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, 1999

                                       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)

                             246 EAST WATKINS STREET
                                PHOENIX, AZ 85004
                    (Address of principal executive offices)

                                 (602) 252-1617
                           (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 were  7,676,597  shares of the  registrant's  common stock,  no par value,
outstanding as of November 5, 1999.
<PAGE>
                          GUM TECH INTERNATIONAL, INC.
                                   FORM 10-QSB
                                      INDEX

Part I   Financial Information                                              Page

         Item 1.  Condensed Consolidated Balance Sheet
                  as of September 30, 1999                                     1

                  Condensed Consolidated Statements of
                  Operations for the three months ended
                  September 30, 1999 and 1998                                  3

                  Condensed Consolidated Statements of
                  Operations for the nine months ended
                  September 30, 1999 and 1998                                  4

                  Condensed Consolidated Statements of
                  Cash Flows for the nine months ended
                  September 30, 1999 and 1998                                  5

                  Notes to Condensed Consolidated
                  Financial Statements                                         7

         Item 2.  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations               10

Part II  Other Information and Signatures

         Item 1.  Legal Proceedings                                           21

         Item 4.  Submission of Matters to a Vote of
                  Security Holders                                            22

         Item 6.  Exhibits and Reports on Form 8-K                            22

         Signatures                                                           23
<PAGE>
                          GUM TECH INTERNATIONAL, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 1999
                                   (Unaudited)

                                     ASSETS

Current Assets:
  Cash and cash equivalents                                        $  4,104,139
  Restricted cash                                                       273,752
  Accounts receivable, net of allowance for
   doubtful accounts of $132,025                                      2,816,084
  Inventories                                                         1,757,104
  Prepaid expenses and other                                             55,086
                                                                   ------------
      Total Current Assets                                            9,006,165
                                                                   ------------
Property and Equipment, at cost:
  Machinery and production equipment                                  4,423,951
  Office furniture and equipment                                        278,872
  Leasehold improvements                                                381,693
                                                                   ------------
  Total Property and Equipment                                        5,084,516

  Less accumulated depreciation                                      (1,616,579)
                                                                   ------------
      Net Property and Equipment                                      3,467,937
                                                                   ------------
Other Assets:
  Intangible assets, net of accumulated amortization
   of $384,192                                                          197,651
  Deposits and other                                                    195,467
                                                                   ------------
      Total Other Assets                                                393,118
                                                                   ------------
      Total Assets                                                 $ 12,867,220
                                                                   ============

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

                                        1
<PAGE>
                          GUM TECH INTERNATIONAL, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 1999
                                   (Continued)
                                   (Unaudited)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable                                                 $    561,101
  Accrued interest                                                       40,112
  Dividends payable                                                      20,000
  Customer deposits                                                         563
  Reserve for customer returns                                          320,210
  Current portion of long-term debt                                   1,209,998
                                                                   ------------
       Total Current Liabilities                                      2,151,984
                                                                   ------------
Long-Term Debt, net of current portion above:
  Senior notes payable                                                2,830,000
  Financial institutions and other                                      955,577
  Obligations under capital leases                                       16,733
  Less current portion above                                         (1,209,998)
                                                                   ------------
       Total Long-Term Debt                                           2,592,312
                                                                   ------------
Stockholders' Equity:
  Preferred stock: no par value, 1,000,000 shares
    authorized: Series A preferred stock, no par value,
    2,000 shares authorized, 1,600 shares issued and outstanding      1,600,000
  Common stock: no par value, 20,000,000 shares authorized,
    7,662,597 shares issued and outstanding                          19,719,454
  Additional paid in capital                                          3,451,206
  Accumulated deficit                                               (16,647,736)
                                                                   ------------
       Total Stockholders' Equity                                     8,122,924
                                                                   ------------
       Total Liabilities and Stockholders' Equity                  $ 12,867,220
                                                                   ============

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

                                        2
<PAGE>
                          GUM TECH INTERNATIONAL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                Three months ended September 30,
                                                -------------------------------
                                                   1999                 1998
                                                -----------         -----------

Net sales                                       $ 2,268,782         $ 1,286,176

Cost of sales                                     1,419,728           1,000,323
                                                -----------         -----------
     Gross Profit                                   849,054             285,853

Operating expenses                                  916,641             545,237
Research and development                            155,065             273,237
                                                -----------         -----------
     Income (Loss) From Operations                 (222,652)           (532,621)
                                                -----------         -----------
Other Income (Expense):
Interest and other income                            46,766              34,045
Interest expense                                   (500,357)           (122,056)
                                                -----------         -----------
     Total Other Income (Expense)                  (453,591)            (88,011)
                                                -----------         -----------
Income (Loss) Before Provision For
  Income Taxes                                     (676,243)           (620,632)

Provision for income taxes                               --                  --
                                                -----------         -----------
Net Income (Loss)                                  (676,243)           (620,632)

Preferred stock dividends                           119,021                  --
                                                -----------         -----------
Net Income (Loss) Applicable to
  Common Shareholders                           $  (795,264)        $  (620,632)
                                                ===========         ===========

Net Income (Loss) Per Share of Common Stock:
 Basic:
  Weighted Average Number of Common Shares
    Outstanding                                   7,553,410           6,808,776
                                                ===========         ===========
  Net Income (Loss) Per Share of Common Stock   $     (0.11)        $     (0.09)
                                                ===========         ===========
 Diluted:
  Weighted Average Number of Common Shares
    Outstanding                                   7,553,410           6,808,776
                                                ===========         ===========
  Net Income (Loss) Per Share of Common Stock   $     (0.11)        $     (0.09)
                                                ===========         ===========

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

                                        3
<PAGE>
                          GUM TECH INTERNATIONAL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                 Nine months ended September 30,
                                                 -------------------------------
                                                    1999                1998
                                                 -----------        -----------

Net sales                                        $ 6,633,479        $ 3,603,693

Cost of sales                                      4,550,124          2,815,423
                                                 -----------        -----------
     Gross Profit                                  2,083,355            788,270

Operating expenses                                 2,912,152          4,534,909
Research and development                             380,448            415,109
                                                 -----------        -----------
     Income  (Loss) From Operations               (1,209,245)        (4,161,748)
                                                 -----------        -----------
Other Income (Expense):
  Interest and other income                           65,895            109,173
  Interest expense                                  (829,365)          (383,680)
                                                 -----------        -----------
     Total Other Income (Expense)                   (763,470)          (274,507)
                                                 -----------        -----------
Income (Loss) Before Provision For
  Income Taxes                                    (1,972,715)        (4,436,255)

Provision for income taxes                                --                150
                                                 -----------        -----------
Net Income (Loss)                                 (1,972,715)        (4,436,405)

Preferred stock dividends                            149,600                 --
                                                 -----------        -----------
Net Income (Loss) Applicable to Common
  Shareholders                                   $(2,122,315)       $(4,436,405)
                                                 ===========        ===========
Net Income (Loss) Per Share of Common Stock:
 Basic:
  Weighted Average Number of Common Shares
    Outstanding                                    7,275,248          6,372,842
                                                 ===========        ===========
  Net Income (Loss) Per Share of Common Stock    $     (0.29)       $     (0.70)
                                                 ===========        ===========
 Diluted:
  Weighted Average Number of Common Shares
    Outstanding                                    7,275,248          6,372,842
                                                 ===========        ===========
  Net Income (Loss) Per Share of Common Stock    $     (0.29)       $     (0.70)
                                                 ===========        ===========

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

                                        4
<PAGE>
                          GUM TECH INTERNATIONAL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                    Nine months ended September 30,
                                                                    --------------------------------
                                                                       1999                 1998
                                                                    -----------          -----------
<S>                                                                 <C>                  <C>
Cash Flows From Operating Activities:
  Net income (loss)                                                 $(1,972,715)         $(4,436,405)
  Adjustments to reconcile net income (loss)
   to net cash (used) by operating activities:
     Depreciation                                                       321,237              201,260
     Amortization                                                       227,666               91,828
     Compensation from forgiveness of note receivable                        --              114,012
     Compensation from extension and issuance of stock options           91,285            1,508,566
     Accrued interest on notes receivable                                    --               60,164
     Amortization of discount on notes payable                          230,000                   --
     Common stock issued for payment of interest                        144,526                   --
     Changes in assets and liabilities:
       (Increase) in accounts receivable                             (1,353,445)            (139,731)
       Decrease in employee receivable                                       --               61,054
       (Increase) decrease in inventories                               139,057             (472,320)
       Decrease in prepaid expenses and other                             5,765                9,157
       (Increase) in deposits and other                                (169,939)            (246,664)
       (Decrease) in accounts payable and accrued expenses             (785,303)            (105,119)
       Increase in customer returns and allowances                      320,210                   --
       Increase (decrease) in customer deposits                         (34,200)             123,852
                                                                    -----------          -----------
       Net Cash (Used) By Operating Activities                       (2,835,856)          (3,230,346)
                                                                    -----------          -----------
Cash Flows From Investing Activities:
  Capital expenditures                                                 (240,947)            (585,903)
  Receipt of principal on notes receivable                                   --              250,000
                                                                    -----------          -----------
       Net Cash (Used) By Investing Activities                         (240,947)            (335,903)
                                                                    -----------          -----------
Cash Flows From Financing Activities:
  Proceeds from borrowing                                             4,000,000                   --
  Principal payments on notes payable                                  (282,498)            (253,483)
  Issuance of common stock upon exercise of
    options and warrants                                              1,683,918            2,004,765
  Issuance of preferred stock                                         2,000,000                   --
  Debt issuance costs incurred                                         (310,462)             (11,733)
  Offering costs incurred                                              (155,231)                  --
  Dividend distribution of subsidiary                                  (183,037)                  --
  Dividends paid                                                        (89,600)                  --
                                                                    -----------          -----------
       Net Cash Provided By Financing Activities                      6,663,090            1,739,549
                                                                    -----------          -----------
       Net Increase (Decrease) in Cash and Cash Equivalents           3,586,287           (1,826,700)

       Cash and Cash Equivalents at Beginning of Period                 517,852            3,607,913
                                                                    -----------          -----------
       Cash and Cash Equivalents at End of Period                   $ 4,104,139          $ 1,781,213
                                                                    ===========          ===========
</TABLE>

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

                                        5
<PAGE>
                          GUM TECH INTERNATIONAL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Continued)
                                   (Unaudited)

<TABLE>
<S>                                                                 <C>                  <C>
Supplemental Disclosure of Cash Flow Information:
  Cash paid during the period for:
    Interest                                                        $  229,510            $  316,204
    Income taxes                                                            --                    --
Supplemental Disclosure of Non Cash Investing and
 Financing Activities:
  Conversion of notes payable into common stock                     $1,505,973            $  924,000
  Issuance of warrants in connection with senior notes                 600,000                    --
  Dividends accrued on preferred stock                                  20,000                    --
  Issuance of common stock to repay senior notes and
    redeem preferred stock                                           1,240,000                    --
</TABLE>

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

                                        6
<PAGE>
                          GUM TECH INTERNATIONAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   The  accompanying   financial  information  of  Gum  Tech  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, 1999 are not necessarily  indicative of results of operations
     that  may be  expected  for  the  year  ending  December  31,  1999.  It is
     recommended  that this  financial  information  be read  with the  complete
     financial  statements  included in Gum Tech's  Annual Report on Form 10-KSB
     for the year ended December 31, 1998  previously  filed with the Securities
     and Exchange Commission.

2.   As of December 31, 1997, Gum Tech adopted Statement of Financial Accounting
     Standards (SFAS) No. 128, "Earnings Per Share",  which specifies the method
     of computation, presentation and disclosure of earnings per share. SFAS No.
     128 requires the presentation of two earnings per share amounts,  basic and
     diluted. Basic earnings per share is calculated using the average number of
     common shares  outstanding.  Diluted  earnings per share is computed on the
     basis of the average number of common shares  outstanding plus the dilutive
     effect of outstanding stock options using the "treasury stock" method.  The
     basic and diluted  earnings per share are the same since Gum Tech had a net
     loss in 1999  and  1998  and the  inclusion  of  stock  options  and  other
     incremental  shares  would be  antidilutive.  Options,  warrants  and other
     incremental  shares to purchase  2,006,168 and  1,354,968  shares of common
     stock at September  30, 1999 and 1998,  respectively,  were not included in
     the  computation  of diluted  earnings per share because Gum Tech had a net
     loss and their effect would be antidilutive.

                                        7
<PAGE>
3.   On June 2, 1999 Gum Tech  completed a $6.0 million  financing  with Citadel
     Investment  Group.  The  financing  consisted  of $4.0 million in principal
     amount  of 8%  Senior  Secured  Notes  and  $2.0  million  of 14%  Series A
     Preferred  Stock.  The  financing  is detailed in a Form 8-K filing made on
     June 9, 1999. The terms of the financing permit Gum Tech to redeem the debt
     and preferred stock at any time, subject to certain conditions,  in cash or
     common  stock,  but require that one half of the debt and  preferred  stock
     must be redeemed at a 10% premium by June 2, 2000. The cost of this premium
     is  amortized  over a  twelve-month  period  through  non-cash  charges  to
     interest and preferred dividends.

     In  conjunction  with the financing,  Gum Tech issued  300,000  warrants to
     purchase  Gum Tech  common  stock to  Citadel  Investment  Group and 60,000
     warrants to  purchase  Gum Tech common  stock to  Intercontinental  Capital
     Corp., a consultant  involved in the transaction.  The cost of the warrants
     is  allocated  between  the  debt and  preferred  stock  components  of the
     financing.  The amount of the debt  financing was recorded at the principal
     amount  ($4,000,000)  less the cost of the  warrants  allocated to the debt
     component  ($600,000).  The  warrant  cost  associated  with  the  debt  is
     amortized as a non-cash  interest  expense over the term of the notes.  The
     cost of the warrants associated with the preferred stock component has been
     charged against paid-in-capital.

     In September  1999,  as permitted by the terms of the  financing,  Gum Tech
     issued 117,759 shares of common stock to Citadel Investment Group to redeem
     $800,000 principal amount of Senior Secured Notes and $400,000 stated value
     of the  Series  A  Preferred  Stock,  and to  cover  the  related  $120,000
     prepayment  charge.  The unamortized  portion of the prepayment premium and
     warrants  related to the amount  redeemed  was  expensed  in  September  in
     connection with the redemption.

4.   Certain financial  information for Gum Tech's gum operations is required to
     be supplied  to Citadel  Investment  Group in  conjunction  with  financial
     covenants  contained  in the  financing  agreement.  Below is the  required
     financial information as of September 30, 1999:

     A.   EBITDA: Net income                                         $ (975,337)
                  Add - Depreciation & amortization                     122,308
                  Add - Interest expense, net of interest income        477,087
                  Add - Accrued income taxes                                -0-
                                                                     ----------
                        EBITDA                                       $ (375,942)
                                                                     ==========

                                        8
<PAGE>
     B.   Net Revenue
                  Gross revenue                                      $1,182,305
                  Less returns & allowances                             (58,638)
                  Less sales discounts, slotting, other                 (38,779)
                                                                     ----------
                        Net Revenue                                  $1,084,888
                                                                     ==========

          In September  1999,  Citadel agreed to waive  compliance  with the Net
          Revenue covenant for the third and fourth quarters of 1999 in exchange
          for an  extension  on the call  protection  on the  warrants  given to
          Citadel  from  June 2, 2000 to June 2,  2001 and  acceleration  of the
          prepayment requirement originally due June 2, 2000.

     C.   Cash & Cash Equivalents
                  Cash on deposit                                    $1,736,379
                  Cash equivalents                                          -0-
                                                                     ----------
                        Total                                        $1,736,379
                                                                     ==========

                                        9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

OVERVIEW

     Gum Tech  develops  and  manufactures  specialty  chewing gum  products for
branded and private label customers,  as well as products marketed under its own
brand  labels.  Specialty  chewing  gums  include  vitamins,  herbals and active
over-the-counter drug ingredients formulated to provide specific  health-related
benefits to the user.  Gum Tech  currently  targets four market  segments:  oral
care, smoking cessation,  dietary supplement, and over-the-counter (OTC) drug. A
substantial  majority of Gum Tech's sales from its gum operations  currently are
attributable to products  developed,  manufactured  and packaged by Gum Tech for
marketing  and  sale by  major  branded  and  private  label  consumer  products
companies.

     In January  1999,  Gum Tech entered into a joint  venture with  BioDelivery
Technologies,  Inc. to manufacture, market and distribute Zicam(TM), a nasal gel
formula.  Under  an  operating  agreement  signed  May 6,  1999,  Gum  Tech  and
BioDelivery  Technologies  transferred their respective  interests in the patent
rights to the nasal gel technology  used in Zicam(TM) in exchange for membership
interests in Gel Tech LLC, an Arizona limited liability company.  Gum Tech has a
60%  interest in the capital and profits of the joint  venture and has  provided
$3.5 million of capital to the joint venture. Gum Tech reports financial results
of Gel Tech LLC on a consolidated  basis, but identifies certain  information by
its two business segments--chewing gum operations and Zicam(TM) operations.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED  SEPTEMBER 30, 1999 COMPARED TO
THE THREE MONTHS ENDED SEPTEMBER 30, 1998

     The following  table details certain  financial  information for Gum Tech's
chewing gum and Zicam(TM)  operations  for the three months ended  September 30,
1999:

                                    Chewing gum       Zicam(TM)    Consolidated
                                    ------------    ------------   ------------
Net sales                           $  1,084,888    $  1,183,894   $  2,268,782
Cost of sales                          1,051,022         368,706      1,419,728
                                    ------------    ------------   ------------
Gross profit                              33,866         815,188        849,054
Operating expenses                       448,229         468,412        916,641
Research and development                  83,888          71,177        155,065
                                    ------------    ------------   ------------
Income (loss) from operations           (498,251)        275,599       (222,652)
Interest and other income                 23,271          23,495         46,766
Interest expense                         500,357               0        500,357
                                    ------------    ------------   ------------
Net income (loss)                   $   (975,337)   $    299,094   $   (676,243)
                                    ============    ============   ============

Net Assets                          $  9,119,682    $  3,747,538   $ 12,867,220

                                       10
<PAGE>
CHEWING GUM OPERATIONS

     Certain  information  is  set  forth  below  for  Gum  Tech's  chewing  gum
operations expressed in dollars and as a percentage of net sales for the periods
indicated:

<TABLE>
<CAPTION>
                                              Three Months Ended September 30,
                                       -------------------------------------------------
                                               1999                       1998
                                       ----------------------     ----------------------
<S>                                    <C>           <C>          <C>           <C>
Net sales                              $ 1,084,888        100%    $ 1,286,176        100%
Cost of sales                            1,051,022         97       1,000,323         78
                                       -----------   --------     -----------   --------
Gross profit                                33,866          3         285,853         22
Operating expenses                         448,229         41         545,237         42
Research and development                    83,888          8         273,237         21
                                       -----------   --------     -----------   --------
Income (loss) from operations             (498,251)       (46)       (532,621)       (41)
Interest and other income                   23,271          2          34,045          3
Interest expense                           500,357         46         122,056         10
Provision (benefit) for income taxes            --         --              --         --
                                       -----------   --------     -----------   --------
Net income (loss)                      $  (975,337)       (90)%   $  (620,632)       (48)%
                                       ===========   ========     ===========   ========
</TABLE>

     NET SALES. Net sales decreased  approximately  $200,000 from the prior year
period.  The  decrease  in net sales  was  primarily  attributable  to less than
anticipated  demand for certain gum products  introduced  in late 1998 and early
1999. Because five customers  currently account for a significant  percentage of
Gum Tech's gum sales,  demand for Gum Tech's products is impacted from period to
period  by  a  number  of  factors  affecting  these  customers,  including  the
difficulties inherent in launching a new gum product, the success or failure and
cost of sales promotions, the costs and time required to expand into new markets
and demand for the  customers'  products at the  consumers  level.  In addition,
certain gum  products  are somewhat  impacted by seasonal  effects.  Significant
sales in the 1999 period were  deliveries  of Breath  Asure  Dental  Gum(TM) and
several  functional  chewing gums to  Pharma-Green  Ltd.  Sales in 1998 included
initial deliveries of Breath Asure Dental Gum(TM), a diet gum to Herbablife, and
Aspergum(R) and Chooz(R) to Heritage Consumer Products.

     COST OF  SALES.  Cost of sales  increased  slightly  from the year  earlier
period  despite a lower  sales  level  primarily  due to an increase in overhead
expenses incurred in conjunction with the expansion of facilities, equipment and
manpower over the past several  months in  anticipation  of higher planned sales
levels.

     GROSS PROFIT.  Gross profit  decreased due to the decrease in sales and the
cost of support given to certain of Gum Tech's customers to assist them in their
promotional programs.

     OPERATING  EXPENSES.  Operating  expenses decreased  approximately  $97,000
principally  due  to  the  cost  of  certain  administrative   services  (sales,
accounting, warehousing) being charged to Gel Tech LLC.

                                       11
<PAGE>
     RESEARCH  AND  DEVELOPMENT.  Research  and  development  expense  decreased
principally  due to a  reclassification  of expenses  for prior  periods in 1998
which  increased the 1998 expense  level and the cost of production  scale-up of
several new products in 1998.

     INTEREST EXPENSE.  Interest expense increased to $500,000 from $122,000 for
the year earlier.  Interest expense in 1999 largely reflects  non-cash  interest
charges  associated  with the financing with Citadel  Investment  Group in early
June.  These  non-cash  interest  accruals  include  the  cost of the  warrants,
required  prepayment  premium  and  amortization  of debt  issuance  costs.  The
redemption of $800,000  principal amount of this debt in September 1999 resulted
in  an  additional  interest  expense  of  approximately  $175,000  due  to  the
accelerated amortization of these interest charges related to the debt redeemed.

     NET INCOME (LOSS). Net loss for the 1999 period was approximately  $975,000
compared to a net loss of  approximately  $621,000  for the prior  period.  This
increase in net loss was primarily due to the increase in interest expense.

ZICAM(TM) OPERATIONS

     Zicam(TM)  operations  began  January 1, 1999.  As a result,  the financial
results for Zicam(TM) operations cannot be compared to the prior period.  During
the three months ended  September  30, 1999,  Gel Tech LLC recorded net sales of
Zicam(TM) of approximately  $1.18 million  reflecting  initial deliveries of the
product to an increased  number of retail  establishments.  The gross profit for
the period was $815,000, or 69% of net sales. Gum Tech anticipates that sales of
Zicam(TM) will increase  significantly in future periods due to increased market
awareness of the product coupled with the onset of the cold season.

RESULTS OF OPERATIONS  FOR THE NINE MONTHS ENDED  SEPTEMBER 30, 1999 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 1998

     The following  table details certain  financial  information for Gum Tech's
chewing gum and  Zicam(TM)  operations  for the nine months ended  September 30,
1999:

                                      Chewing gum     Zicam(TM)     Consolidated
                                      -----------    -----------    -----------
Net sales                             $ 4,982,904    $ 1,650,575    $ 6,633,479
Cost of sales                           3,959,529        590,595      4,550,124
                                      -----------    -----------    -----------
Gross profit                            1,023,375      1,059,980      2,083,355
Operating expenses                      1,821,658      1,090,494      2,912,152
Research and development                  276,375        104,073        380,448
                                      -----------    -----------    -----------
Income (loss) from operations          (1,074,658)      (134,587)    (1,209,245)
Interest and other income                  42,065         23,830         65,895
Interest expense                          829,365             --        829,365
                                      -----------    -----------    -----------
Net income (loss)                     $(1,861,958)   $  (110,757)   $(1,972,715)
                                      ===========    ===========    ===========

                                       12
<PAGE>
CHEWING GUM OPERATIONS

     Certain  information is set forth below for the  Corporation's  chewing gum
operations expressed in dollars and as a percentage of net sales for the periods
indicated:

<TABLE>
<CAPTION>
                                               Nine Months Ended September 30,
                                       -----------------------------------------------
                                               1999                      1998
                                       ---------------------     ---------------------
<S>                                    <C>           <C>         <C>           <C>
Net sales                              $ 4,982,904       100%    $ 3,603,693       100%
Cost of sales                            3,959,529        79       2,815,423        78
                                       -----------   -------     -----------   -------
Gross profit                             1,023,375        21         788,270        22
Operating expenses                       1,821,658        37       4,534,909       126
Research and development                   276,375         6         415,109        11
                                       -----------   -------     -----------   -------
Income (loss) from operations           (1,074,658)      (22)     (4,161,748)     (115)
Interest and other income                   42,065         1         109,173         3
Interest expense                           829,365        16         383,680        11
Provision (benefit) for income taxes            --        --             150        --
                                       -----------   -------     -----------   -------
Net income (loss)                      $(1,861,958)      (37)%   $(4,436,405)     (123)%
                                       ===========   =======     ===========   =======
</TABLE>

     NET SALES. Net sales increased to  approximately  $5.0 million for the nine
months  ended  September  30,  1999 or 38% over the  prior  year.  The  increase
reflects the addition of several new customers  and/or  products in mid- to late
1998.  Among these are Ranir DCP,  Breath  Asure,  Heritage  Consumer  Products'
AcuTrim(R) gum and  Pharma-Green  Ltd.  Sales in the prior year largely  reflect
sales of Cigarest's  smoking  cessation gum,  Herbalife's  diet and energy gums,
Aspergum(R) and Chooz(R) and initial deliveries of Breath Asure Dental Gum(TM).

     COST OF SALES. The cost of sales increased by approximately $1.1 million to
$4.0 million reflecting the higher level of sales.

     GROSS PROFIT. Gross profit increased from $788,000 to $1,023,000 reflecting
the higher level of sales.

     OPERATING  EXPENSES.  Operating  expenses  declined by  approximately  $2.7
million to $1.8 million.  The amount for 1998 includes a charge of $1,478,750 to
reflect the cost of an  extension of options to a former  officer and  severance
compensation expense of $618,230.  Exclusive of these charges,  expenses in 1998
were  $2,437,929  or $616,271  greater  than the 1999 level.  This  decrease was
primarily  attributable to lower advertising expenses associated with Gum-Tech's
change in strategy in early 1998 to a focus on contract  manufacturing and lower
legal expenses.

     INTEREST AND OTHER  INCOME.  Interest and other income  decreased  due to a
lower cash balance.

                                       13
<PAGE>
     INTEREST  EXPENSE.  Interest expense  increased by  approximately  $446,000
compared to the prior year primarily due to interest charges associated with the
Citadel financing.

     NET  INCOME  (LOSS).  Net loss  decreased  by  approximately  $2.6  million
primarily  due to the  higher  level  of sales  and the  decrease  in  operating
expenses.

ZICAM(TM) OPERATIONS

     Zicam(TM)  sales and  operations  began January 1, 1999.  As a result,  the
financial  results  for  Zicam(TM)  operations  cannot be  compared to the prior
period.  For the nine months ended September 30, 1999, Gel Tech LLC recorded net
sales of approximately $1.65 million and a gross profit of $1.06 million, or 64%
of net sales.

LIQUIDITY AND CAPITAL RESOURCES

     As of September 30, 1999, Gum Tech's working capital was approximately $6.9
million  compared to $2.2 million at December  31, 1998.  During the nine months
ended  September  30,  1999,  Gum Tech  experienced  a decrease  in cash used by
operating  activities of  approximately  $2.8  million,  versus $3.2 million the
prior year.  The decrease in cash for 1999 is  attributable  to the net loss for
the period ($2.0 million), an increase in accounts receivable ($1.4 million) and
a decrease in accounts  payable ($0.8  million),  which were offset in part by a
variety of non-cash charges for the period.

     Investing  activities  used  $241,000  of cash  for the nine  months  ended
September 30, 1999, compared to $336,000 for the same period in 1998.

     Financing  activities  provided  approximately $6.7 million of cash for the
nine  months  ended  September  30,  1999  compared  to $1.7  million  in  1998.
Approximately  $5.5 million of the 1999 amount  reflects  net proceeds  realized
from the Citadel  financing in June 1999.  Details of the Citadel  financing are
contained in a Form 8-K filing made on June 9, 1999.  Proceeds realized from the
exercise of options and warrants  contributed  approximately $1.7 million versus
$2.0 million in 1998. In September  1999, as permitted by the Citadel  financing
arrangement,  Gum  Tech  issued  117,759  shares  of  common  stock  to  Citadel
Investment Group to repay $800,000  principal amount of Senior Secured Notes and
$400,000 of Series A Preferred Stock, including a prepayment charge of $120,000.

     In  February  1999,  Gum  Tech  entered  into  a  $2.0  million   financing
arrangement with a commercial bank for the sale of accounts receivable submitted
to the bank. Gum Tech canceled this facility in conjunction  with the completion
of the Citadel  financing.  Gum Tech did not borrow under this facility while it
was outstanding.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

     Gum Tech may make certain written or oral  forward-looking  statements from
time to time in filings with the Securities & Exchange  Commission or otherwise.
These forward-looking  statements are within the meaning of that term in Section
27A of the Securities Act of 1933, as amended, and

                                       14
<PAGE>
Section 21E of the  Securities  Act of 1934,  as amended.  Such  statements  may
include,  but are not  limited  to,  projections  of  revenues,  income or loss,
estimates  of capital  expenditures,  plans for future  operations,  products or
services,  and financing needs or plans, as well as assumptions  relating to the
foregoing.  The words "believe," "expect," "anticipate,"  "estimate," "project,"
and similar expressions identify forward-looking statements, which speak only as
of  the  date  the  statement  was  made.  Specifically,  this  report  contains
forward-looking  statements  concerning  an  expected  significant  increase  in
Zicam(TM) sales, among others. Forward-looking statements are inherently subject
to risks and  uncertainties,  some of which cannot be  predicted or  quantified.
Future events and actual  results could differ  materially  from those set forth
in,  contemplated  by,  or  underlying  the  forward-looking   statements.   The
statements included in this report, particularly those contained in this Item 2,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations,"  and in the  Notes to Gum  Tech's  financial  statements,  describe
factors that could contribute to or cause such  differences.  Factors that could
cause actual results to differ materially from Gum Tech's  expectations  include
the possibility of less favorable than  anticipated  results of ongoing clinical
studies  regarding the efficacy of Zicam(TM),  the lack of market acceptance for
or other uncertainties  concerning  Zicam(TM),  the inability to manufacture and
deliver  sufficient  quantities  of Zicam(TM) to meet  anticipated  demand,  Gum
Tech's  inability to redeem the debt and  preferred  stock issued in the Citadel
financing,  the inability to secure contracts on favorable terms with additional
partners  for Gum Tech's  chewing  gum  operations,  a decrease  in the level of
reorders from existing customers,  financial difficulties  encountered by one or
more  of Gum  Tech's  chewing  gum  customers,  and  difficulties  in  obtaining
additional capital for marketing,  research and development, and other expenses.
These potential risks and uncertainties, together with those mentioned below and
elsewhere in this  report,  could affect Gum Tech's  future  operating  results,
financial condition, and the market price of its common stock.

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS AND FINANCIAL CONDITION

     Our future operating results and financial  condition depend on a number of
factors that we must  successfully  manage in order to achieve  favorable future
operating results.  The following  potential risks and  uncertainties,  together
with those mentioned elsewhere in this report, could affect our future operating
results, financial condition and the market price of our common stock.

WE HAVE INCURRED SIGNIFICANT LOSSES AND MAY NOT BECOME PROFITABLE

     We began operations in February 1991 and have a limited  operating  history
upon which  potential  investors  may  evaluate  our  performance.  We  reported
significant  losses for the last three years and for the first three quarters of
1999. We can give no assurance that future  operations  will be profitable.  The
likelihood  of  our  success  must  be  considered  relative  to  the  problems,
difficulties, complications and delays frequently encountered in connection with
the  development  and operation of a new  business,  the  significant  change in
strategy in early 1998, and the  development  and marketing of Zicam(TM),  a new
product.

                                       15
<PAGE>
OUR RELIANCE ON A FEW CUSTOMERS MAY NEGATIVELY IMPACT OUR FINANCIAL RESULTS

     The shift in our chewing gum  strategy in early 1998 to a focus on contract
manufacturing has made our chewing gum operations dependent for sales and future
growth on a few customers.  These  customers  include  Herbalife,  Breath Asure,
Ranir, Heritage Consumer Products and PharmaGreen. While the decision to partner
with these firms  relieves  Gum Tech of the direct  responsibility  of marketing
products,  it does introduce a dependability  on these customers to market their
products.  Further,  we are at risk for their  non-payment  or late  payment for
amounts owed us. While Gum Tech intends to add to this portfolio of customers to
reduce  the risk of  non-performance  by any  single  customer,  there can be no
assurance that we will be successful in that effort.

OUR  INABILITY  TO PROVIDE  SCIENTIFIC  PROOF FOR PRODUCT  CLAIMS MAY  ADVERSELY
AFFECT OUR SALES

     The  marketing  of  certain  of our  chewing  gum and nasal  gel  products,
including  Zicam(TM),  involves claims that such products assist in weight loss,
promote  dental  hygiene,  and reduce the  duration  of the common  cold,  among
others.  Under FDA and FTC rules,  we are required to obtain  scientific data to
support any health claims we make concerning our products.  Although we have not
provided nor been requested to provide any  scientific  data to the FDA, we have
obtained such scientific data for all of our products. There can be no assurance
that the  scientific  data we have  obtained  in support of such  claims will be
deemed  acceptable by the FDA or FTC, should either agency request any such data
in the future. If we are unable to provide support that is acceptable by the FDA
or the FTC,  either  agency could force us to stop making the claims in question
or restrict us from selling the affected products.

FDA AND  OTHER  GOVERNMENT  REGULATION  MAY  RESTRICT  OUR  ABILITY  TO SELL OUR
PRODUCTS

     We are  subject to various  federal,  state and local  laws  affecting  our
business.  Our chewing gum and nasal gel products are subject to  regulation  by
the FDA, including regulations with respect to labeling of products, approval of
ingredients in products,  claims made regarding the products,  and disclosure of
product ingredients.  If we do not comply with these regulations,  the FDA could
force us to stop selling the  affected  products or incur  substantial  costs in
adopting measures to maintain compliance with these regulations.

     Our  advertising   claims   regarding  our  products  are  subject  to  the
jurisdiction  of the FTC as well as the FDA.  In both cases we are  required  to
obtain  scientific  data to support any advertising or labeling health claims we
make concerning our products, although no pre-clearance or filing is required to
be made with either agency. If we are unable to provide the required support for
such  claims,  the FTC may stop us from making such claims or require us to stop
selling the related product.

                                       16
<PAGE>
WE CANNOT INSURE THAT ZICAM(TM) WILL BE A SUCCESSFUL PRODUCT

     In 1999,  Gel Tech LLC, a joint  venture in which we hold a 60% interest in
profits and capital,  launched a new homeopathic cold remedy known as Zicam(TM).
Although   initial   internal   studies  have   indicated   that  Zicam(TM)  can
significantly   reduce  the  duration  and  severity  of  the  common  cold,  no
independent  study has yet been completed  supporting  this claim.  In addition,
even if an independent study is eventually  published that supports the efficacy
of  Zicam(TM),  there is no guarantee  that the product will achieve  widespread
acceptance by the market.  If any  unanticipated  problem arises  concerning the
efficacy  of  Zicam(TM)  or the  product  fails  to  achieve  widespread  market
acceptance for any reason , our prospects for our future operating results would
be adversely affected.

WE MAY BE UNABLE TO MEET DEMAND FOR OUR NEW PRODUCTS

     To the extent  Zicam(TM)  or any other new  product we  introduce  achieves
widespread market acceptance and generates  significant demand, we may be unable
to  produce  and  deliver  sufficient  quantities  of the  product  to meet  our
customers' demands on a timely basis. If so, we could lose opportunities to sell
larger  quantities  of the product and damage  relationships  with  distributors
whose orders could not be timely filled. This problem, if encountered,  could be
particularly damaging if we are not able to meet customer demand during the cold
season, when we expect demand for sales of Zicam(TM) to peak.

UNANTICIPATED PROBLEMS ASSOCIATED WITH PRODUCT DEVELOPMENT COULD DELAY OR HINDER
INTRODUCTION OF NEW PRODUCTS

     We may  experience  unanticipated  difficulties  in developing new products
that could  delay or  prevent  the  introduction  of those  products.  We may be
dependent in the near future upon chewing gum products that are currently  being
developed.  If we are unable to develop  new  chewing  gum  products on a timely
basis,  our  business,  operating  results,  and  financial  condition  could be
materially adversely affected.

WE MAY BE UNABLE TO SUCCESSFULLY EXPAND OUR OPERATIONS

     We intend to continue expanding our manufacturing and marketing operations.
Expansion will place  substantial  strains on our newly retained  management and
our operational,  accounting, and information systems.  Successful management of
growth will require us to improve our financial controls,  operating procedures,
and  management  information  systems,  and to train,  motivate,  and manage our
employees.

     In  addition,  to the extent  that  actual  demand for our  products in the
future is less than  anticipated,  we may incur higher than  necessary  costs in
preparing  for an  anticipated  growth  in sales  that does not  materialize  or
materializes more slowly than expected.

     Failure to manage growth  effectively  would have a material adverse effect
on the  results  of our  operations  and our  ability to  execute  our  business
strategy.

                                       17
<PAGE>
TERMS OF SERIES A PREFERRED  STOCK AND SENIOR  SECURED  NOTES COULD  DEPRESS THE
PRICE OF OUR STOCK OR LEAD TO FORECLOSURE

     The terms of the Series A Preferred  Stock and Senior  Secured Notes issued
in June 1999 contain a number of restrictive  covenants that we must satisfy and
that require  repayment of the Series A Preferred Stock and Senior Secured Notes
at  various  times  during the two year  period  following  the  closing of that
offering.  We  generally  have the  ability to make these  payments in shares of
stock  rather than cash,  which could  depress the price of our common  stock if
demand for our shares does not meet the  increased  number of shares  being sold
into the market. In addition,  failure to meet any of the restrictive  covenants
or failure or inability to pay the required amounts under the Series A Preferred
Stock or the Senior  Secured Notes when due will enable the holders of the Notes
to  exercise  a variety  of  remedies,  including  foreclosure  of its  security
interests in substantially all the assets of Gum Tech. In that event, Gum Tech's
operations and financial results will be severely and adversely affected and the
price of our common stock could decline significantly.

FAILURE TO SATISFY FINANCIAL COVENANTS WOULD TRIGGER ADVANCE REMEDIES

     The terms of the Series A Preferred Stock and the Notes issued in June 1999
require us to meet a number of financial  covenants  on a quarterly  basis while
the Notes remain outstanding, including cash, revenue, and EBITDA. If we fail to
satisfy  any of  these  financial  covenants,  or  otherwise  breach  any of the
negative covenants included in this financing, the applicable interest rate will
increase to 15% and the holders of the Notes may  exercise a number of remedies,
including  accelerating  the principal and interest due on the Notes, or closing
on the  collateral  pledged to secure the Notes,  and forcing  conversion of the
Notes  into  common  stock.  There can be no  assurance  that we will be able to
satisfy the financial covenants contained in this agreement on an ongoing basis.

THE LARGE NUMBER OF SHARES  ELIGIBLE FOR  IMMEDIATE AND FUTURE SALES MAY DEPRESS
THE PRICE OF OUR STOCK

     Sales of  substantial  amounts  of common  stock in the open  market or the
availability  of a large number of  additional  shares for sale could  adversely
affect  the  market  price  for  the  common  stock.  Substantially  all  of our
outstanding  shares of common stock, as well as the shares underlying vested but
unexercised warrants and options, have either been registered for public sale or
may be sold under Rule 144 promulgated under the Securities Act. Therefore,  all
of these shares may be immediately sold by the holders.  A substantial  increase
in the volume of trading in our stock may depress the price of our common stock.

WE MAY BE UNABLE TO PREVENT OTHERS FROM DEVELOPING SIMILAR PRODUCTS

     We routinely  seek trademark and patent  protection  from the United States
Patent  Office  ("USPO")  and from  similar  agencies in foreign  countries  for
chewing  gum brands and have done so for  Zicam(TM).  There can be no  assurance
that we will be able to  successfully  defend  any  trademarks,  trade  names or
patents against claims from or use by competitors or that trademark,  trade name
or patent  applications  will be  approved  by the USPO or any  similar  foreign
agency.

                                       18
<PAGE>
     We consider  some of our  chewing  gum  formulations  and  processes  to be
proprietary in nature and rely upon a combination of non-disclosure  agreements,
other   contractual   restrictions  and  trade  secrecy  laws  to  protect  such
proprietary  information.  There can be no  assurance  that these  steps will be
adequate to prevent  misappropriation of our proprietary information or that our
competitors  will  not  independently   develop  chewing  gum  formulations  and
processes that are substantially equivalent or superior to our own.

THE PRICE OF OUR STOCK MAY CONTINUE TO BE VOLATILE

     The  market  price of our common  stock has been  highly  volatile  and may
continue to be volatile in the future.  Factors such as our operating results or
public announcements may cause the market price of our stock to decline quickly.
Market  prices  for  securities  of many  small  capitalization  companies  have
experienced wide  fluctuations in response to variations in quarterly  operating
results, general economic indicators and other factors beyond our control.

WE MAY INCUR SIGNIFICANT COSTS RESULTING FROM PRODUCT LIABILITY CLAIMS

     We are subject to  significant  liability  should use or consumption of our
products  cause injury,  illness or death.  Although we carry product  liability
insurance,  there can be no  assurance  that our  insurance  will be adequate to
protect us against  product  liability  claims or that  insurance  coverage will
continue to be available on reasonable terms.

WE MAY REQUIRE  ADDITIONAL  FINANCING,  WHICH MAY NOT BE AVAILABLE ON ACCEPTABLE
TERMS

     We may be  required  to seek  additional  debt or equity  financing  in the
future in order to fund anticipated  expansion of our manufacturing  activities.
There can be no assurance  that such  additional  financing will be available on
acceptable terms or at all. Any future equity financing may involve  substantial
dilution to the interests of our stockholders.

INABILITY TO RETAIN CURRENT MANAGEMENT COULD NEGATIVELY IMPACT OUR OPERATIONS

     Our operations are dependent upon our ability to hire and retain  qualified
management  personnel and upon the continued services of our executive officers.
The loss of the services of any of our executive  officers,  whether as a result
of death,  disability,  or otherwise,  could have a material adverse effect upon
our business.

     We experienced  significant management and Board changes in 1998, including
the  appointment of a new President and a new Chief Financial  Officer.  We have
entered into employment  agreements with our current executive officers and have
applied for key man life insurance upon certain of their lives.

                                       19
<PAGE>
YEAR 2000 PROBLEMS MAY ADVERSELY AFFECT OUR OPERATIONS

     We  recognize  the  potential  business  impacts  related  to the Year 2000
computer  system issue.  The Year 2000 issue is one where  computer  systems may
recognize the designation  "00" as 1900 when it means 2000,  resulting in system
failure or miscalculations.

     In  recognition  of  the  Year  2000  issue,  we  have  been  conducting  a
comprehensive   review  of  all  information   technology  and   non-information
technology  systems that we use. This review includes testing and analysis,  and
inquiries of third parties supplying information  technology and non-information
technology systems, computer hardware and software products and components,  and
other equipment.

     As a result  of our  review  to date,  we have  made  modifications  to our
software    systems,    including    upgrades    required   of   our   principal
manufacturing/financial   software  system.  In  addition,  we  have  identified
modifications  that are  required  of our  computer  hardware  system  and other
information technology systems, including  telecommunications systems. We expect
the necessary  modifications  to be completed by the end of 1999.  Also, we will
have modifications to our non-information  technology  equipment,  including our
manufacturing equipment,  completed by year-end.  Finally, we continue to review
our exposure  from critical  suppliers and customers to ascertain  whether those
entities are taking the necessary steps to address their Year 2000 issues.

     The cost of modifications to Gum Tech's systems and equipment have not had,
and are not expected to have,  a material  impact on our  financial  position or
results of operations.

     At this time, we have not developed Year 2000 contingency plans, other than
the review and  remedial  actions  described  above,  and do not intend to do so
unless we believe such plans are merited by the results of our  continuing  Year
2000 review.

     If we or the third parties with which we have  relationships  were to cease
or not successfully  complete Year 2000 remediation  efforts, we could encounter
disruptions to our operations  that could have a material  adverse effect on our
business,  financial  condition,  and  results of  operations.  We also could be
materially  and adversely  impacted by widespread  economic or financial  market
disruption caused by Year 2000 computer system failures.

                                       20
<PAGE>
PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     On October 16,  1996,  a lawsuit  was filed  against Gum Tech 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 Gum Tech,  principally  alleges  that Gum Tech  engaged  in  unlawful
rebates,  appropriations and overcharges,  commercial bribery,  fraud and unjust
enrichment.  On  September  4,  1998,  the court  granted a motion  for  summary
judgment in Gum Tech's favor,  and dismissed the plaintiff's  claims against Gum
Tech and its current and former directors. The ruling remains subject to appeal.

     On July 2, 1998,  Kirk  Gossett,  a former  employee  of Gum Tech,  filed a
lawsuit against Gum Tech and three officers and employees of Gum Tech, and their
spouses, alleging violation of overtime requirements of the Fair Labor Standards
Act.  The claim  against all parties has been  settled for an amount that is not
material to Gum Tech's operations.

     On January 27, 1999,  an action was filed  against Gum Tech in the Superior
Court of the State of Arizona in and for the County of Maricopa, CV-99-01528, by
Paul F.  Janssens-Lens.  The complaint  alleges  intentional  interference  with
business relations, intentional misrepresentation,  negligent misrepresentation,
securities fraud, and consumer fraud. The plaintiff seeks  compensatory  damages
of $720,000,  unspecified  punitive damages,  and attorneys' fees and costs. Gum
Tech denies the  plaintiff's  allegations  and intends to vigorously  defend the
action.

     On June 2,  1999,  Gum Tech  filed a  complaint  in the  Superior  Court of
Maricopa County,  Arizona against DJ Ltd. ("DJ"), CIV 99-1136-PHX-PGR (D. Ariz.)
Gum Tech's complaint sought a declaratory  judgment that DJ was not owed any fee
under an agreement  entered into between the parties pursuant to which DJ was to
act as financial  advisor to Gum Tech.  DJ removed the case to the United States
District  Court for the  District  of Arizona and filed a  counterclaim.  In its
counterclaim, DJ alleges that Gum Tech breached the contract between the parties
and that Gum Tech has been unjustly enriched.  DJ seeks damages in the amount of
$480,000,  plus costs,  expenses and warrants to purchase  50,000  shares of Gum
Tech common stock. DJ also seeks a declaratory  judgment  confirming its version
of its rights under the agreement.

ITEM 2. CHANGES IN SECURITIES

     None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None

                                       21
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     At the 1999 Annual  Meeting of  Stockholders,  held on August 11, 1999, the
stockholders  approved the election of five directors to serve for the following
year or until their successors are elected:

     Name                                     For                    Against
     ---------                                ---                    -------
     W. Brown Russell                      6,823,477                  16,432
     William D. Boone                      6,814,177                  25,732
     Bruce  Jorgenson, M.D.                6,817,077                  22,832
     Gary Kehoe                            6,818,477                  21,432
     William A. Yuan                       6,811,527                  28,382

ITEM 5. OTHER INFORMATION

     None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     A.   EXHIBITS

          3.1  Amended  and  Restated  Articles  of  Incorporation  of Gum  Tech
               International,  Inc.  (incorporated  by reference to Registrant's
               Quarterly  Report on Form 10-QSB for the period  ending March 31,
               1999, file number 000-27646).

          3.2  Amended  Bylaws  of  Gum  Tech  International  (incorporated  by
               reference to Registrant's Quarterly Report on Form 10-QSB for the
               period ending March 31, 1999, file number 000-277646).

          3.3  Certificate  of  Designations,  Preference and Rights of Series A
               Preferred Stock of Gum Tech International,  Inc.(incorporated  by
               reference to  Registrant's  Current Report on Form 8-K filed June
               9, 1999, file number 000-27646).

          27   Financial Data Schedule

     B.   REPORTS ON FORM 8-K

          None

                                       22
<PAGE>
                                   SIGNATURES

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

                                                    Gum Tech International, Inc.


                                                   /s/ Gary S. Kehoe
                                                   -----------------------------
                                                                   Gary S. Kehoe
                                                                   President and
                                                         Chief Operating Officer


                                                   /s/ William J. Hemelt
                                                   -----------------------------
                                                               William J. Hemelt
                                                        Chief Financial Officer,
                                                           Treasurer & Secretary


                                                               November 15, 1999

                                       23