SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20001
                                    FORM 10-K

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

For the fiscal year ended                            Commission File No. 0-11-50
      August 31, 1997

                              MAMMATECH CORPORATION
--------------------------------------------------------------------------------
             (exact name of registrant as specified in its charter)

         FLORIDA                                              59-2181303
--------------------------------------------------------------------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification Number)


         930 N.W. 8th Avenue, Gainesville, Florida 32601 (352) 375-0607
--------------------------------------------------------------------------------
               (Address including zip code, and telephone number,
                 including area code, of registrant's principal
                               executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class                                 Exchange on Which Registered
-------------------                                 ----------------------------

      None                                                       None

Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                ----------------
                                (Title of Class)

Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 13 of 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.

                                   Yes  x   No
                                      -----   -----

The aggregate market value of the Company's common stock held by  non-affiliates
as of November 30 was $357,274  based on the average bid and asked price.  As of
November  30,  there  were  100,352,500  shares of the  Company's  common  stock
outstanding. Of this sum, 6,208,500 shares are treasury shares.


Total Number of Pages: 37                           Exhibit Index is on Page: 35






                                        1

<PAGE>




                                     PART I
                                     ------

ITEM 1. DESCRIPTION OF BUSINESS
-------------------------------
INTRODUCTION
------------

     The Company owns all rights to, subject to certain minor royalties,  and is
engaged in the sale of a patented  breast tumor  detection  training system (the
"MammaCare  System").  Using  lifelike  models  of a human  female  breast,  the
MammaCare  System is designed to train women to perform  effective  Breast Self-
Examination  ("B.S.E.").  The breast models contain  simulated tumors of varying
sizes,  ranging from under 5mm. to over 10mm.  They also contain  material which
simulates the normal nodularity, or "lumpiness",  that characterizes most breast
tissue.

     Although  the  patient  can  never  determine  whether  a lump is benign or
malignant,  detection  of tumors in the size  range  simulated  by the models is
important to early diagnosis of malignancies. Thus, the Company believes that by
training women to palpate the breast model (and their own breasts) properly, the
MammaCare  System will lead to early  detection of breast cancer and thus reduce
morbidity and mortality due to this disease.

     The  MammaCare  System is sold in several  forms,  all of which  contain at
least one of the Company's  patented  breast  models.  Originally,  a client was
given  private  training  after which she was provided  with a take-home  breast
model and other materials.  Now, the customer may view a video tape developed by
the Company  which  teaches her the proper use of the  model(s) and an extremely
thorough examination technique. The practice model is designed to permit a woman
to reinforce her lump detection skills  periodically and serves as a comparative
standard as she palpates her own breast.

     The sale of  take-home  models,  together  with  training in the  Company's
method of B.S.E.,  was originally  accomplished  primarily through franchise and
license arrangements  (collectively referred to as "Franchises") with healthcare
providers.  In addition,  the Company owns and operates one MammaCare  Center in
Gainesville,  Florida.  Franchisees sell materials and provide training directly
to women, as does the Company at its own Center. To date, these franchisees have
been medical schools, hospitals, breast centers, and radiology clinics.

     In recent years,  development and marketing through new Franchises has been
de-emphasized   because  this  marketing   approach  proved  overly  costly  and
cumbersome for the returns it generated.  The Company has therefore  developed a
different  marketing strategy which involves the sale of an integrated  training
system known as the  MammaCare  Learning  System (the  "Learning  System").  The


                                        2

<PAGE>


Learning System is available in two versions, the Professional and the Personal,
and is comprised of one  (Personal)  or two  (Professional)  breast models and a
videotaped  B.S.E.  training  program  designed  to be viewed by women in either
their homes Personal) or in a clinical  setting  (Professional).  In both cases,
the skill learned is subject to ultimate evaluation by a physician.  See Item 1,
"New Marketing Approach".

THE PURPOSE OF BREAST SELF-EXAMINATION
--------------------------------------

     Manual  palpation  has been and  remains  the most  widely  used method for
detection of breast cancer in all stages of development.  The breast is an ideal
organ for physical  examination  because of the external location,  coupled with
the softness of the tissue and its hard  backing.  The earlier  breast cancer is
detected,  diagnosed and treated,  the greater the chances are for arrest of the
condition.  Published  studies  of breast  pathology  have shown that 94% of all
cancerous   tumors  of  the  breast  are  potentially   discoverable  by  manual
examination conducted by a properly trained person. Even though women themselves
remain the primary  discoverers  of breast  cancer,  several  reports  show that
B.S.E. is not widely practiced.  Consequently, most breast cancers are initially
detected at a relatively advanced stage with metastasis having already occurred.
The average size tumor that women  present to their  physicians is about 3.5 cm.
(over one inch) in diameter.  Treatment often requires a radical  mastectomy (an
extensive  surgical  procedure which includes removal of the breast,  underlying
muscle and  axillary  lymph nodes)  followed by a course of radiation  treatment
and/or  chemotherapy.  On the other hand,  if the disease is initially  detected
while  the  primary  tumor is small  (less  than 1.0 cm) and no lymph  nodes are
involved,  treatment  often  involves  only removal of the tumor and a margin of
surrounding healthy tissue. Thereafter, a course of radiation treatment is often
prescribed as a precautionary measure.


     In research  conducted at the  University of Florida under the direction of
the two principle shareholders of the Company, together with a third individual,
more than 445 women were taught to detect  tumors in the model ranging from 2 to
10 mm.  As a result  of this  training,  33 of  these  women  (7.4%)  discovered
suspicious masses and were referred to physicians. This percentage is comparable
to that expected from screening  procedures  involving  mammography and clinical
examination.

     The  research  was  conducted  at the  University's  Center for  Ambulatory
Studies.  Except for a National  Cancer  Institute  grant made  directly  to the
University in 1977 and one small direct  University  grant, the research was not
directly  sponsored  by  the  University;  instead,  it  was  concluded  at  the
University's  facilities  under the  supervision  of the Company's two principle


                                        3

<PAGE>


shareholders  (and a third  person)  as part of their  normal  faculty  research
duties. The University released its rights to this research.

     Based upon its commercial  experience with  approximately  10,000 women who
have had the benefit of MammaCare  training,  the Company has demonstrated  that
the MammaCare System can train women to detect masses as small as 0.3 cm. It has
been well  documented  that  detection of such small  masses  often  enables the
surgeon to provide treatment in the form of lumpectomy (see above) or some other
less extensive  procedure not requiring total removal of the affected breast and
surrounding tissue.

BASIC TRAINING MODEL AND TRAINING
---------------------------------

     The Company's  basic training model is a life-like  model of a human female
breast. Its covering is a thin silicone membrane which simulates human skin. The
interior of the model, also made of silicone, closely simulates that of a mature
female  breast with  respect to  granular,  glandular,  adipose  and  connective
tissue.  Implanted within the model are simulated tumors  consisting of extruded
polymers  whose  firmness   matches  that  of  excised  tumors.   The  model  is
manufactured  in different  degrees of firmness and nodularity in order to offer
the trainee a model which closely resembles her own breast.

     A special  series of training  exercises is used to instruct women in basic
palpation techniques required for manual self- examination for breast anomalies.
The basic  approach  is to: (1) teach the  distinction  between  the feel of all
varieties of normal breast tissue and that of typical breast tumors, (2) teach a
method of palpation  that insures  contact with all depths of the  trainee's own
breast tissue,  and (3) teach a pattern of examination that insures palpation of
all breast tissue.


COMPANY CENTER
--------------

     The Company's Center is located in Gainesville, Florida. This Center serves
three important  functions.  It is the national  training center  established to
provide training for all licensees,  physicians,  nurses,  and Company personnel
who are engaged in offering  MammaCare to the public.  Another  function of this
Center is to package and ship MammaCare Products.  Finally, this facility serves
as a research center  permitting the Company to undertake  marketing and product
development research.

     As part of the Company's  commitment to maintain the quality of its service
to both the  medical  profession  and women who need  B.S.E.,  the  Company  has
developed  two  training  programs  at the  Gainesville  Center.  The first is a
comprehensive, one-week training program leading to certification as a MammaCare


                                        4

<PAGE>


Specialist. Specialist certification is dependent upon a demonstrated mastery of
pertinent  selected  biological and medical  literature as well as the MammaCare
Method of performing and teaching manual breast examination.

     The second  training  program  leads to an Associate  certificate.  It is a
three-day  training  session for  physicians  and nurses  which  enables them to
instruct  women  in the  use of the  MammaCare  technique.  These  certification
procedures are used by the Company to control the quality of its training. It is
a matter of  resolute  Company  policy that a woman's  mastery of the  MammaCare
System will only be evaluated by a physician or MammaCare Specialist.  MammaCare
Specialists are empowered to train and certify MammaCare Associates at their own
sites.


MARKETING OF THE COMPANY'S SYSTEM AND MODELS
--------------------------------------------

     The MammaCare System and the MammaCare Learning Systems are each sold as an
integrated  whole.  The  Company  does not permit  models to be sold  separately
without each woman  receiving  appropriate  training,  either through the actual
training sessions required in connection with the MammaCare System,  through the
video training contained in either of the Learning Systems,  or through training
provided  by the  Arkansas,  California,  Florida,  and Maine  Divisions  of the
American Cancer Society in accordance with the Company's standards.

     During the last  several  fiscal  years,  the Company has  intensified  its
efforts to offer  MammaCare  overseas.  To date,  the  Company  has had sales of
approximately  $60,000 in Australia as a result of contacts made on the basis of
research  performed  and  published by the two  principals.  The Company  enjoys
relationships with a substantial  members of the Japanese and Korean health care
industries  (see p.  17  below).  The  Company  has  also  developed  continuing
customers  in France,  Germany,  and  Denmark  and is  presently  exploring  the
feasibility of entering into exclusive sales agreements with  representatives in
Western  Europe.  No  assurance  is given  that the  Company  will  successfully
penetrate these foreign markets.

     The  Company  has  developed  an  extensive  customer  base in  Canada  and
anticipates increased activity in that country as the trade barriers continue to
be  dismantled  as a result  of  NAFTA.  The  Company  has  trained  a number of
MammaCare   Specialists  who  live  and  work  in  Canada  and  maintains  close
professional ties to these individuals.



NEW MARKETING APPROACH
----------------------

     During the Spring of 1986,  the Company  concluded  that  Centers  were not
providing enough sales volume and not recruiting enough new users of the System.
After the end of 1986 fiscal  year,  the  Company  implemented  a new  marketing


                                        5

<PAGE>


strategy designed to encourage sales through  physicians.  Shortcomings with the
prior  marketing  approach  included the price of MammaCare (up to $125),  which
generally   was  not  covered  by  most  health   insurance   carriers  and  the
inconvenience women found with the training at the Centers.

     Under this new  marketing  approach,  health care  providers  purchase  the
MammaCare  Professional Learning System directly from the Company for $225 each.
The Company does not generate any revenues  from the use of the Learning  System
by women; its sole revenues under the new marketing  approach come from sales of
System and any accompanying training.

     The MammaCare  Professional Learning System consists of a teaching model, a
45-minute  video  cassette,  and practice kit. The teaching  model is a patented
breast  model,  designed  to teach the  difference  between  the feel of normal,
nodular breast tissue and the feel of small lesions.  The video cassette  guides
the learner through a series step-by-step  exercises,  first on the models, then
on her own breast tissue.  This is intended to lead to mastery level proficiency
in palpation,  search technique and lump detection.  The practice kit contains a
"take-home"  breast model, a written review  manual,  a reminder  calendar and a
record booklet.


     It is suggested that providers make the System  available to their patients
to use at a set fee. A patient  may  purchase  the  practice  kit portion of the
System for continued monthly reinforcement of her skills.  Patients may view the
videotape either in their homes or in the provider's facility. In either case, a
patient  should  have her  proficiency  reviewed  by a  physician  or  certified
MammaCare Specialist.

     By  obtaining  the  MammaCare  Learning  System  from their own  providers,
patients  are assured of receiving  the full  quality of  MammaCare  without the
inconvenience and expense of a lengthy clinic visit.  Further, it is anticipated
that the cost of  MammaCare to the public will be lower than  historical  prices
charged for this service. However, while the Company has made providers aware of
the need to keep the price of MammaCare  reasonable,  the  providers are free to
charge whatever fee they deem appropriate for the use of the System. In light of
the fact that most health insurance  policies do not reimburse  patients for any
portion  of  their  MammaCare  expenses,  no  assurance  can be  given  that the
physicians will set prices low enough to attract patients.

        

                                        6

<PAGE>


Providers who are  Franchisees  or licensees are permitted to purchase Kits at a
substantial  discount.  The  Company's  intent is for these  providers to act as
distributors to other  physicians and health care providers in their  respective
geographic  regions.  Patients  would then seek a  proficiency  evaluation  from
either their physician or the  Franchisee/provider.  Conceivably,  if additional
treatment  were needed,  the patient  would choose the  physician or health care
provider to furnish such treatment since a health care  relationship had already
been established.

     A  direct-to-physicians  marketing  approach was also developed  during the
Summer of 1986 and  implemented  in late  September  of the same year.  To date,
there are over 1000 physicians,  hospitals and diagnostic centers throughout the
United States  providing the Learning System to women.  Although it is too early
to judge whether it will be more successful than the Company's earlier marketing
strategies,  the  Company  believes  that this  marketing  approach  is superior
insofar as it eliminates certain prior deficiencies.  No assurances can be given
that this new  marketing  approach  will be  successful.  In any event,  for the
Company  to  maintain  profitability,  MammaCare  must  be  provided  to an ever
increasing number of women.

     Early in 1989,  the  Company  introduced  a  companion  product  called the
MammaCare Personal Learning System. It contains a single breast model, a 45-min.
video tape which  teaches the same skills as the  videotape in the  Professional
System but with reference to the single model, and assorted printed matter. This
System is being marketed  directly to women and was described in the August 1989
issue of Redbook and the  July-August  1991 issue of the East West Journal.  The
Company is presently evaluating consumer response to this product and expects to
develop additional marketing strategies for it in the coming year. The MammaCare
Personal Learning System is sold for $69.50, making it affordable and convenient
for working  women and others who are unable to schedule  and keep  appointments
with health care providers.

     In 1993, the Company  introduced a third version of MammaCare  known as the
MammaCare Clinical Learning System.  This system is used to train physicians and
other health care providers to conduct  clinical breast  examinations  using the
MammaCare  Method. It is being adopted by medical schools,  teaching  hospitals,
and a small  number  of HMO's  who are  attempting  to  control  costs by taking
advantage  of the benefits of competent  manual  examination  of the breast as a
means of early cancer detection.



OTHER MARKETING APPROACHES
--------------------------

     It is part of the Company's overall  marketing  strategy to arrange for the
availability of MammaCare wherever women routinely seek health service.  To this
end, the Company has sought to penetrate  the  institutional  market and medical
departments of large corporations.  Limited resources have prevented the Company


                                        7

<PAGE>


from  pursuing  this  strategy   vigorously;   however,   the  General  Electric
Corporation  ("GE") has introduced  the  Professional  Learning  System into its
Fairfield,  Connecticut  headquarters  facility  where  it was  reportedly  well
received.  GE has purchased three Learning Systems for use in other  facilities.
Additionally,  Pacific Bell has  purchased a small number of MammaCare  Personal
Learning Systems for a trial program aimed at their female employees. Results of
that trial were  reported  in 1991 and were  judged  favorable  by Pacific  Bell
representatives.

     The Company is currently  negotiating with several other large corporations
to make  MammaCare  available  in their  health  care  facilities.  The  Company
believes that the addition of the MammaCare Personal Learning System may offer a
more attractive mechanism for providing MammaCare in the workplace. There can be
no  assurance,  however,  that either these  negotiations,  trial  programs,  or
related marketing efforts will result in significant revenue for the Company.

     Prior to 1988,the Company retained a Southern California nurse practitioner
as a marketing consultant for MammaCare.  This individual is employed by a large
health care concern in Beverly Hills,  California and is a nationally recognized
expert on BSE. She  appeared on the first  ABC-TV "Home Show" in February,  1988
where she described the MammaCare Learning System to a nationwide audience.  Her
organization  now uses  MammaCare in all of its breast  centers  under a special
agreement negotiated during 1992.

     Largely  as a result of the  efforts  of this  individual,  the  California
Division of the American Cancer Society  adopted  several  features of MammaCare
for  enhancement of their  national  Special Touch  program.  Specifically,  the
Company provides its patented training models to Special Touch  Facilitators who
have undergone  training  approved by the Company.  These  individuals  may also
purchase the Company's Home Practice Model for use by participants in California
A.C.S.  BSE training  programs.  In November of 1989,  the  California  Division
received an Honors  Citation  for its Special  Touch  Program  from the National
Office of the American  Cancer  Society.  To date,  the Company has shipped over
$100,000  worth  of  products  to  California  A.C.S.   chapters  or  affiliated
individuals under this arrangement.

     Similar  arrangements  have  been  concluded  with  the  Alabama,   Alaska,
Arkansas,  Connecticut,  Delaware,  Florida, Georgia, Indiana, Kansas, Kentucky,
Maine,  Minnesota,  New York,  Pennsylvania,  South  Carolina,  South Dakota and
Wisconsin  Divisions of the American  Cancer  Society.  In additional to nominal
revenues  associated with the initial  training  efforts,  the Company  received


                                        8

<PAGE>


approximately  $18,000  as the  result  of a  single  purchase  by the  Arkansas
Department of Public Health. Aggregate revenues from the other participating ACS
Divisions have now exceeded $100,000.

RESEARCH
--------

     The  University  of North  Carolina at Chapel  Hill has  received a federal
grant to train  all of its  residents  and  staff  physicians  in the  MammaCare
Method. The Company estimates that it will receive approximately $10,000 for the
sale of breast models and consulting fees. In addition,  the University of North
Carolina  has  received a separate  $1,117,992  grant  which  will  involve  the
training  of  approximately  200 local  physicians  to  upgrade  the  quality of
clinical  breast  screening  in the  greater  Wilmington  area.  In  addition to
mammography,  this project will also involve the  Company's  patented  MammaCare
System.  This project is  currently in its final phase and is results  should be
available  soon.  Estimated  model  sales  and  consulting  fees did not  exceed
$35,000.

     Other   institutions  and  organizations   conducting   research  involving
MammaCare include Johns Hopkins  University,  the Fred Hutchinson Cancer Center,
the  University  of  California  at San Diego,  the  University  of Oregon,  the
University of Arkansas,  the University of Vermont,  the State University of New
York at Stony Brook,  the Harvard  Community  Health  Plan,  the  University  of
Cincinnati, the University of Indiana, the Fox Chase Cancer Center, Northwestern
University, the University of West Virginia and U.S. Healthcare.

PATENTS, TRADEMARKS AND COPYRIGHTS
----------------------------------

     The MammaCare System was invented by seven people,  including the Company's
two  principle  shareholders,  as part of research  activities  conducted at the
University of Florida. Subject to royalties payable to four of the co-inventors,
the Company owns all rights to and is entitled to receive all revenues  from the
System.  The  Company's  ownership  interest in the  patents and foreign  patent
applications is as follows:




Total Sale Volume of the System         Company's Percentage
-------------------------------         --------------------

$          1 to $ 5,000,000                    97.14%
$  5,000,001 to $ 7,500,000                    97.71%
$  7,500,001 to $10,000,000                    98.29%
$ 10,000,001 and over                          98.86%

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


                                        9

<PAGE>



     The Company's  position is that based upon  reasonable  expectations of the
parties, the above figures are for the life of the patent.


PATENTS
-------

     The  Company  is  the  assignee  of  the   following   patents  and  patent
applications directed to the Model and/or the System as indicated:


            Patent No.    Issue date
            or Appli-     or Filing     Expiration   Subject
Country     cation No.    Date          Date         Matter
-------     ----------    ----------    ----------   -------------

United      4,134,218     1/16/79       1/16/96      Model and
States                                               Methods and
                                                     Apparatus re-
                                                     lating to the
                                                     System


United        308,914     Filed                      New model re-
States                    2/9/89                     lating to the
                                                     system.



Canada      1,109,252     9/22/81       9/22/98      Model

Canada      1,147,951     Filed         6/14/2000    Methods and
                          6/14/83                    Apparatus re-
                                                     lating to the
                                                     System

United      2005894       5/26/82       10/2/98      Model
Kingdom



United      2077017       10/13/82      10/2/98      Methods and
Kingdom                                              Apparatus re-
                                                     lating to the
                                                     System


Germany     P 2844373.4   11/11/81      10/12/98     Model, as well
                                                     as certain appa-
                                                     ratus relating
                                                     to the System


                                       10

<PAGE>

            Patent No.    Issue date                                
            or Appli-     or Filing     Expiration   Subject        
Country     cation No.    Date          Date         Matter         
-------     ----------    ----------    ----------   -------------  

Germany(1)  Pending       Filed            -         Division appli-
            Application   2/25/80                    cation of the
            P 2857496.14                             application
                                                     which issued as
                                                     German Patent
                                                     No. P 2844373.4
                                                     and is directed
                                                     to methods and
                                                     apparatus rela-
                                                     ting to the system

Japan       1304322       6/15/85       10/11/98     Methods and
                                                     Apparatus rela-
                                                     ting to the System.

Japan(2)    Pending       10/26/84         -         Model allowed
            224,279/84                               and published
                                                     for opposition.
                                                     Opposition pro-
                                                     ceeding pending.

(1) The German  Patent  Office  has issued a notice of a decision  to grant this
application.  After the  application  is granted,  it will be published  for the
purpose of  opposition,  an  interested  person may oppose the  granting  of the
application within three months of the publication date.

(2) This application was allowed by the Japanese Patent Office and published for
opposition in September,  1985. In November, 1985, a Statement of Opposition was
filed on the ground that protection sought fro this model was overbroad and that
the Company's  model is not  sufficiently  novel or inventive  compared to other
models to  support a patent.  In  November,  1986,  the  Company  filed a repose
setting forth their position that the patent application  defines the model in a
manner that is  patentable  over all of the prior  models  known.  To date,  the
Japanese Patent Office has not acted on this matter.

     All of the foreign patents and patent applications have claimed the benefit
of the filing date of the application which issued as U.S. Patent No. 4,134,218,
namely,  October 11, 1977, under the Paris Convention of 1883 for the Protection
of Industrial  Property.  There is no assurance  that any of the pending  patent
applications will be issued as patents.








                                       11

<PAGE>















TRADEMARKS
----------

     The following  chart depicts the  trademarks  and  copyrights  owned by the
Company:


                                    Regis-
                                    tration
Type of Mark     Mark               Number          Status
--------------   -------------      ---------       ------

U.S. Trademark   The MammaCare      1,288,296       Issued
                 Method & Design                    7/31/84

U.S. trademark   The Mammatech      1,305,388       Issued
                 Corporation                        11/13/84

U.S. Trademark   MammaKit           1,317,844       Issued
                                                    2/5/85

U.S. Trademark   MammaTrainer       1,310,897       Issued
                 & Design                           12/25/84

U.S. Trademark   MammaTest          1,303,689       Issued
                 & Design                           11/6/84

U.S. Trademark   M & Design         1,310,918       Issued
                                                    12/25/84

U.S. Trademark   Hand Design        1,357,256       Issued
                                                    8/27/85

U.S. Trademark   MammaCare          1,445,641       Issued
                                                    6/30/87

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






                                       12

<PAGE>





COPYRIGHTS
                                   Regis-
                                   tration
Type                Name           Number        Effective for:
----------          ---------      -----------   --------------

Advertising         What Am I      TX1-199-545   75 years from
Brochure            Supposed to                  9/29/83
                    Feel?


Test Form           MammaTest      TX1-234-492   75 years from
                                                 12/14/83

Instructional       The MammaCare  TX1-259-524   75 years from
Manual              Method                       12/29/83


ITEM 2. PROPERTIES
------------------

     The Company's  facilities house its executive offices and MammaCare Center.
Located at 930 N.W. 8th Avenue, Gainesville,  Florida, the Company's offices are
approximately  2,700  square feet.  Rent is $1295.25  per month plus  utilities.
These facilities are adequate for the Company's current business operations. The
Company  does  not  anticipate   difficulties  in  obtaining  additional  office
facilities  in  Gainesville  at  comparable  rates  should   operations   expand
sufficiently.  The Company rents these  facilities  from an unrelated party on a
month-to-month basis.

     The Company owns a completely  equipped modular factory unit that is housed
within a  building  owned by RTS  Laboratories,  Inc.  (RTS),  a  non-affiliated
organization   located  in  Alachua,   Florida.   RTS  supplies   personnel  and
manufactures  the Company's models under contract,  using the Company's  modular
facility, materials, and equipment.

ITEM 3. LEGAL PROCEEDINGS
-------------------------

     There is no current or pending litigation involving the Company.



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

     Not Applicable.



                                       13

<PAGE>




                                     PART II
                                     -------

ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK EQUITY AND RELATED SHAREHOLDER
----------------------------------------------------------------------------
MATTERS
-------

     A.  Market  Information.  The  Company's  common  stock  is  traded  in the
over-the-counter  market.  From February 1983,  through December 1985, there had
been an  established  trading  market on NASDAQ for the Company's  common stock.
However,  in  mid-December  1985,  the  Company's  common stock was de-listed by
NASDAQ. The Company's common stock is currently listed in the National Quotation
Bureau "pink  sheets".  Throughout  1997, the bid value of the stock ranged from
$0.001 to $0.04.

     The following information concerning the National Quotation Bureau price of
the  Company's  common  stock has been  received  from  NASDAQ and the  National
Quotation Bureau.


     Quarterly Period        High Bid (1)           Low Bid (1)
     ----------------        ------------           -----------


     November 30, 1988          $   0.005              $   0.005
     February 28, 1989          $   0.01               $   0.0025
     May 31, 1989               $   0.01               $   0.01
     August 31, 1989            $   0.01               $   0.004
     November 30, 1989          $   0.01               $   0.0075
     February 28, 1990          $   0.01               $   0.005
     May 31, 1990               $   0.01               $   0.005
     August 31, 1990            $   0.01               $   0.001
     November 30, 1990          $   0.01               $   0.001
     February 29, 1991          $   0.01               $   0.001
     May 31, 1991               $   0.01               $   0.001
     August 31, 1991            $   0.01               $   0.001
     November 30, 1991          $   0.01               $   0.001
     February 29, 1992          $   0.01               $   0.001
     May 31, 1992               $   0.01               $   0.001
     August 31, 1992            $   0.01               $   0.001
     August 31, 1996            $   0.01               $   0.005
     August 31, 1997            $   0.01               $   0.001
-------------------------------

(1) Such over-the-counter market quotations reflect inter-dealer prices, without
retail  mark-up,  mark-down or  commission,  and may not  necessarily  represent
actual transactions.

     B. Holders of Common Stock. As of August 31, 1997, there were approximately
3,460  record  holders of the  Company's  common stock with  100,352,500  shares
outstanding, of which 6,208,500 shares are treasury stock.



                                       14

<PAGE>






ITEM 6. SELECTED FINANCIAL DATA
-------------------------------

Summary of Consolidated Statements of Operations
------------------------------------------------


YEAR ENDED         Aug.31,      Aug.31,       Aug.31,       Aug.31,      Aug.31,
                     1997         1996          1995          1994         1993
--------------------------------------------------------------------------------
Revenues from      438,755      331,688       301,524       269,208      195,563
Operations

Net Income         143,578       67,715        44,548        44,802     (77,479)
(Loss)

Income (Loss)            0            0             0             0            0
per Common
Share







Summary of Consolidated Balance Sheet
-------------------------------------



YEAR ENDED         Aug.31,      Aug.31,       Aug.31,       Aug.31,      Aug.31,
                     1997         1996          1995          1994         1993
--------------------------------------------------------------------------------
Total Assets       530,184      365,925       281,691       228,889      214,660

Total              112,825       98,396        81,877        73,623      125,197
Liabilities

Shareholder's      417,359      267,529       199,814       155,266       89,463
Equity








During these periods, no cash dividends were declared or paid.

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




                                       15

<PAGE>






ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULT
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

     Results of Operations.
     ----------------------

     The sales data for 1997 set yet another  record for the Company and extends
the trend established over the past several years.  Figure 1 shows this progress
since 1987, the first year the Company sold its products directly to the medical
profession rather than through its licensed centers.

[GRAPHIC OMITTED]

Figure 1. Sales Revenues for Mammatech Corporation:
               1987 - 1997.

     The 1997 sales total of $438,755  represents  an increase of 32.3% over the
previous year and a 45.5% increase over 1995. Export sales accounted for 7.4% of
the total,  up from 5.3% in 1996.A major portion of the sales total was $185,309
realized in the fourth quarter,  easily the best in the Company's history.  This
performance resulted in part from major purchases of MammaCare(R) products by an
organization providing medical training to military personnel in Europe.

     The Company's operating expense declined by 35.5% in comparison to 1996 and
increased by 3.5% over the 1995 figure.  The elevated 1996 figure was due to the
presence of increased  personnel  assigned to the SBIR Phase I grant during that
year.

     During the year,  the  Company  again  increased  its  customer  base while
continuing to serve its  established  customers.  A number of  additional  State
Health Departments  purchased product from the Company in connection with Breast
and Cervical  Cancer Program  (BCCP) grants from the Center for Disease  Control
(CDC). In particular, the CDC decided in 1997 to make grants available to all 50
state health  departments.  Accordingly,  in June a  conference  was held in St.
Louis to acquaint  officials  from the states with the  procedures  required for
implementing a BCCP program.  Representatives  from demonstration  projects,  as
well  as  Company  officials,  were  on hand to  provide  examples  and  advice.
Fortunately,  all of the demonstration projects had incorporated MammaCare(R). A


                                       16

<PAGE>


large number of  inquiries  immediately  occurred  and have  resulted in notable
sales.  The  Company  anticipates  continuing  sales of its  MammaCare  Clinical
Learning  System to these and other  BCCP  recipients  although  there can be no
assurance that such sales will materialize.

     During the year, the Company continued to provide specialized  training and
products to medical  personnel  from military  facilities  along the East coast.
There is a commitment on the part of all three US. Military  Service branches to
upgrade their breast cancer  screening  practices for the benefit of both female
military  personnel  and  dependents.  In  addition,  MammaCare is now in use in
military  installations  in  Europe  (see  above)  and the  Company  anticipates
continuing sales to this market. Of course,  there can be no assurance that such
sales will materialize.

     The Company  continues to hold a sales and  distribution  agreement  with a
member of the Korean  Health Care  industry.  At this  writing,  the Company has
completed  production  of Korean  versions of some of its training  products and
modest sales have begun.  Because of the current  financial turmoil in Asia, the
Company does not anticipate  substantial revenues from this source during fiscal
1998.

     The Company  negotiated a sales and  distribution  agreement  with a German
health care products company.  This agreement  provides  exclusive  distribution
rights for the Company's  products  throughout  Germany and the  German-speaking
portions of Austria,  Switzerland,  and Belgium.  In return, the distributor has
undertaken at its own expense to provide  translations of the Company's Personal
Learning  System  video tape and printed  materials.  The  distributor  has also
launched an  extensive  promotional  campaign in both the  electronic  and print
media.  Modest  sales have begun to occur,  but it is too early to forecast  the
extent of this market.

     Finally,  the Company sought and was awarded a Phase II grant in the amount
of $592,000 from the Small Business  Innovative  Research  (SBIR) Program of the
National  Institutes  of Health.  These funds will be  expended  over a two year
period to determine if the two  variations  of its MammaCare  Personal  Learning
System,  one for visually impaired women and one for the hearing impaired,  will
be acceptable for home use by women in these populations.

     Liquidity
     ---------

     At the close of the 1997 fiscal year, the Company's  current assets totaled
$479,840  compared  to  $312,087  at the  close of 1996.  Results  for the first
quarter of 1998, although not completely determined at the time of this writing,
portend no immediate decrease in this figure.

     The  Company  continues  to support its  operations  solely on the basis of
operating  revenues  and is  debt  free  but  for  its  note  for  $9,105  to an


                                       17

<PAGE>


unaffiliated  supplier for its manufacturing  facility.  The Company's principal
goal continues to be to make MammaCare available to all women at risk for breast
cancer  through  affiliations  with  capable  organizations  in the health  care
industry.

     Capital Resources.
     ------------------

     The Company has no material  commitment for capital  expenditures and there
are no known trends in its capital resources.






ITEM 8. FINANCIAL STATEMENTS 
----------------------------------------------------

                         REPORT OF INDEPENDENT AUDITORS


Board of Directors and Shareholders
Mammatech Corporation

We have audited the accompanying  balance sheets of Mammatech  Corporation as of
August 31, 1997, and 1996, and the related statements of operations,  changes in
stockholders'  equity,  and cash flows for each of the three  years then  ended.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing  the  accounting   principles  used  and   significant   estimates  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 financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Mammatech  Corporation as of
August 31, 1997, and 1996, and the results of its operations, and its cash flows
for each of the three years then ended,  in conformity  with generally  accepted
accounting principles.





                                   James E. Scheifley & Associates, P.C.
                                   Certified Public Accountants

Englewood, Colorado
September 24, 1997



                                       18


<PAGE>
<TABLE>
<CAPTION>






                               Mammatech Corporation
                                   Balance Sheets
                              August 31, 1997 and 1996


                                     ASSETS
                                     ------
                                                             1997               1996
                                                         -----------        -----------
Current assets:
<S>                                                      <C>                <C>        
  Cash                                                   $   169,088        $   179,651
  Available for sale securities                               82,752               --
  Accounts receivable - trade, net of allowance for
    doubtful accounts of $9,350 and $18,482                   62,745             34,287
  Accounts receivable - other                                  3,236              3,246
  Inventory                                                  162,019             94,903
                                                         -----------        -----------
      Total current assets                                   479,840            312,087

Property and equipment, at cost, net of
 accumulated depreciation of $147,390 and $140,115            49,082             52,277

Patents, trademarks and other intangibles, net of
 accumulated amortization of $64,675 and $64,376               1,262              1,561
                                                         -----------        -----------
                                                         $   530,184        $   365,925
                                                         ===========        ===========

                           LIABILITIES AND STOCKHOLDERS' EQUITY
                           ------------------------------------
                                                                            

Current liabilities:
  Current portion of long-term debt                            3,578              3,325
  Accounts payable - trade                                    38,722             21,594
  Accounts payable - officers                                  6,630              8,630
  Accrued expenses                                            58,368             55,624
                                                         -----------        -----------
      Total current liabilities                              107,298             89,173

Long-term debt - related party                                 5,527              9,223

Stockholders' equity:
 Common stock, $.0001 par value,
 200,000,000 shares authorized,
 100,352,500 shares issued and outstanding                    10,035             10,035
 Additional paid-in capital                                2,809,594          2,809,594
 Accumulated deficit                                      (2,260,471)        (2,404,049)
                                                         -----------        -----------
                                                             559,158            415,580
 Valuation allowance for marketable securities                 6,252               --
 Treasury stock, at cost, 6208,500 shares                   (148,051)          (148,051)
                                                         -----------        -----------
                                                             417,359            267,529
                                                         -----------        -----------
                                                         $   530,184        $   365,925
                                                         ===========        ===========



                     See accompanying notes to financial statements.

</TABLE>

                                             19

<PAGE>
<TABLE>
<CAPTION>


                                        Mammatech Corporation
                                       Statements of Operations
                               Years Ended August 31, 1997, 1996 and 1995

                                                          1997                 1996                    1995
                                                    -------------          -------------          -------------

<S>                                                 <C>                    <C>                    <C>          
Sales, net                                          $     438,755          $     331,688          $     301,524
Cost of sales                                             135,316                103,819                 99,415
                                                    -------------          -------------          -------------
Gross profit                                              303,439                227,869                202,109

Selling, general and administrative expenses              169,458                262,686                163,761
                                                    -------------          -------------          -------------
Income (loss) from operations                             133,981                (34,817)                38,348

Other income and (expense):
  Interest expense                                           (896)                  --                     --
    Other income                                             --                   97,846                   --
  Interest and dividend income                             10,493                  4,686                  6,200
                                                    -------------          -------------          -------------
                                                            9,597                102,532                  6,200

Income (loss) before income taxes                         143,578                 67,715                 44,548
Provision for income taxes                                   --                     --                     --

Net income (loss)                                   $     143,578          $      67,715          $      44,548
                                                    =============          =============          =============

Earnings (loss) per share:
 Net income (loss)                                  $        0.00         $         0.00         $         0.00
                                                    =============          =============          =============
 Weighted average shares outstanding                  100,352,500            100,352,500            100,352,500
                                                    =============          =============          =============




                                See accompanying notes to financial statements.


</TABLE>
                                                      20

<PAGE>



                              Mammatech Corporation
                        Statement of Stockholders' Equity
                   Years Ended August 31, 1997, 1996 and 1995

                                                                Additional  
                                      Common                     Paid-in    
                                      Shares        Amount       Capital    
                                   -----------   -----------   -----------    

Balance at August 31, 1994          80,352,500   $     8,035   $ 2,791,594

Issuance of common stock
 subscribed                         20,000,000         2,000        18,000

Net income for the year                   --            --            --   
                                   -----------   -----------   -----------
Balance, August 31, 1995           100,352,500        10,035     2,809,594

Net income for the year                   --            --            --   
                                   -----------   -----------   -----------
Balance, August 31, 1996           100,352,500        10,035     2,809,594

Increase in market value
 of securities                            --            --            --   

Net income for the year                   --            --            --   
                                   -----------   -----------   -----------
Balance, August 31, 1997           100,352,500   $    10,035   $ 2,809,594
                                   ===========   ===========   ===========



                See accompanying notes to financial statements.

                                       21

<PAGE>
<TABLE>


                                       Mammatech Corporation
                                  Statement of Stockholders' Equity
                              Years Ended August 31, 1997, 1996 and 1995
                                              (Continued)

                                     Common                      Securities                            
                                     Stock         Treasury      Valuation    Accumulated             
                                 Subscriptions       Stock        Reserve       Deficit         Total 
                                 -------------   -----------    -----------   -----------    ----------- 
                             
<S>                              <C>            <C>            <C>           <C>            <C>        
Balance at August 31, 1994        $    20,000    $  (148,051)   $      --     $(2,516,312)   $   155,266

Issuance of common stock
 subscribed                           (20,000)

Net income for the year                  --             --             --          44,548         44,548
                                  -----------    -----------    -----------   -----------    -----------
Balance, August 31, 1995                 --         (148,051)          --      (2,471,764)       199,814

Net income for the year                  --             --             --          67,715         67,715
                                  -----------    -----------    -----------   -----------    -----------
Balance, August 31, 1996                 --         (148,051)          --      (2,404,049        267,529

Increase in market value
 of securities                           --             --            6,252          --            6,252

Net income for the year                  --             --             --         143,578        143,578
                                  -----------    -----------    -----------   -----------    -----------
Balance, August 31, 1997          $      --      $  (148,051)   $     6,252   $(2,260,471)   $   417,359
                                  ===========    ===========    ===========   ===========    ===========







                            See accompanying notes to financial statements.
</TABLE>

                                                   22

<PAGE>
<TABLE>
<CAPTION>

                                           Mammatech Corporation
                                         Statements of Cash Flows
                                 Years Ended August 31, 1997, 1996 and 1995

                                                                 1997                1996                1995
                                                              ---------           ---------           ---------

<S>                                                           <C>                 <C>                 <C>      
Net income (loss)                                             $ 143,578           $  67,715           $  44,548
  Adjustments to reconcile net income (loss) to net
   cash provided by operating activities:
   Depreciation and amortization                                  7,574              17,910               9,595
Changes in assets and liabilities:
    (Increase) decrease in accounts receivable                  (28,448)             37,086              (3,935)
    (Increase) decrease in inventory                            (67,116)            (61,762)               (935)
    (Increase) decrease in other assets                            --                  --                  --
    Increase (decrease) in accounts payable                      17,128              (3,595)             (9,905)
    Increase (decrease) in accrued expenses                       2,744               7,566              21,358
                                                              ---------           ---------           ---------
           Total adjustments                                    (68,118)             (2,795)             16,178
                                                              ---------           ---------           ---------
  Net cash provided by                                             
   operating activities                                          75,460              64,920              60,726
                                                              ---------           ---------           ---------
Cash flows from investing activities:
   Investment in securities                                     (76,500)               --                  --
   Redemprion od certificate of deposit                            --                  --                50,000
   Acquisition of property and equipment                         (4,080)            (17,414)            (29,070)
   Acquisition of patents                                          --                (1,500)               --
                                                              ---------           ---------           ---------
Net cash (used in) investing activities                         (80,580)            (18,914)             20,930
                                                              ---------           ---------           ---------
Cash flows from financing activities:
   Repayment of officer loans                                    (2,000)               --                (3,200)
   Repayment of note                                             (3,443)             (3,057)               --
   Proceeds from notes payable - related party                     --                  --                  --
                                                              ---------           ---------           ---------
   Net cash (used in)
   financing activities                                          (5,443)             (3,057)             (3,200)
                                                              ---------           ---------           ---------
Increase (decrease) in cash
                                                                (10,563)             42,949              78,456
Cash and cash equivalents,
 beginning of period                                            179,651             136,702              58,246
                                                              ---------           ---------            --------
Cash and cash equivalents,                                         
 end of period                                                $ 169,088           $ 179,651           $ 136,702
                                                              =========           =========           =========
Supplemental cash flow information:
   Cash paid for interest                                     $     896           $   1,104           $    --
   Cash paid for income taxes                                 $    --             $    --             $    --


                                See accompanying notes to financial statements.


</TABLE>

                                                     23
<PAGE>



                              Mammatech Corporation
                            Statements of Cash Flows
                   Years Ended August 31, 1997, 1996 and 1995

                                                  1997       1996        1995
                                               --------    --------    --------

Supplemental cash flow information:
   Cash paid for interest                      $    896    $  1,104    $   --
   Cash paid for income taxes                  $   --      $   --      $   --


Non-cash investing and financing activities:

Realized loss on marketable securities                                 $ (5,187)
Acquisition of equipment with note payable                 $ 15,605
Increase in investment valuation reserve       $  6,252







                 See accompanying notes to financial statements.

                                       24

<PAGE>

                              Mammatech Corporation
                          Notes to Financial Statements
                                 August 31, 1997


Note 1. Summary of Significant Accounting Policies

A.  Organization  and  Operations:  Mammatech  Corporation  was  incorporated on
November  23,  1981,  and holds  patents on a breast  tumor  detection  training
system.  The system,  which  consists  of a breast  model and a method of breast
self-examination,  is  marketed  by the Company to  individuals  and  healthcare
professionals.

Inventories:
Inventories,  which consist  principally  of finished  goods,  are stated at the
lower of cost or market using the first-in, first-out method.

Property and Equipment:
Property and equipment are carried at cost.  Depreciation  and  amortization are
computed using the  straight-line  method over the estimated useful lives of the
assets ranging from 3 to 8 years. When assets are retired or otherwise  disposed
of, the cost and the  related  accumulated  depreciation  are  removed  from the
accounts,  and any resulting  gain or loss is  recognized in operations  for the
period. The cost of repairs and maintenance is charged to operations as incurred
and significant renewals or betterments are capitalized.

Patents, Trademarks, and Copyrights:
Patents, trademarks, and copyrights are amortized using the straight-line method
over their estimated useful economic lives of 10 years.  They are stated at cost
less accumulated amortization.

Revenue recognition:
The  Company  recognizes  revenue  on the sales of its  products  at the time of
shipment.

Earnings per share:
Earnings  per share is  computed  using the  weighted  average  number of common
shares outstanding for the periods presented.

Cash and cash equivalents:
Cash and cash  equivalents,  consist  of cash and term  deposits  with  original
maturities of less than 90 days.

Estimates:
The preparation of the Company's financial statements requires management to use
estimates and assumptions.  These estimates and assumptions  affect the reported
amounts in the financial statements and accompanying notes. Actual results could
differ from these estimates.


                                       25

<PAGE>


Fair value of financial instruments:
The  Company's  short-term  financial  instruments  consist  of  cash  and  cash
equivalents,  marketable securities, accounts and loans receivable, and payables
and accruals.  The carrying amounts of these financial instruments  approximates
fair value because of their short-term  maturities.  Financial  instruments that
potentially  subject  the  Company to a  concentration  of credit  risk  consist
principally  of cash,  marketable  securities  and accounts  receivable,  trade.
During the year the Company  maintained cash deposits at financial  institutions
in excess  of the  $100,000  limit  covered  by the  Federal  Deposit  Insurance
Corporation.

Stock-based Compensation
The Company  adopted  Statement  of Financial  Accounting  Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning with the Company's first
quarter of 1996.  Upon  adoption  of FAS 123 when  circumstances  requiring  its
application arise, the Company will continue to measure compensation expense for
its  stock-based  employee  compensation  plans using the intrinsic value method
prescribed by APB No. 25, Accounting for Stock Issued to Employees.

Advertising
Advertising expenses are charged to expense upon first showing.  Amounts charged
to expense were $2,252, $574 and $37 for the years ended December 31, 1997, 1996
and 1995, respectively.


Note 2. Related Party Transactions

The Company  occupies office and clinic space pursuant to a month to month lease
entered  into with a  shareholder  at a cost of $1,295  per month  plus  certain
common costs,  which  approximates  fair market value. Rent expense was $15,755,
$14,780,  and $12,730  for the years  ended  August 31,  1997,  1996,  and 1995,
respectively.

During  prior  years two  officers  of the  Company  made  advances  aggregating
$11,830.  During the years  ended  August 31,  1995 and 1997,  $3,200 and $2,000
respectively, of these advances were repaid.

During  September,  1994, the Company agreed to issue  20,000,000  shares of its
$.0001 par value common stock to two of its officers for  services.  The Company
recorded a $20,000  charge to operations  during the year ended August 31, 1994,
related to this issuance.
These shares were issued in 1995.

During February,  1989, an officer of the Company filed a patent application for
a product  representing a variation of the Company's  patented  models.  The new
product is an important part of the Company's product line.

                                       26

<PAGE>


The Company has entered into an agreement with this officer  whereby the Company
would enjoy exclusive and unrestricted use of the new product for the payment of
the patent  application  fees. The agreement was for a period of one year and is
automatically renewable for additional one year periods provided,  however, that
either party may cancel the  agreement  upon one months notice after the initial
year.


Note 3. Available for Sale Securities

During the year ended August 31, 1997, the Company  invested $76,500 (cost basis
using specific  identification  method) in government  securities  backed mutual
funds. The market value of the funds amounted to $82,752 at August 31, 1997. The
accumulated   amount  of  net  unrealized  holding  gains  applicable  to  these
securities, has been included as a separate component of stockholders' equity in
the accompanying  balance sheet This amount,  $6,252, also represents the change
in net unrealized holding gains for the year ended August 31, 1997.


Note 4. Property and Equipment

Property and equipment consists of the following, at cost, at August 31:

                                               1997         1996  
                                             --------     --------  
      Furniture and equipment                $180,618     $176,538
      Leasehold improvements                   15,854       15,854
                                             --------     --------
                                              196,472      192,392
      Less: accumulated depreciation          147,390      140,115
                                             --------     --------
                                             $ 49,082     $ 52,277
                                             ========     ========

Depreciation  charged to operations was $7,274,  $12,680,  and $3,529 during the
years ended August 31, 1997, 1996, and 1995, respectively.


Note 5. Note Payable

At August 31, 1997 the Company had an unsecured  note payable due to a vendor in
the  principal  amount of $9,105  with  interest  at 8% per annum and payable in
installments of $350 per month until paid.  Maturity of this note is as follows:
1998: $3,578; 1999: $3,875; 2000: $1,652.

                                       27

<PAGE>


Note 6. Commitments and Contingencies

In connection with the acquisition of the patent rights for the Company's system
of breast  self-examination,  the Company has paid $11,787 to the  University of
Florida for its release of all patent rights. In addition, 7 inventors also held
certain patent rights to the Company's process. Three of these individuals,  who
are  principal  shareholders  of the  Company,  contributed  their rights to the
Company.

The remaining four inventors have assigned their rights in certain models to the
Company in exchange for royalty  payments to be made based on sales. The related
sales were $297,947,  $78,198,  and $59,243 for the years ended August 31, 1997,
1996, and 1995,  respectively.  The related royalty expense was $8,581,  $2,252,
and $1,706 for the years ended August 31, 1997, 1996, and 1995, respectively.

The aggregate royalties payable to the inventors is as follows:

                                Sales                   Royalty
                     ---------------------------        -------
                     $        1  -   $ 5,000,000         2.86%
                     $5,000,001  -   $ 7,500,000         2.29%
                     $7,500,001  -   $10,000,000         1.71%
                     Over            $10,000,000         1.14%

The Company does not maintain product liability insurance related to its product
line.  It is unable to estimate  the risks and  possible  economic  consequences
related to its decision not to carry this type of insurance.


Note 7. Stockholders' Equity

During April,  1994,  the Company issued  1,000,000  shares of treasury stock to
certain  employees  and a vendor  for  services.  The  value  attributed  to the
services  was $1,000 and was based  upon the bid price of the  Company's  common
stock at the time it was issued ($.001 per share).  The  difference  between the
cost of the treasury stock ($24,000) and the charge to operations was charged to
paid in capital.


Note 8. Concentration of Credit Risk/Major Customers

During the year ended  August 31,  1997 the Company  made sales to the  American
Medical  Women's  Association  aggregating  $70,957 (16% of total  sales).  This
customer had a prepaid balance of $365 at August 31, 1997.

                                       28

<PAGE>


At August 31, 1997 the Company has $133,928 on deposit in uninsured money market
accounts.

The Company currently  utilizes a single  manufacturer for its products.  Should
this manufacturer be unable to meet the Company's demands it feels that it would
be able to locate another suitable manufacturer or manufacturers.

The Company made sales to customers  located in foreign  countries  amounting to
$32,476,  17,580 and $28,340  during the years ended August 31,  1997,  1996 and
1995, respectively.


Note 9. Other Income

During  1996 the  Company  received a federal  grant in the amount of $97,846 to
develop  and adapt the  Company's  products  for use by women  with  vision  and
hearing impairments.


Note 10. Income Taxes

Deferred income taxes may arise from temporary differences resulting from income
and  expense  items  reported  for  financial  accounting  and tax  purposes  in
different  periods.  Deferred  taxes are  classified as current or  non-current,
depending on the  classifications  of the assets and  liabilities  to which they
relate.  Deferred taxes arising from temporary  differences that are not related
to an asset or liability are classified as current or  non-current  depending on
the periods in which the  temporary  differences  are  expected to reverse.  The
Company has not recorded the deferred tax asset  related to the  operating  loss
carryforward  (approximately $740,000) because it cannot reasonably estimate its
ability to utilize the loss carryforward. The deferred tax asset and the related
reserve decreased by approximately $49,000 for the year ended August 31, 1997.

At August 31, 1997, the Company had net operating loss carryforwards aggregating
approximately $2,187,000 which expire beginning as follows:

              1998:   $  39,000
              1999:   $ 738,000          2000:   $ 233,000
              2001:   $ 279,000          2002:   $ 280,000
              2003:   $ 228,000          2004:   $ 131,000
              2005:   $ 115,000          2006:   $  74,000
              2007:   $  54,000          2008:   $  16,000

                                       29

<PAGE>


The amounts shown for income taxes in the  statements of operations  differ from
the  amounts   computed  at  federal   statutory   rates.  The  following  is  a
reconciliation of those differences.

Year Ended August 31,
                                     1997     1996    1995
                                     ----     ----    ----
   Tax at federal statutory rates     34%      34%     34%
   Surtax exemption                  ( 7)     (16)    (19)
   Operating loss carryforward       (27)     (18)    (15)
                                     ----     ----    ----
                                      - %      - %     - %
                                     ====     ====    ====


Note 11. Subsequent Event

During  September 1997, the Company received final approval for a research grant
aggregating  $592,000 to offset the costs  associated  with a program to promote
breast  self-examination for disabled women. The grant was issued to the Company
by the US Department of Health and Human Services and has a two year term ending
September 29, 1999.







                                       30

<PAGE>


Item 9. Disagreements on Accounting and Financial Disclosure
------------------------------------------------------------

None



                                    PART III
                                    --------

Item 10. Directors and Executive Officers of the Company
--------------------------------------------------------

     The  following  persons are the  executive  officers  and  directors of the
Company.

Name                           Age          Position with the Company
----                           ---          -------------------------

Mark Kane Goldstein, Ph.D.      59          Chairman of the Board, Vice-
                                            President and Secretary

H. S. Pennypacker, Ph.D.        60          President and Director

Mary Bailey Sellers             49          Treasurer


     All directors serve until the next annual meeting of shareholders. There is
currently one vacancy on the Board of Directors.

Mark Kane Goldstein
-------------------

     Mark Kane Goldstein,  Ph.D.,  is Chairman of the Board,  Vice President and
Secretary  of the Company.  Dr.  Goldstein  provides  advice  concerning  policy
matters and general  assistance on a part-time basis. Dr. Goldstein was formerly
President  and  Chairman  of ACTV,  Gainesville,  Florida,  and is  currently  a
director of that  company.  ACTV is a publicly  held  company  with  diversified
interests in the television and communications businesses. From 1971 until July,
1982,  Dr.  Goldstein  was  employed  by  the  U.S.  Veterans  Administration  ,
Gainesville,  Florida,  as a research  scientist.  During this same period,  Dr.
Goldstein also was an Associate  Professor/Research  Scientist at the University
of Florida, Gainesville,  Florida, and Co- Director of its Center for Ambulatory
Studies.

     From  1978  through  May,  1984,  Dr.  Goldstein  was a member  of the City
Commission of Gainesville,  Florida  including 1980-81 when he served a one-year
term as Mayor.

     Dr. Goldstein received a B.A. in 1961 from Muhlenberg  College,  an M.A. in
1962 from Columbia University and a Ph.D. in 1971 from Cornell  University.  All
Degrees were in Psychology.




                                       31

<PAGE>



Henry Sutton Pennypacker, Ph.D.
-------------------------------

     Henry Sutton  Pennypacker,  Jr.,  Ph.D., is President and a director of the
Company.  He is currently  employed as President of the Company and as Professor
of Psychology at the  University of Florida.  Except for three months when he is
not teaching,  Dr. Pennypacker receives no compensation from the Company. He was
employed  on a  full-time  basis by the  Company  from the closing of its public
offering in February 1983 until August 16, 1987.  Since closing of the Company's
public  offering,  Dr.  Pennypacker  has  retained  his faculty  position at the
University of Florida where he supervised continuing research into the Company's
method of B.S.E.  on a very  limited-time  basis.  Dr.  Pennypacker was employed
there as a Professor of Psychology from 1970 to February 1983. He was the acting
Chairman  of the  Department  of  Psychology  from  June  1969 to 1970 and prior
thereto was an Associate Professor and Assistant Professor. In August, 1987, Dr.
Pennypacker  was  required to devote  more time to his  faculty  position at the
University of Florida in order to retain his tenure.

     Dr.  Pennypacker  is the author or  co-author  of four books and over fifty
articles and book chapters  dealing with various aspects of behavioral  research
and behavioral medicine. He is a past President of the International Association
for Behavior Analysis, the Society for Advancement of Behavior Analysis, and the
Florida  Association for Behavior Analysis.  On August 10, 1990, Dr. Pennypacker
received an award from the California Division of the American Cancer Society in
recognition  of his  "...pioneering  contribution  to breast  self-  examination
education."

     Dr. Pennypacker  received a B.A. and an M.A. from the University of Montana
in 1958 and 1960,  respectively,  and a Ph.D.  from Duke University in 1962. All
degrees were in Psychology.

Mary Bailey Sellers
-------------------

     Mary Bailey  Sellers has been  employed as  Controller by the Company since
September  1985.  She was  appointed  Treasurer in August 1986.  From April 1978
through November 1984, she was employed by Barnett Bank of Alachua County, N.A.,
and a predecessor bank as Vice President--commercial loans. Mrs. Sellers devoted
her time to her family from December 1984 through August 1985.

     Mrs.  Sellers  received a B.A.  in English  and  History in 1970 from Barry
College.




                                       32

<PAGE>



Item 11. Executive Compensation
-------------------------------

     The following table sets forth the cash remuneration paid or accrued by the
Company during the fiscal year ended August 31, 1996, to each executive  officer
whose total cash compensation  exceeded $60,000 and to all executive officers of
the Company as a group.

                       Cash Compensation Table

          A                       B                   C
----------------------------------------------------------------
Name of individual          Capacities in          Cash
or number of persons        which served           Compensation
in a group
All executive officers      All capacities         $32,500
as a group
(three persons) (1)

(1)  No  executive  officer  of  the  Company  received  more  than  $32,500  in
compensation during the fiscal year ended August 31,1997.

     Dr.  H. S.  Pennypacker,  Jr.,  President  of the  Company,  and  Dr.  Mark
Goldstein received nominal compensation  associated with their activities on the
research  grant during the 1996 fiscal year.  During 1995,  the Company  accrued
$18,000 in salary for Dr. Pennypacker. Mary Sellers receives a salary of $32,500
per year.

     During  September,  1992 the  Company  authorized  the  issuance of to H.S.
Pennypacker and M.K. Goldstein a total of 20,000,000 shares of common stock. The
Company valued these shares at $20,000. In addition, the Company accrued $20,000
in salary due to Dr. Goldstein.

     During August,  1994, the Company agreed to issue 20,000,000  shares of its
$0.0001 par value common stock to two of its officers for services.  The Company
recorded a $20,000  charge to its  operations  during the year ended  August 31,
1994, related to this issuance.

     During April,  1994, the Company issued 500,000 shares of treasury stock to
certain  employees for services.  The value  attributed to the services was $500
and was based upon the bid price of the  Company's  common  stock at the time it
was issued ($0.001 per share).  The difference  between the cost of the treasury
stock ($12,000) and the charge to operations was charged to paid-in capital.

     All directors receive  reimbursement of expenses but no fees for serving as
directors.






                                       33

<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management
-----------------------------------------------------------------------

     The following  table sets forth,  as of Nov. 30, 1997, the number of shares
of common stock owned both of record and  beneficially by (i) all persons owning
five percent or more of the  outstanding  common stock of the Company;  (ii) all
directors, and (iii) all officers and directors as a group:

                                  Shares of           Percentage of
                                 Stock Owned        Outstanding Shares
----------------------------------------------------------------------

Mark Kane Goldstein, Ph.D. (2)    26,516,000              26.4%
930 N.W. 8th Avenue
Gainesville, Florida 32601

H. S. Pennypacker, Ph.D.          25,800,000              25.7%
930 N.W. 8th Avenue (1)(2)
Gainesville, Florida 32601

Mary Bailey Sellers                  400,000               4.0%
930 N.W. 8th Avenue
Gainesville, Florida 32601

All Officers and Directors
as a group (1)(2)

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

(1) All shares owned by Dr.  Pennypacker are owned by himself and his wife as to
which Dr. Pennypacker has shared investment and voting power.




Item 13. Certain Relationships and Related Transactions
-------------------------------------------------------

     On February 9, 1989,  Mark Kane  Goldstein,  an Officer and Director of the
Company,  filed Patent  Application  Serial No. 308,914 seeking protection for a
new breast  model that  represents  a  significant  variation  on the  Company's
patented  models.  The new breast model is an integral part of the Company's new
MammaCare  Personal  Learning  System.  The Company has entered into a licensing
agreement  with  Dr.   Goldstein   whereby  the  Company  enjoys  exclusive  and
unrestricted  use of the  invention in exchange for payment of costs  associated
with  preparation  and filing of the patent  documents  together  with  whatever
foreign patent protection the Company,  in consultation with Dr. Goldstein,  may
seek.





                                       34

<PAGE>



                                     PART V
                                     ------

Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form 8-K
---------------------------------------------------------------------------

(a) The following documents are filed as part of this Report on Form 10-K.

Financial Statements                          Pages 18 to 31


(b)  Reports on Form 8-K:  No  reports  on Form 8-K were  filed  during the last
quarter of the fiscal year ended August 31, 1997.

(c)  Exhibit Index: None


3       Articles of Incorporation*

3.1     Articles of Amendment to Articles of
        Incorporation*

3.2     By-Laws*

3.3     Amendments to By-Laws*

4       Warrants*

10.1    Patent Assignment Agreements*

10.2    H. S. Pennypacker Assignment*

10.3    Mark Kane Goldstein Assignment*





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


*Contained in the Company's registration statement of Form S-18 filed in October
27, 1982.

**Contained in Amendment No. 1 to the Company's registration statement
on Form S-18 filed on November 13, 1982.

***Contained in Amendment No. 3 to the Company's registration
statement  on Form S-18 filed on November 9, 1982.







                                       35

<PAGE>




                                   SIGNATURES
                                   ----------


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


                              MAMMATECH CORPORATION
                              ---------------------

By: /s/  H. S. PENNYPACKER, JR.
   ---------------------------------------------------------------------
                        H. S. Pennypacker, Jr., President

Date:  November 15, 1997

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 Company and in
the Capacities and on the dates indicated.


Signature                        Position or Office                  Date
---------                        ------------------                  ----


/s/  Mark Kane Goldstein       Chairman of the Board          November 15, 1997
--------------------------
Mark Kane Goldstein



/s/  H. S. Pennypacker, Jr.    President and Director         November 15, 1997
---------------------------
H. S. Pennypacker, Jr.



/s/  Mary Bailey Sellers       Treasurer                      November 15, 1997
----------------------------
Mary Bailey Sellers


                                       36