SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

         (Mark One)

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

     For Quarter Ended: September 30, 1997; or

     [   ] TRANSITION REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934 8 For the transition period _________ to __________

     Commission File Number: 33-55254-20

                              INTEGRAL HEALTH, INC.
             -----------------------------------------------------
             (Exact name of Registrant as specified in its charter)

              Nevada                                       87-0438452
-------------------------------             -----------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

  422 Flint Street, Reno, Nevada                                      89501
-----------------------------------------                           -----------
(Address of principal executive offices)                             (Zip Code)

                                 (702) 825-4342
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Alpaca, Inc. - 3098 South Highland Drive, Suite 460, Salt Lake City, Utah 84106
--------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)

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

     On September  30, 1997,  there were  1,000,000  shares of the  registrant's
Common Stock, $0.001 par value, outstanding.



<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

     The condensed  financial  statements  included herein have been prepared by
the  Company,  without  audit  pursuant  to the  rules  and  regulations  of the
Securities and Exchange Commission.  Certain information and footnote disclosure
normally included in financial  statements prepared in accordance with generally
accepted  accounting  principles have been condensed or omitted pursuant to such
rules and  regulations,  although the Company  believes that the disclosures are
adequate to make the information presented not misleading.

     In the opinion of the Company,  all adjustments,  consisting of only normal
recurring adjustments, necessary to present fairly the financial position of the
Company as of September 30, 1997 and the results of its  operations  and changes
in its financial  position from inception  through  September 30, 1997 have been
made. The results of its  operations for such interim period is not  necessarily
indicative of the results to be expected for the entire year.

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

     The  Company  has had no  operational  history  and has  yet to  engage  in
business of any kind.  All risks inherent in new and  inexperienced  enterprises
are inherent in the Company's business.  The Company has not made a formal study
of the economic potential of any business.  At the present,  the Company has not
identified any assets or business opportunities for acquisition.

     As of  September  30, 1997,  the Company has no liquidity  and no presently
available capital resources, such as credit lines, guarantees, etc. and should a
merger or acquisition prove unsuccessful, it is possible that the Company may be
dissolved by the State of Nevada for failing to file reports, at which point the
Company  would no longer be a viable  corporation  under Nevada law and would be
unable to function as a legal entity.  Should  management  decide not to further
pursue its acquisition activities, management may abandon its activities and the
shares of the Company would become worthless.  However,  the Company's officers,
directors and major  shareholder  have made an oral undertaking to make loans to
the  Company  in  amounts  sufficient  to enable  it to  satisfy  its  reporting
requirements and other obligations  incumbent on it as a public company,  and to
commence,  on a limited basis, the process of investigating  possible merger and
acquisition candidates.  The Company's status as a publicly-held corporation may
enhance its ability to locate  potential  business  ventures.  The loans will be
interest  free and are intended to be repaid at a future  date,  if and when the
Company shall have received  sufficient funds through any business  acquisition.
The loans are intended to provide for the payment of filing  fees,  printing and
copying fees and other miscellaneous fees.

     Based on current economic and regulatory  conditions,  Management  believes
that it is possible,  if not probable,  for a company like the Company,  without
assets  or  liabilities,  to  negotiate  a merger or  acquisition  with a viable
private company.  The opportunity arises  principally  because of the high legal
and  accounting  fees and the length of time  associated  with the  registration
process of "going public." However, should any of these conditions change, it is
very possible that there would be little or no economic  value for anyone taking
over control of the Company.

                                     Page 2
<PAGE>


                              INTEGRAL HEALTH, INC.
                             (formerly ALPACA, INC.)
                          (A Development Stage Company)
                                 Balance Sheets


<TABLE>
<CAPTION>
                                                  September 30,       Dec. 31,
                                                     1997              1996
                                                  ------------       ----------
                                                 (Unaudited)
<S>                                               <C>                 <C>
ASSETS

     CURRENT ASSETS
     Cash in bank                                 $     0            $     0
                                                  -------------      ----------

     TOTAL CURRENT ASSETS                               0                  0
                                                  =============      ===========

                                                  $     0            $     0
                                                  =============      ===========

LIABILITIES & EQUITY

     CURRENT LIABILITIES
     Accounts Payable                             $     0            $     0
                                                  --------------     -----------

     TOTAL CURRENT LIABILITIES                         -0-                -0-


STOCKHOLDERS' EQUITY Common Stock, $.001 par value:
     Authorized - 100,000,000 shares
     Issued & outstanding
     1,000,000 shares                                 1,000              1,000
     Additional paid-in capital                       1,000              1,000
     Deficit accumulated during
     the development stage                           (2,000)            (2,000)
                                                  ---------------    -----------

     TOTAL STOCKHOLDERS' EQUITY                         0                  0
                                                  ===============    ===========

                                                  $     0            $     0
                                                  ===============    ===========
</TABLE>


                                     Page 3

<PAGE>

                              INTEGRAL HEALTH, INC.
                             (formerly ALPACA, INC.)
                          (A Development Stage Company)
                            Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                        4/16/86
                      For the three months    For the Nine months      (Date of
                      ended September 30      ended September 30      inception)
                      1997            1996    1997           1996     to 9/30/97
                          Unaudited                   Unaudited        Unaudited
                      --------------------    -------------------     ----------
<S>                   <C>         <C>        <C>        <C>          <C>
Net Sale              $    0      $   0      $  0       $  0         $   0
Cost of sales              0          0         0          0             0
                      --------    --------   --------   ---------    ----------

GROSS PROFIT (LOSS)        0           0         0          0             0

General and
Administrative expenses    0           0         0          0            2,000
                      --------    --------   --------   ---------    ----------

NET INCOME (LOSS)     $    0        $  0      $  0       $  0         $ (2,000)
                      --------    --------   --------   ---------    ----------

Net income (loss)
per weighted          $  .00        $ .00     $ .00      $ .00
Average common shares --------    --------   --------   ---------    ----------


Weighted average number
common shares used
to compute net
income (loss)        1,000,000   1,000,000   1,000,000  1,000,000
                     ---------   ---------   ---------  ---------

</TABLE>

                                     Page 4
<PAGE>

                              INTEGRAL HEALTH, INC.
                             (formerly ALPACA, INC.)
                          (A Development Stage Company)
                       Statements of Stockholders' Equity
                                   (Unaudited)

<TABLE>
<CAPTION>

                                 Common Stock              Additional
                                Par Value $.001            Paid-in      Retained
                              Shares         Amount         Capital      Deficit
                              ---------------------        ---------------------
<S>                           <C>         <C>              <C>          <C>
Balances at 4/16/86
(Date of inception)             -0-       $   -0-          $   -0-      $  -0-

Issuance of common stock
(restricted) At $.002
per share at 5/27/86          1,000,000      1,000            1,000
Net loss for period                                                      (1,950)
                              ---------   ---------        ---------   ---------

Balances at 12/31/86          1,000,000      1,000            1,000      (1,950)
Net income for the year                                                  (   10)
                              ---------   ---------        ---------   ---------

Balances at 12/31/87          1,000,000      1,000            1,000      (1,960)
Net income for the year                                                  (   10)
                              ---------   ---------        ---------   ---------

Balances at 12/31/88          1,000,000      1,000            1,000      (1,970)
Net income for the year                                                  (   10)
                              ---------   ---------        ---------   ---------

Balances at 12/31/89          1,000,000      1,000            1,000      (1,980)
Net income for the year                                                  (   10)
                              ---------   ---------        ---------   ---------

Balances at 12/31/90          1,000,000      1,000            1,000      (1,990)
Net income for the year                                                  (   10)
                              ---------   ---------        ---------   ---------

Balances at 12/31/91          1,000,000      1,000            1,000      (2,000)
Net income for the year                                                     -0-
                              ---------   ---------        ---------   ---------

Balances at 12/31/92          1,000,000      1,000            1,000      (2,000)
Net income for the year                                                     -0-
                              ---------   ---------        ---------   ---------

Balances at 12/31/93          1,000,000      1,000            1,000      (2,000)
Net income for the year                                                     -0-
                              ---------   ---------        ---------   ---------

Balances at 12/31/94          1,000,000      1,000            1,000      (2,000)
Net income for the year                                                     -0-
                              ---------   ---------        ---------   ---------

Balances at 12/31/95          1,000,000      1,000            1,000      (2,000)
Net income for the year                                                     -0-
                              ---------   ---------        ---------   ---------

Balances at 12/31/96          1,000,000      1,000            1,000      (2,000)
Net income for the year                                                     -0-
                              ---------   ---------        ---------   ---------

Balances at 9/30/97           1,000,000   $  1,000         $  1,000    $ (2,000)
                              =+=======   =========        =========   =========

</TABLE>

                                     Page 5

<PAGE>
                              INTEGRAL HEALTH, INC.
                             (formerly ALPACA, INC.)
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                        4/16/86
                                        For the Nine months            (Date of
                                        ended September 30            inception)
                                        1997           1996           to 9/30/97
                                             Unaudited                Unaudited
                                        -------------------         -----------
<S>                                     <C>            <C>          <C>
OPERATING ACTIVITIES
     Net income (loss)                  $  -0-          -0-          $  (2,000)
     Adjustments to reconcile
     net income (loss) to cash
     used by operating activities:
     Amortization                          -0-          -0-                 50
                                        --------   ---------         -----------

     NET CASH PROVIDED (USED)
     BY OPERATING ACTIVITIES            $  -0-          -0-          $   (1,950)

INVESTING ACTIVITIES
Organization Costs                         -0-          -0-                 (50)
                                        --------   ---------         -----------

     NET CASH USED BY
     INVESTING ACTIVITIES                  -0-          -0-                 (50)

FINANCING ACTIVITIES
     Proceeds from sale of
     common stock                          -0-          -0-               2,000
                                        --------   ---------         -----------

     NET CASH USED BY
     FINANCING ACTIVITIES                  -0-          -0-               2,000
                                        --------   ---------         -----------

     INCREASE IN CASH
     AND CASH EQUIVALENTS                  -0-          -0-                 -0-

     Cash and cash equivalents
     at beginning of year                  -0-          -0-                 -0-
                                        --------   ---------         -----------
     CASH & CASH EQUIVALENTS
     AT END OF PERIOD                      -0-          -0-                 -0-
                                        ========   =========         ===========
</TABLE>
                                     Page 6

<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

     At the present time there are no legal proceedings  against the Company and
the Company is unaware of any unasserted  claim or assessment  which will have a
material effect on the financial position or future operations of the Company.

Item 2. Changes in Securities.

     Not required.

Item 3. Defaults Upon Senior Securities.

     Not required.

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

     Not required.

Item 5. Other Information.

     Not required.

Item 6. Exhibits and Reports on Form 8-K.

     (a) No exhibits have been filed with this Form 10-Q.

     (b) No other  reports on Form 8-K were filed during the last quarter of the
period covered.


                                     Page 7

<PAGE>


                                   SIGNATURES

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


                                             INTEGRAL HEALTH, INC.
                                             (Registrant)


 Date: November 4, 1997                     /S/ Dr. Graham Simpson
                                            ---------------------------
                                            By: Dr. Graham Simpson
                                            Its: President



Date: November 4, 1997                      /S/ Dr. Dell Marting
                                            ---------------------------
                                            By: Dr. Dell Marting
                                            Its: Chief Financial Officer



Date: November 4, 1997                      /S/   Dr. Dell Marting
                                            ---------------------------
                                            By: Dr. Dell Marting
                                            Its:  Secretary


                                     Page 7