Options exercised           (1,000)    (2,000)    (3,000)      $4.00
   Options expired             (1,300)         0     (1,300)     $11.25
   Options terminated        ( 54,000)   (48,500)  (102,500)      $7.82
                            ----------  --------- ----------
Balance, Dec. 31, 1997      $  78,700  $  83,000   $161,700       $4.40
                            ==========  =========  =========
</TABLE>

   Except as noted above, for all options granted during the period, the
   weighted average market price of the Company's common stock on the grant
   date was equal to the weighted average exercise price.  The weighted
   average remaining contractual life for all options as of December 31,
   1997, was approximately 4.0 years.  If not previously exercised or
   terminated, options outstanding at December 31, 1997, will expire as
   follows:

<TABLE>
<CAPTION>

                                      NUMBER       WEIGHTED AVERAGE
                       YEAR          OF SHARES      EXERCISE PRICE
                       ----        ------------       ------------
                       <C>        <C>                 <C>
                       1998              5,250               $4.50
                       1999              8,650               $4.50
                       2000             32,100               $4.50
                       2001             52,300               $4.50
                       2002             63,400               $4.25
</TABLE>

   Pro Forma Stock-Based Compensation Disclosures - The Company applies APB
   Opinion 25 and related interpretations in accounting for its stock
   options that are granted to employees and directors.  Accordingly, no
   compensation cost has been recognized for grants of options where the
   exercise price is not less than the fair value of the Company's common
   stock on the grant date.  Had compensation cost been determined based on
   the fair value at the grant dates for awards under those plans consistent
   with the method of SFAS 123, the Company's net income (loss) and earnings
   (loss) per share would have changed to the pro forma amounts indicated in
   the following table:
<TABLE>
<CAPTION>

                                           YEAR ENDED DECEMBER 31   
                                       -------------------------------
                                           1997              1996
                                       ------------      -------------
<S>                                    <C>              <C>
Net income (loss)
    As reported                        $    514,000     $ (1,095,000)
    Pro forma                               306,000       (1,220,000)

Earnings (loss) per common share
    As reported                               $0.56           $(1.29)
    Pro forma                                 $0.33           $(1.45)

</TABLE>

The fair value of each option granted was estimated as of the date of grant
using the Black - Scholes option pricing model with the following weighted
average assumptions:

<TABLE>
<CAPTION>
                                      YEAR ENDED DECEMBER 31
                                 ---------------------------------
                                     1997                1996
                                 ------------        -------------
<S>                              <C>                 <C>
Estimated fair value/share of
  options granted                      $2.23               $3.65 
Expected volatility                       59%                 64%
Risk free interest rate                  5.6%                6.0%
Expected dividends                     $0.00               $0.00 
Expected term (in years)                   5                   5 

</TABLE>

   7.   INCOME TAXES:
   
   The composition of income tax (benefit) for the years ended December 31
   was as follows:

<TABLE>
<CAPTION>

                             1997          1996          1995
                         ------------   ----------    ----------
<S>                      <C>            <C>           <C>
Current                  $        0     $       0     $(101,000)
Deferred                 $        0     $       0     $(519,000)
                         -----------    ----------    ----------
      Total              $        0     $       0     $(620,000)
                         ===========    ==========    ==========
</TABLE>

   The percentage tax benefits recorded for 1997, 1996, and 1995, were
   approximately 0%, 0%, and 17%, respectively.  Generally, the difference
   between the recorded percentages and the Federal statutory rate of 34% is
   primarily caused by the addition of state taxes (2% - 3%) offset by
   either limitations on the recognition of net operating loss (NOL)
   carryforwards or the utilization of said carryforwards.  Specifically,
   the Company recorded no income tax expense in 1997 as it was able to
   utilize NOL carryforwards to offset its taxable income.  In 1996, the
   Company did not recognize any income tax benefit as it had exhausted loss
   carryback provisions and was prohibited under SFAS 109 from recognizing
   uncertain future benefits of the NOL carryforwards.  In 1995, the Company
   recognized tax benefits to the extent of its available carrybacks.  
   The Company has the ability to carryforward its net operating losses and
   offset them against future taxable income, if any.  The NOL carryforwards
   approximate $3,300,000 and expire in the years 2009, 2010, and 2011. 
   Similarly, the Company has charitable contribution carryforwards of
   approximately $400,000 that expire in the same years.

   Deferred income taxes reflect the net tax effects of temporary
   differences between the carrying amounts of assets and liabilities for
   financial reporting purposes and the amounts used for income tax
   purposes.  The significant components of deferred tax assets and
   liabilities as of December 31 were as follows:

<TABLE>
<CAPTION>

                                                 1997           1996
                                             ------------   ------------
<S>                                          <C>            <C>
Deferred tax assets (liabilities):
  Current
      Accounts receivable                    $     20,000   $     19,000 
      Inventories                                  98,000         87,000 
      Prepaid advertising costs                   (14,000)             0 
      Other                                       (17,000)        (6,000)
  Long-term
      Property, plant and equipment              (515,000)      (554,000)
      Net operating losses                      1,218,000      1,556,000 
      Charitable contributions                    150,000         50,000 
                                               -----------   ------------
  Net deferred tax asset                          940,000      1,252,000 
  Valuation allowance                            (940,000)    (1,252,000)
                                               -----------   ------------
        Total                                 $         0   $          0 
                                               ===========   ============
</TABLE>

   Based upon past performance and statutory expiration dates, the ultimate
   realization of the NOL carryforwards is uncertain.  Accordingly, the
   Company has established a full valuation allowance against these
   carryforward benefits and will recognize the benefits only as
   reassessment indicates that they are realizable.  The need for this
   valuation allowance is subject to periodic review.  Should the allowance
   be reduced in a future period, the tax benefits of the carryforwards will
   be recorded at that time as a reduction of the Company's income tax
   expense.  The decrease of $312,000 in the valuation allowance during 1997
   is primarily due to partial utilization of the net operating loss
   carryforward.
<PAGE>
<PAGE>
                                 SIGNATURES

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

                     AMERICAN EDUCATIONAL PRODUCTS, INC.


   Date:  March 24, 1998                    /s/ Clifford C. Thygesen
                                            -------------------------------
                                            Clifford C. Thygesen, President

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

   Signature                           Title              Date


   /s/ Robert A. Scott        Chairman of the Board,      March 24, 1998
----------------------------   Secretary and Director
   Robert A. Scott


   /s/ Clifford C. Thygesen   President and Director      March 24, 1998
---------------------------- (Chief Operating Officer)
   Clifford C. Thygesen


   /s/ Frank L. Jennings        Vice President and        March 24, 1998
----------------------------    Assistant Secretary
Frank L. Jennings            (Chief Accounting Officer)


   /s/ Stephen G. Calandrella        Director             March 24, 1998
----------------------------
   Stephen G. Calandrella


   /s/ Richard J. Ciurczak           Director             March 24, 1998
----------------------------
   Richard J. Ciurczak


   /s/ Wayne R. Kirschling           Director             March 24, 1998
----------------------------
   Wayne R. Kirschling


   /s/ Steven B. Lapin               Director             March 24, 1998
----------------------------
   Steven B. Lapin


   /s/ Clifford L. Neuman     Assistant Secretary and     March 24, 1998
----------------------------         Director
   Clifford L. Neuman