UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION       
                              Washington, DC 20549

                                   Form 10-QSB

(Mark One)

         [X] Quarterly Report pursuant to Section 13 or 15(d) of the  
             Securities Exchange Act of  1934

                    For the quarter ended September 30, 1997

                                       or

         [ ] Transition Report pursuant to Section 13 or 15(d) of the  
             Securities Exchange Act of  1934

                For the transition period from _______ to _______

                         Commission File number 0-27646

                          Gum Tech International, Inc.
         --------------------------------------------------------------
        (Exact name of small business issuer as specified in it charter)

           Utah                                                 87-0482806
---------------------------------                         ----------------------
  (State or other jurisdiction                               (I.R.S. Employer
of incorporation or organization)                         Identification Number)

                            4205 North Seventh Avenue
                                    Suite 300
                             Phoenix, AZ 85013-3080
                     --------------------------------------
                    (Address of principal executive offices)

                                 (602) 277-0606
                            -------------------------
                           (Issuer's telephone number)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15 (d) of the  Exchange Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
                                                                Yes  X   No 
                                                                   -----   -----

There  are  5,836,460  shares of the  registrant's  common  stock,  no par value
outstanding as of October 31, 1997.


<PAGE>



                          GUM TECH INTERNATIONAL, INC.
                                   FORM 10-QSB

                                      INDEX

Part I  Financial Information                                       Page

        Item 1. Condensed Balance Sheet as of
                September 30, 1997                                     1

                Condensed Statements of Operations
                for the three months ended September 30, 1997
                and 1996                                               3

                Condensed Statements of Operations
                for the nine months ended September 30, 1997
                and 1996                                               4

                Condensed Statements of Cash Flows
                for the nine months ended September 30, 1997
                and 1996                                               5

                Notes to Condensed Financial Statements                6

        Item 2. Management's Discussion and Analysis of
                Financial Condition and Results of Operations          7

Part II Other Information and Signatures                              12







<PAGE>



                          GUM TECH INTERNATIONAL, INC.

                            CONDENSED BALANCE SHEET
                               September 30, 1997
                                  (Unaudited)

                                     ASSETS

Current Assets:
    Cash and cash equivalents                                      $  4,776,608
    Restricted Cash                                                      56,452
    Accounts receivable, net of
    allowance for doubtful accounts
      of $21,516                                                        987,796
    Inventories                                                       1,097,283
    Current portion of notes receivable                                 311,585
    Accrued interest                                                     59,763
    Prepaid expenses and other                                          157,592
                                                                   ------------

             Total Current Assets                                     7,447,079
                                                                   ------------

Property and Equipment, at cost:

    Machinery and production equipment                                3,436,409
    Office furniture and equipment                                      136,750
    Leasehold improvements                                              190,526
                                                                   ------------

    Total Property and Equipment                                      3,763,685

    Less accumulated depreciation                                      (890,574)
                                                                   ------------

           Net Property and Equipment                                 2,873,111
                                                                   ------------

Other Assets:
    Prepaid advertising                                               4,295,014
    Notes receivable                                                     66,000
    Intangible assets, net of
       accumulated amortization                                         225,144
    Deposits and other                                                  245,029
                                                                   ------------

           Total Other Assets                                         4,831,187
                                                                   ------------

           Total Assets                                            $ 15,151,377
                                                                   ============


                 The accompanying notes are an integral part of
                     these condensed financial statements.

                                       1

<PAGE>


                          GUM TECH INTERNATIONAL, INC.

                            CONDENSED BALANCE SHEET
                               September 30, 1997
                                  (Continued)
                                  (Unaudited)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities:
    Accounts Payable                                               $    359,718
    Accrued interest                                                     29,697
    Customer deposits                                                       816
    Current portion of long-term debt                                   230,544
                                                                   ------------

           Total Current Liabilities                                    620,775
                                                                   ------------

Long Term Debt, net of current portion above:

    Notes payable                                                     2,530,000
    Equipment Lease Obligations                                       1,315,349

           Total Long Term Debt                                       3,845,349
                                                                   ------------

Commitments and Contingencies                                              --

Stockholders' Equity:
    Preferred stock:  no par value,
     1,000,000 shares authorized,
     none issued or outstanding                                            --
    Common stock: no par value,
     10,000,000 shares authorized,
     5,761,460 shares issued and outstanding                         11,898,150
    (Accumulated deficit)                                            (1,212,897)
                                                                   ------------

           Total Stockholders' Equity                                10,685,253
                                                                   ------------

           Total Liabilities and Stockholders' Equity              $ 15,151,377
                                                                   ============


                 The accompanying notes are an integral part of
                      these condensed financial statements.

                                       2


<PAGE>

                          GUM TECH INTERNATIONAL, INC.

                       CONDENSED STATEMENTS OF OPERATIONS

                                  (Unaudited)


                                                       Three months ended
                                                          September 30,
                                                    ---------------------------
                                                        1997          1996
                                                    ---------------------------

Net Sales                                           $ 1,783,334    $   396,757

Cost of Sales                                           820,149        291,153
                                                    -----------    -----------

       Gross Profit                                     963,185        105,604

Operating Expenses                                      863,708      1,605,487
Research and Development                                 21,754        144,551
                                                    -----------    -----------

       Income  (Loss) From Operations                    77,723     (1,644,434)
                                                    -----------    -----------

Other Income (Expense):
  Interest and Other Income                              67,083         27,714
  Interest Expense                                     (120,006)       (41,816)
                                                    -----------    -----------

       Total Other Income (Expense)                     (52,923)       (14,102)
                                                    -----------    -----------

Income (Loss) Before Provision For Income Taxes          24,800     (1,658,536)

Provision (benefit) for income taxes                      --             --
                                                    -----------    -----------

Net Income (Loss)                                   $    24,800    $(1,658,536)
                                                    ===========    ===========

Net Income (Loss) Per Share of Common Stock:

  Primary:
     Weighted Average Number of Common
      Shares Outstanding                              6,653,686      4,879,566
                                                    ===========    ===========

     Net Income (Loss) Per Share of Common Stock    $      0.00    $     (0.34)
                                                    ===========    ===========

  Fully diluted:
     Weighted Average Number of Common
       Shares Outstanding                             6,950,711      4,879,566
                                                    ===========    ===========

     Net Income (Loss) Per Share of Common Stock    $      0.00    $     (0.34)
                                                    ===========    ===========

                 The accompanying notes are an integral part of
                      these condensed financial statements.

                                       3

<PAGE>
                          GUM TECH INTERNATIONAL, INC.

                       CONDENSED STATEMENTS OF OPERATIONS

                                  (Unaudited)


                                                        Nine months ended
                                                           September 30,
                                                    ---------------------------
                                                        1997           1996
                                                    ---------------------------

Net Sales                                           $ 6,194,689     $ 2,441,288

Cost of Sales                                         2,948,498       1,360,985
                                                    -----------     -----------

         Gross Profit                                 3,246,191       1,080,303

Operating Expenses                                    2,270,915       3,229,902
Research and Development                                 92,971         195,324
                                                    -----------     -----------

         Income  (Loss) From Operations                 882,305      (2,344,923)
                                                    -----------     -----------

Other Income (Expense):
   Interest and Other Income                            148,786          73,447
   Interest Expense                                    (314,166)       (179,427)
                                                    -----------     -----------

         Total Other Income (Expense)                  (165,380)       (105,980)
                                                    -----------     -----------

Income (Loss) Before Provision
  For Income Taxes                                      716,925      (2,450,903)

Provision (benefit) for income taxes                       --          (213,343)
                                                    -----------     -----------

Net Income (Loss)                                   $   716,925     $(2,237,560)
                                                    ===========     ===========

Net Income (Loss) Per Share of Common Stock:

  Primary:
     Weighted Average Number of Common
      Shares Outstanding                              6,143,529       4,278,128
                                                    ===========     ===========
      Net Income (Loss) Per Share
       of Common Stock                              $      0.13     $     (0.52)
                                                    ===========     ===========

  Fully diluted:
     Weighted Average Number of Common
      Shares Outstanding                              6,782,462       4,278,128
                                                    ===========     ===========
      Net Income (Loss) Per Share
       of Common Stock                              $      0.11     $     (0.52)
                                                    ===========     ===========

                 The accompanying notes are an integral part of
                     these condensed financial statements.

                                       4

<PAGE>
<TABLE>
<CAPTION>
                                   GUM TECH INTERNATIONAL, INC.

                                CONDENSED STATEMENTS OF CASH FLOWS

                                            (Unaudited)

                                                                      Nine months ended September 30,
                                                                    -----------------------------------
                                                                        1997                    1996
                                                                    -----------------------------------
Cash Flows From Operating Activities:

<S>                                                                 <C>                     <C>         
  Net income (loss)                                                 $   716,925             $(2,237,560)
  Adjustments to reconcile net income
    (loss) to net cash (used)
     by operating activities:
       Depreciation                                                     431,171                 317,446
       Amortization                                                      34,504                    --
       Deferred income taxes                                               --                  (215,412)
       Accrued interest on notes receivable                             (59,763)                (20,652)
       Changes in assets and liabilities:
        (Increase) decrease in accounts receivable                     (233,924)                303,452
        Decrease in income tax receivable                               234,440                    --
        Decrease (Increase) in inventories                              269,661                (560,654)
        Decrease (Increase) in prepaid
         expenses and other                                             658,439                 (60,241)
        (Increase) in prepaid advertising expenses                   (4,295,014)                   --
        Decrease (Increase) in deposits and other                       166,623                (120,049)
        (Decrease) in accounts payable and accrued expenses              (8,850)               (337,914)
        Decrease) in customer deposits                                  (64,684)                (36,959)
                                                                    -----------             -----------

        Net Cash (Used) By Operating Activities                      (2,150,472)             (2,968,543)
                                                                    -----------             -----------

Cash Flows From Investing Activities:

        Capital expenditures                                           (165,800)               (648,339)
        Decrease in notes receivable                                    (61,585)               (216,000)
                                                                    -----------             -----------

        Net Cash (Used) By Investing Activities                        (227,385)               (864,339)
                                                                    -----------             -----------

Cash Flows From Financing Activities:
        Proceeds from borrowing                                       2,530,000                 706,397
        Principal payments on notes payable                            (165,728)             (2,536,942)
        Issuance of common stock                                           --                 8,430,000
        Issuance of common stock upon exercise
         of options/warrants                                          4,121,768                    --
        Costs for issuance of common stock                             (188,678)                   --
        Debt issuance costs incurred                                   (259,648)                   --
        Offering costs incurred                                            --                (1,277,807)
                                                                    -----------             -----------

        Net Cash Provided By Financing Activities                     6,037,714               5,321,648
                                                                    -----------             -----------

        Net Increase in Cash and Cash Equivalents                     3,659,857               1,488,766

        Cash and Cash Equivalents at
            Beginning of Period                                       1,116,751                 503,327
                                                                    -----------             -----------


        Cash and Cash Equivalents at
           End of Period                                            $ 4,776,608             $ 1,992,093
                                                                    ===========             ===========

Supplemental Disclosure of Cash Flow Information:

        Cash paid during the period for:
           Interest                                                 $   209,515             $   286,790
           Income taxes                                                    --                    23,165

Supplemental Disclosure of Non Cash Investing
 and Financing Activities:
        Capital lease obligation incurred for new equipment
                                                                    $      --               $ 1,194,554


                             The accompanying notes are an integral part of
                                  these condensed financial statements.

                                       5
</TABLE>



<PAGE>

                                                               

                          GUM TECH INTERNATIONAL, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   The  accompanying  financial  information  of the  Company is  prepared  in
     accordance with the rules prescribed for filing condensed interim financial
     statements and,  accordingly,  does not include all disclosures that may be
     necessary for complete  financial  statements  prepared in accordance  with
     generally accepted  accounting  principles.  The disclosures  presented are
     sufficient,  in  management's  opinion,  to make  the  interim  information
     presented not misleading.  All adjustments,  consisting of normal recurring
     adjustments,  which are necessary so as to make the interim information not
     misleading, have been made. Results of operations for the nine months ended
     September 30, 1997 are not necessarily  indicative of results of operations
     that  may be  expected  for  the  year  ending  December  31,  1997.  It is
     recommended  that this  financial  information  be read  with the  complete
     financial statements included in the Company's Annual Report on Form 10-KSB
     for the year ended December 31, 1996  previously  filed with the Securities
     and Exchange Commission.

2.   Net income (loss) per share of common stock is computed  using the weighted
     average  number of common shares and common share  equivalents  outstanding
     during  the  periods  presented.   Common  share  equivalents  result  from
     outstanding options and warrants to purchase common stock.  Pursuant to the
     requirements  of the  Securities  and Exchange  Commission,  common  shares
     issued by the Company  during the twelve months  immediately  preceding the
     initial public offering,  plus the number of shares usable upon exercise of
     stock  options  granted  during  this  period,  have been  included  in the
     calculation  of the shares used in computing net income (loss) per share as
     if they were  outstanding  for all periods  presented  (using the  treasury
     stock  method  and the  estimated  public  offering  price  in  calculating
     equivalent shares).




                                       6

<PAGE>
                                                                    

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

Overview

     The  Company  was  organized  in 1991 to  develop,  market  and  distribute
specialty chewing gum products. The Company's first chewing gum product included
a natural caffeine substance marketed to runners and other exercise  enthusiasts
as a source of energy and  carbohydrates.  In 1994 and 1995,  the Company raised
funds  through  debt and equity  financings  which were used to  establish a new
management team, develop additional chewing gum products,  build inventories and
purchase  chewing gum  manufacturing  equipment for the Company's  28,000 square
foot manufacturing  facility which commenced operations in late March, 1996. The
facility  currently has 34 employees and by the end of 1996 the Company produced
100% of its chewing gum products.

     The  Company  distributes  its  branded  and  private-label   nutrient  and
therapeutic  chewing gum products to many of the nation's top drugstore  chains,
including Rite-Aid,  Walgreens, Drug Emporium, Longs, Thrifty,  Phar-Mor, Eckard
and Payless.  The Company also has  nationwide  distribution  in the mass market
chains (Target, Kmart, Meijer), major supermarket chains (Smith's , Lucky's) and
various  health  food  distributors.  In  addition,  the  Company is  increasing
distribution  and  further  expanding  its  presence  in  international  markets
including Japan,  Korea,  Russia,  Scandinavia,  and Europe. The Company is also
involved in many private label endeavors, including the research and development
of various nicotine and non-nicotine smoking cessation products.

Results of Operations for the Three Months Ended  September 30, 1997 Compared to
the Three Months Ended September 30, 1996.
--------------------------------------------------------------------------------

     The following table sets forth certain statement of operations  information
expressed  both in  dollars  and as a  percentage  of net sales for the  periods
indicated:

                                           Quarters Ended September 30,
                                           1997                     1996
                                    ------------------      --------------------
Net sales                           $1,783,334    100%        $396,757      100%
Cost of sales                          820,149     46          291,153       73
Gross profit                           963,185     54          105,604       27
Operating expenses                     863,708     49        1,605,487      405
Research and development                21,754      1          144,551       36
Income (Loss) from operations           77,723      4       (1,644,434)    (414)
Interest and other income               67,083      4           27,714        7
Interest expense                      (120,006)     7          (41,816)      11
Provision (benefit) for income taxes       -        -               -         -
Net income (Loss)                       24,800      1       (1,658,536)    (418)



                                       7
<PAGE>
                                                                    

     Net Sales. Net sales increased by $1,386,577 or 349%, to $1,783,334 for the
three months ended September 30, 1997, compared to $396,757 for the three months
ended  September  30, 1996.  The increase in sales was a result of the launch of
the Company's first smoking cessation  product,  CigArrest,  which accounted for
approximately  $600,000 in net sales. In addition,  $498,000 of discontinued and
excess  inventories  were sold pursuant to a barter  agreement  that the Company
entered into with SKR Resources,  Inc. in April,  1997. In September,  1997, the
agreement was amended to $796,000 from  $438,000.  The Company  receives  barter
credits  toward  advertising  and  other  expenses  in  consideration  for  such
inventories.  The  products  sold  in the  agreement  consisted  of  ChromaTrim,
CitrusSlim and DentaHealth.

     Cost of Sales.  Cost of sales, as a percentage of net sales,  decreased 27%
to $820,149 or 46% of net sales for the three  months ended  September  30, 1997
compared  to  $291,153  or 73% of net  sales for the same  period  in 1996.  The
primary reason for the decrease is the Company is  capitalizing on the economies
of scale for its chewing gum products.

     Gross Profit. Gross profit, as a percentage of net sales,  increased by 27%
to $963,185 or 54% of net sales for the three  months ended  September  30, 1997
compared  to  $105,604  or 27% of net  sales for the same  period  in 1996.  The
increase in gross profit percentage was directly related to the decrease in cost
of sales.

     Operating  Expenses.  Operating  expenses  were  $863,708,  a  decrease  of
$741,779  for the three  months ended  September  30, 1997  compared to the same
period in 1996. Approximately $440,340 of these operating expenses for the three
months ended  September 30, 1997,  were  attributable  to the  operations of the
manufacturing plant, of which, $134,000 were directly related to depreciation of
the  plant's  manufacturing  equipment.  Factors  contributing  to a decrease in
non-manufacturing  operating  expenses for the three months ended  September 30,
1997 were primarily  related to advertising of $426,089  versus $742,985 for the
same period in 1996. Other significant  non-manufacturing operating expenses for
the three months ended September 30, 1997 were  administrative  management labor
$190,159,  accounting,  legal and professional consulting fees $116,376,  travel
and trade shows $55,978,  general  administrative  labor $52,964 and sales labor
$35,422.

     Research  and  Development.  Research  and  Development  expenditures  were
$21,754 for the three months ended September 30, 1997,  compared to $144,551 for
the same  period in 1996.  The  majority  of these  costs  were  related  to the
formulation of the following:  a Ginseng gum, which helps maintain  overall good
health; an Antacid/Calcium  gum, which prevents,  helps and treats  osteoporosis
and prevents upset stomachs;  a newly  reformulated  Love Gum; and other various
private label dental, smoking cessation and body building cube gums.

     Interest and Other Income and Interest  Expense.  Interest and other income
was  $67,083 an increase of $39,369 for the three  months  ended  September  30,
1997,  primarily  as a result of an  increase  in working  capital  from  equity
financings that were invested in short-term  investments.  Interest  expense was



                                       8


<PAGE>


$120,006 an increase of $78,190 for the three months ended  September  30, 1997,
primarily  as a  result  of  the  Company  issuing  $2,530,000  of  subordinated
convertible notes in February and March, 1997.

     Net Income.  Net income  increased  to $24,800 for the three  months  ended
September 30, 1997  compared to a net loss of $1,658,536  for the same period in
1996.

Results of Operations  for the Nine Months Ended  September 30, 1997 Compared to
the Nine Months Ended September 30, 1996.
--------------------------------------------------------------------------------

     The following table sets forth certain statement of operations  information
expressed  both in  dollars  and as a  percentage  of net sales for the  periods
indicated:

                                           Nine Months Ended September 30,
                                             1997                   1996
                                     -------------------     -------------------
Net sales                            $6,194,689     100%     $2,441,288     100%
Cost of sales                         2,948,498      48       1,360,985      56
Gross profit                          3,246,191      52       1,080,303      44
Operating expenses                    2,270,915      37       3,229,902     132
Research and development                 92,971       1         195,324       8
Income (Loss) from operations           882,305      14      (2,344,923)    (96)
Interest and other income               148,786       3          73,447       3
Interest expense                       (314,166)      5        (179,427)      7
Provision (benefit) for income taxes        -         -        (213,343)      8
Net income (Loss)                       716,925      12      (2,237,560)    (92)

     Net Sales. Net sales increased by $3,753,401 or 154%, to $6,194,689 for the
nine months ended  September 30, 1997 compared to $2,441,288 for the nine months
ended  September 30, 1996. The increase in sales was primarily a result of $3.57
million of discontinued  and excess  inventories sold in a barter agreement that
the Company entered into in December,  1996 with Active Media Services, Inc. and
another barter agreement entered into in April, 1997 with SKR Resources, Inc. in
which the Company receives barter credits toward  advertising and other expenses
in  consideration  for  such  inventories.  Both  barter  agreements  have  been
completely  shipped  and  the  products  sold  in the  agreements  consisted  of
ChromaTrim, CitrusSlim, DentaHealth, Vita ACE and gum from the Jack LaLanne line
of products.

     Cost of Sales. Cost of sales, as a percentage of net sales, decreased 8% to
$2,948,498  or 48% of net sales for the nine months  ended  September  30, 1997,
compared  to  $1,360,985  or 56% of net sales for the same  period in 1996.  The
primary  reason for the decrease is the Company has  eliminated  its  dependence
upon outside manufacturers and is capitalizing on the economies of scale for its
chewing gum products.

     Gross Profit.  Gross profit, as a percentage of net sales,  increased by 8%
to $3,246,191 or 52% of net sales for the nine months ended  September 30, 1997,
compared  to  $1,080,303  or 44% of net sales for the same  period in 1996.  The
increase in gross profit was directly related to the decrease in cost of sales.



                                       9


<PAGE>
                                      
     Operating  Expenses.  Operating  expenses  were  $2,270,915,  a decrease of
$958,987  for the nine months  ended  September  30,  1997  compared to the same
period  in 1996.  Approximately  $1,223,124  of these  operating  expenses  were
attributable to the operations of the  manufacturing  plant, of which,  $417,592
were directly  related to depreciation of the plant's  manufacturing  equipment.
Factors contributing to a decrease in  non-manufacturing  operating expenses for
the nine months ended  September 30, 1997 were primarily  related to advertising
of $629,912  versus  $1,062,511 for the same period in 1996.  Other  significant
non-manufacturing  operating  expenses for the nine months ended  September  30,
1997 were  administrative  management  labor  $541,116,  travel and trade  shows
$282,865,  accounting,  legal and professional consulting fees $301,396, general
administrative  labor  $165,957,  art/production  fees  $125,471 and sales labor
$100,097.

     Research  and  Development.  Research  and  Development  expenditures  were
$92,971 for the nine months ended  September 30, 1997,  compared to $195,324 for
the same period in 1996.  The  majority of these costs for the nine months ended
September 30, 1997 were related to the formulation of the following: Vita ACES+,
an anti-oxidant  gum; Chew and Sooth Zinc gum, a throat soother;  High Gear, and
energy gum; Calcium gum, prevents,  helps and treats osteoporosis;  Ginseng gum,
helps  maintain  overall good health;  and other  various  private label dental,
smoking cessation and body building cube gums.

     Interest and Other Income and Interest  Expense.  Interest and other income
was  $148,786,  an increase of $75,339 for the nine months ended  September  30,
1997,  primarily  as a result of an  increase  in working  capital  from  equity
financings that were invested in short-term  investments.  Interest  expense was
$314,166 an increase of $134,739 for the nine months ended  September  30, 1997,
primarily  as a  result  of  the  Company  issuing  $2,530,000  of  subordinated
convertible notes in February and March, 1997.

     Net Income.  Net income  increased  to $716,925  for the nine months  ended
September  30,  1997  compared to a net loss  $2,237,560  for the same period in
1996.

Liquidity and Capital Resources

     As of September 30, 1997, the Company's  working  capital was $6.83 million
compared to $3.65 million at December 31, 1996.  For the nine month period ended
September 30, 1997, the Company experienced a decrease in cash used by operating
activities  of $2.15  million  primarily  as a result of an  increase in prepaid
advertising  expenses  related  to the  Active  Media  Services,  Inc.  and  SKR
Resources, Inc. barter agreements.

     Investing  activities  consumed  $227,385 in cash for the nine months ended
September 30, 1997 compared to $864,339 of cash used in the same period of 1996.
This was primarily from the acquisition of additional manufacturing equipment.


                                       10


<PAGE>
                                                                
     Financing  activities  provided  $6.04  million in cash for the nine months
ended  September  30, 1997 compared to $5.32 million in cash for the same period
in 1996.  The cash  provided  for 1996 was  primarily  a result  of the  Company
successfully  completing its Initial Public  Offering on April 24, 1996 less the
repayment of notes  payable.  The cash provided for 1997 was primarily  from the
exercise of the Company's Common Stock Purchase Warrants issued in the Company's
Initial  Public  Offering . The Company  called the Warrants for  redemption  in
July,  1997, and 457,400 of its 460,000  (99.43%)  Warrants were exercised at an
exercise price of $7.50 per share prior to the date set for redemption for total
gross  proceeds to the Company of $3,430,500.  In addition,  the Company sold an
aggregate  of $2.53  million of  convertible  debentures  in February and March,
1997.

Outlook

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

     The accumulated  advertising  credits resulting from the barter transaction
described   under   September  30,  1997  Results  of  Operations  and  totaling
approximately  $4.3  million  will be used over  approximately  the next two and
one-half years to advertise and promote  CigArrest,  a smoking  cessation gum as
well as other products  developed by the Company in the future. The Company also
expects to continue to support the reformulated ChromaTrim and CitrusSlim weight
loss/control gums and all other new products (i.e.  Calcium gum, Ginseng gum and
the Zinc Chew and Sooth  gums) with  various  advertising  campaigns  and direct
response.  During the fourth  quarter of 1997,  the  Company  has  committed  to
approximately $900,000 of advertising,  of which $360,000 will be paid by barter
credits.  Although the Company believes it will be able to use all of its barter
credits,  any barter credits unused within the two and one-half year period will
reduce future earnings by the amount of such unused barter credits.

     The $3.4 million received from the Common Stock Purchase Warrant redemption
will be added to the  Company's  working  capital  and may be used to expand and
completely  rebuild the Company's  manufacturing  and warehouse  facilities when
demand outstrips capacity.

     The  Company's  future  results of  operations  and other  forward  looking
statements contained in this section, in particular the statement(s)  concerning
plant  efficiencies and capacities,  capital spending,  research and development
and other expenses involve a number of risks and  uncertainties.  In addition to
the factors  discussed  above,  among the other  factors that could cause actual
results to differ  materially  are the  following:  business  conditions and the
general economy;  competitive factors, such as rival gum manufacturers'  pricing
and  marketing  efforts;   availability  of  third-party  material  products  at
reasonable prices; unused barter credits, if any; risk of nonpayment of accounts
receivable;  risks of  inventory  obsolescence  due to shifts in market  demand;
timing of product  introductions;  and litigation  involving product liabilities
and consumer issues.


                                       11

<PAGE>



                                                                           
Part II. Other Information

Item 1. Legal Proceedings
-------------------------

     On October 16, 1996, a lawsuit was filed  against the Company in the United
States District Court for the Central  District of California,  CV-95-9784.  The
action is entitled GCN Products, Inc. vs. Roy Kelly, et al. The complaint, as it
relates to the Company, principally alleges that the Company engaged in unlawful
rebates,  appropriations and overcharges,  commercial bribery,  fraud and unjust
enrichment.  Plaintiff  seeks  compensatory  and punitive  damages.  The Company
denies all allegations and intends to vigorously defend the suit.

     On December  11,  1996,  a complaint  was filed by Moira  Cervi-Skinner,  a
former  employee  of the  Company,  with  the  United  States  Equal  Employment
Opportunity  Commission  (EEOC) in  Phoenix,  Arizona  naming the Company and an
officer and director of the Company.  The  complaint  alleges  unwelcome  sexual
conduct and sex  discrimination as a condition of employment at the Company.  In
addition,  a demand  letter has been received  from the  complainant's  attorney
demanding $825,000.  There is no lawsuit filed at this time. The Company intends
to contest these allegations and all alleged damages vigorously if a suit should
be brought.  The Company  believes it is insured for its own attorneys  fees and
costs in this matter.

     On August 27,  1997, a lawsuit was filed by Paul R.  Janssens-Lens  against
Gum  Tech  International,  Inc.,  in the  case  of  Janssens-Lens  v.  Gum  Tech
International,  Inc.,  Kensington  Securities,  Inc.,  Kirtis Wyatt and Jane Doe
Wyatt in the Superior Court of Arizona, in and for the County of Maricopa,  case
number CV97-15896. The Jansenns-Lens lawsuit alleges both breach of contract and
tort actions,  including  intentional  interference  with  prospective  economic
advantage,  misrepresentation,  securities  fraud and  consumer  fraud and seeks
compensatory  damages in an amount of no less than $1,680,000,  together with an
award of punitive  damages in an amount to be determined  at trial.  The lawsuit
settled  in the  early  stages  between  plaintiff  Paul  R.  Janssens-Lens  and
defendants  Kensington  Securities,  Inc. and Kirtis Wyatt.  The Company did not
participate in this settlement agreement. The plaintiff is now in the process of
determining  whether he believes he still has a viable  cause of action  against
the Company.  In the event the plaintiff  elects to proceed against the Company,
the Company intends to vigorously defend the lawsuit. The Company believes it is
insured for its costs in this matter.

Item 2. Changes in Securities
-----------------------------

     None

Item 3. Defaults Upon Senior Securities
---------------------------------------

     None

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

     None

Item 5. Other 
------------- 

     None 



                                       12
<PAGE>


                                                            

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

     A. Exhibits

        None

     B. Reports on Form 8-K

     The Company  filed a Current  Report on Form 8-K,  dated  August 14,  1997,
where Gum Tech  International,  Inc.  and  Nabisco,  Inc.  entered into a "Joint
Development Agreement" to develop and commercialize a number of new and improved
products.  In the development phase of the agreement,  Gum Tech will combine its
expertise  in areas such as  coatings  and  active  ingredients  with  Nabisco's
expertise in areas such as gum bases and  flavors.  Gum Tech commits to having a
minimum manufacturing capacity for at least 20 million units from now until June
1, 1998.


                                       13

<PAGE>

                                                            
                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                         Gum Tech International, Inc.


                                        
                                        /s/ Gerald N. Kern
                                        ----------------------------------------
                                        Gerald N. Kern
                                        Chief Executive Officer and President

                                        /s/ Jeffrey L. Bouchy
                                        ----------------------------------------
                                        Jeffrey L. Bouchy
                                        Senior Vice President -
                                        Chief Financial Officer


November 14, 1997



                                       14