UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-QSB/A

(Mark One)

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

                       For the quarter ended June 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  4,948,740  shares of the  registrant's  common  stock,  no par value
outstanding as of June 30, 1997.


<PAGE>


                          GUM TECH INTERNATIONAL, INC.
                                   FORM 10-QSB
                                      INDEX





Part I   Financial Information                                          Page

         Note for Restatement of Financial Information                    1

         Item 1.   Condensed Balance Sheet as of
                   June 30, 1997                                          2

                   Condensed Statements of Operations
                   for the three months ended June 30, 1997
                   and 1996                                               4

                   Condensed Statements of Operations
                   for the six months ended June 30, 1997
                   and 1996                                               5

                   Condensed Statements of Cash Flows
                   for the six months ended June 30, 1997
                   and 1996                                               6

                   Notes to Condensed Financial Statements                7

         Item 2.   Management's Discussion and Analysis of
                   Financial Condition and Results of Operations          8

Part II  Other Information and Signatures                                 13


<PAGE>


Restatement of Financial Information  

     The Company has restated its financial  statements for the six months ended
June 30, 1997 to eliminate the financial  impact of barter credit  transactions.
The  Company  took this  action as a result of an inquiry  by The  Nasdaq  Stock
Market and subsequent  discussions  with the Securities and Exchange  Commission
concerning the Company's accounting for its barter transactions.

     The Company entered into barter agreements with Active Media Services, Inc.
in December, 1996 and SKR Resources,  Inc. in May, 1997. The barter credits were
to be used for advertising, packaging and travel expenses, among other items, to
launch the Company's  branded products in several retail markets.  These credits
would have  reduced  the cash  portion of the  Company's  obligations  for these
services.  The Company recorded the barter  transactions as revenue based on the
wholesale  price of each product  bartered.  By September  30, 1997,  cumulative
revenues   attributable   to  barter   sales  for  fiscal  1996  and  1997  were
approximately $4.3 million.

     Under the  restatement,  the Company has recorded the barter  credits in an
amount equal to the carrying value of the  inventory,  which was reduced to zero
prior to the exchange.  Therefore,  no amounts have been recorded for the barter
credits.

     Also,  in March,  1997,  the Company sold an aggregate of $2.53  million in
convertible debentures.  These debentures had a beneficial conversion feature to
the investors that resulted in a $665,790  non-cash charge to interest  expense.
In  accordance  with a newly issued  pronouncement  by the Emerging  Issues Task
Force published in mid-1997, the Company restated its financial statements.

     In the opinion of management, all material adjustments necessary to correct
the financial statements have been recorded.




                                                                               1




<PAGE>




                          GUM TECH INTERNATIONAL, INC.
                            CONDENSED BALANCE SHEET
                                 June 30, 1997
                                  (Unaudited)
 
                                     ASSETS
                                                                          *
Current Assets:                                                          
         Cash and cash equivalents                                 $  1,970,467
         Restricted cash                                                 55,836
         Accounts receivable, net of allowance
           for doubtful accounts of $33,506                             429,822
         Inventories                                                    921,779
         Current portion of notes receivable                            414,130
         Accrued interest                                                44,697
         Prepaid expenses and other                                     142,044
                                                                   ------------

                  Total Current Assets                                3,978,775
                                                                   ------------

Property and Equipment, at cost:
         Machinery and production equipment                           3,427,510
         Office furniture and equipment                                 127,434
         Leasehold improvements                                         190,526
                                                                   ------------

         Total Property and Equipment                                 3,745,470

         Less accumulated depreciation                                 (745,387)
                                                                   ------------

                  Net Property and Equipment                          3,000,083
                                                                   ------------

Other Assets:
         Notes receivable                                                66,000
         Intangible assets, net of accumulated amortization             238,349
         Deposits and other                                             253,553
                                                                   ------------

                  Total Other Assets                                    557,902
                                                                   ------------

                  Total Assets                                     $  7,536,760
                                                                   ============


*    Amounts  have been  restated for certain  items as more fully  described in
     Note 2 - Restatement of Financial Information.



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


                                                                               2

<PAGE>
 
                          GUM TECH INTERNATIONAL, INC.
                            CONDENSED BALANCE SHEET
                                 June 30, 1997
                                  (Continued)
                                  (Unaudited)
 
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                         *
Current Liabilities:                                                  
         Accounts Payable                                          $    431,582
         Accrued interest                                                69,384
         Unearned revenue                                                10,170
         Current portion of long-term debt                              225,294
                                                                   ------------

                  Total Current Liabilities                             736,430
                                                                   ------------
Long Term Debt:
         Notes Payable                                                2,530,000
         Equipment Lease Obligations                                  1,377,120
                                                                   ------------

                  Total Long Term Debt                                3,907,120
                                                                   ------------

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,
           4,948,740 shares issued and outstanding                    7,965,060
         Additional paid in capital                                     665,790
         Retained Earnings (Deficit)                                 (5,737,640)
                                                                   ------------

                  Total Stockholders' Equity                          2,893,210
                                                                   ------------

                  Total Liabilities and Stockholders' Equity       $  7,536,760
                                                                   ============

*    Amounts  have been  restated for certain  items as more fully  described in
     Note 2 - Restatement of Financial Information.


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


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


                                                                     Three months ended June 30,
                                                                ------------------------------------
                                                                    1997 *                  1996
                                                                ------------------------------------
  
<S>                                                             <C>                      <C>        
Net Sales                                                       $   584,077              $ 1,153,894

Cost of Sales                                                       961,896                  543,879
                                                                -----------              -----------

         Gross Profit                                              (377,819)                 610,015

Operating Expenses                                                  757,788                  994,072
Research and Development                                             21,247                   18,978
                                                                -----------              -----------

         Income  (Loss) From Operations                          (1,156,854)                (403,035)
                                                                -----------              -----------

Other Income (Expense):
   Interest and Other Income                                         50,481                   32,462
   Interest Expense                                                (120,507)                 (58,968)
                                                                -----------              -----------

         Total Other Income (Expense)                               (70,026)                 (26,506)
                                                                -----------              -----------

Income (Loss) Before Provision For Income Taxes                  (1,226,880)                (429,541)

Provision (benefit) for income taxes                                   --                    (90,729)
                                                                -----------              -----------

Net Income (Loss)                                               $(1,226,880)             $  (338,812)
                                                                ===========              ===========

Net Income (Loss) Per Share of Common Stock:
  Primary:
     Weighted Average Number of Common Shares Outstanding         6,884,492                4,466,630
                                                                ===========              ===========
      Net Income (Loss) Per Share of Common Stock               $      (.18)             $     (0.08)
                                                                ===========              ===========

  Fully Diluted:
     Weighted Average Number of Common Shares Outstanding         6,884,492                4,466,630
                                                                ===========              ===========
      Net Income (Loss) Per Share of Common Stock               $      (.18)             $     (0.08)
                                                                ===========              ===========



*    Amounts  have been  restated for certain  items as more fully  described in
     Note 2 - Restatement of Financial Information.



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

                                                                               4
</TABLE>

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


                                                                        Six months ended June 30,
                                                                  ------------------------------------
                                                                      1997 *                   1996
                                                                  ------------------------------------
 
<S>                                                               <C>                      <C>        
Net Sales                                                         $ 1,307,688              $ 2,044,531

Cost of Sales                                                       2,128,349                1,069,832
                                                                  -----------              -----------

         Gross Profit                                                (820,661)                 974,699

Operating Expenses                                                  1,385,181                1,624,415
Research and Development                                               71,217                   50,773
                                                                  -----------              -----------

         Income  (Loss) From Operations                            (2,277,059)                (700,489)
                                                                  -----------              -----------

Other Income (Expense):
   Interest and Other Income                                           81,703                   45,733
   Interest Expense                                                  (859,950)                (137,611)
                                                                  -----------              -----------

         Total Other Income (Expense)                                (778,247)                 (91,878)
                                                                  -----------              -----------

Income (Loss) Before Provision For Income Taxes                    (3,055,306)                (792,367)

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

Net Income (Loss)                                                 $(3,055,306)             $  (579,024)
                                                                  ===========              ===========

Net Income (Loss) Per Share of Common Stock:
  Primary:
     Weighted Average Number of Common Shares Outstanding           6,878,995                3,974,103
                                                                  ===========              ===========
      Net Income (Loss) Per Share of Common Stock                 $      (.44)             $     (0.15)
                                                                  ===========              ===========

  Fully Diluted:
     Weighted Average Number of Common Shares Outstanding           6,878,995                3,974,103
                                                                  ===========              ===========
      Net Income (Loss) Per Share of Common Stock                 $      (.44)             $     (0.15)
                                                                  ===========              ===========



*    Amounts  have been  restated for certain  items as more fully  described in
     Note 2 - Restatement of Financial Information.


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

                                                                               5
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                          GUM TECH INTERNATIONAL, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
 
                                                                                Six months ended June 30,
                                                                            --------------------------------
                                                                                1997 *                1996
                                                                            ---------------------------------
Cash Flows From Operating Activities:
<S>                                                                         <C>                  <C>  
     Net income (loss)                                                      $(3,055,306)         $  (579,024)
     Adjustments to reconcile net income (loss) to cash (used)
        by operating activities:
                  Depreciation                                                  285,984              183,512
                  Amortization                                                   21,299                 --
                  Interest expense form beneficial conversion
                    feature of notes payable                                    665,790                 --
                  Deferred income taxes                                            --               (215,412)
                  Accrued interest on notes receivable                          (44,697)                --
                  Changes in assets and liabilities:
                  (Increase) decrease in accounts receivable                    324,050             (287,463)
                  Decrease in income tax receivable                             234,440                 --
                  (Increase) decrease in inventories                            445,165             (561,215)
                  (Increase) in prepaid expenses and other                      (78,525)             (96,725)
                  (Increase) decrease in deposits and other                     158,715             (175,245)
                  Increase in accounts payable and accrued expenses             102,701                3,441
                  (Decrease) in customer deposits                               (55,330)             (36,959)
                                                                            -----------          ----------- 
                  
                  Net Cash (Used) By Operating Activities                      (995,714)          (1,765,090)
                                                                            -----------          ----------- 

Cash Flows From Investing Activities:
                  Capital expenditures                                         (147,585)            (614,056)
                  Increase in notes receivable                                 (164,130)            (150,000)
                                                                            -----------          -----------

                  Net Cash (Used) By Investing Activities                      (311,715)            (764,056)
                                                                            -----------          -----------

Cash Flows From Financing Activities:
                  Proceeds from borrowing                                     2,530,000              706,397
                  Principal payments on notes payable                          (109,207)          (2,485,042)
                  Issuance of common stock                                         --              8,400,000
                  Debt issuance costs incurred                                 (259,648)                --
                  Offering costs incurred                                          --             (1,277,807)
                                                                            -----------          -----------

                  Net Cash Provided By Financing Activities                   2,161,145            5,343,548
                                                                            -----------          -----------

                  Net Increase in Cash and Cash Equivalents                     853,716            2,814,402

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

                  Cash and Cash Equivalents at End of Period                $ 1,970,467          $ 3,317,729
                                                                            ===========          ===========

Supplemental Disclosure of Cash Flow Information:
                  Cash paid during the period for:
                           Interest                                         $   103,477          $   244,973
                           Income taxes                                            --                 23,165

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


*    Amounts  have been  restated for certain  items as more fully  described in
     Note 2 - Restatement of Financial Information.


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

                                                                               6



</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 six months ended
     June 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.   Restatement of Financial Information

     The Company has restated its financial  statements for the six months ended
     June  30,  1997  to  eliminate  the  financial   impact  of  barter  credit
     transactions. The company took this action as a result of an inquiry by The
     Nasdaq Stock Market and  subsequent  discussions  with the  Securities  and
     Exchange  Commission  concerning  the Company's  accounting  for its barter
     transactions.

     The Company entered into barter agreements with Active Media Services, Inc.
     in December, 1996 and SKR Resources,  Inc. in May, 1997. The barter credits
     were to be used for advertising, packaging and travel expenses, among other
     items, to launch the Company's  branded products in several retail markets.
     These  credits  would  have  reduced  the  cash  portion  of the  Company's
     obligations   for  these   services.   The  Company   recorded  the  barter
     transactions  as  revenue  based on the  wholesale  price  of each  product
     bartered. By September 30, 1997, cumulative revenues attributable to barter
     sales for fiscal 1996 and 1997 were approximately $4.3 million.

     Under the  restatement,  the Company has recorded the barter  credits in an
     amount equal to the carrying value of the  inventory,  which was reduced to
     zero prior to the  exchange.  Therefore,  no amounts have been recorded for
     the barter credits.
 
     Also,  in March,  1997,  the Company sold an aggregate of $2.53  million in
     convertible  debentures.  These  debentures  had  a  beneficial  conversion
     feature to the  investors  that resulted in a $665,790  non-cash  charge to
     interest  expense.  In accordance with a newly issued  pronouncement by the
     Emerging Issues Task Force published in mid-1997,  the Company restated its
     financial statements.

     In the opinion of management, all material adjustments necessary to correct
     the  financial   statements  have  been  recorded.   The  impact  of  these
     adjustments on the Company's  financial  results as originally  reported is
     summarized below:

                              Quarter Ended                Six Months Ended 
                              June 30, 1997                 June 30, 1997
                       --------------------------    --------------------------
                       As reported    As restated    As reported    As restated

Net sales              $ 1,983,533    $   584,077    $ 4,411,355    $ 1,307,688
Net income (loss)          150,550     (1,226,880)       692,125     (3,055,306)
Net income (loss)
  per share                    .03           (.18)           .12           (.44)
Retained earnings 
 (deficit) end of 
  period                (1,237,697)    (5,737,640)    (1,237,697)    (5,737,640)

3.   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 issuable 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).
   

                                                                               7

<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 has 39 employees  and by the end of 1996 the Company  produced  100% of
its chewing gum products.

     The Company  distributes its nutrient and therapeutic  chewing gum products
to many of the nation's top drugstore  chains,  including  Rite-Aid,  Walgreens,
Drug Emporium, Longs, Thrifty, Sav-On, Phar-Mor, Eckard and Payless. The Company
also has a strong nationwide position in the mass market chains (Target,  Kmart,
Meijer), major supermarket chains (Safeway, 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 Eastern Europe.  The Company is also involved in many
private  label  endeavors,  including  the research and  development  of various
smoking cessation products.


Results of  Operations  for the Three Months Ended June 30, 1997 Compared to the
Three Months Ended June 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:
<TABLE>
<CAPTION>


                                                            Quarters Ended June 30,
                                                            -----------------------
                                                       1997  *                                 1996
<S>                                         <C>                  <C>               <C>              <C> 
Net Sales                                   $  584,077           100%              $1,153,894       100%
Cost of sales                                  961,896           165                  543,879        47
Gross profit                                  (377,819)          (65)                 610,015        53
Operating expenses                             757,788           130                  994,072        86
Research and development                        21,247             3                   18,978         2
Income (loss) from operations               (1,156,854)         (198)                 (403,035)      (35)
Interest and other income                       50,481             9                   32,462         3
Interest expense                              (120,507)           21                  (58,968)        5
Provision (benefit) for income taxes                 -             -                  (90,729)       (8)
Net income (loss)                           (1,226,880)         (210)                 (338,812)      (29)


</TABLE>

*    Amounts  have been  restated for certain  items as more fully  described in
     Note 2 - Restatement of Financial Information.


                                                                               8

<PAGE>


     Net Sales.  Net sales  decreased by  $569,817,  or 49%, to $584,077 for the
three months  ended June 30, 1997  compared to  $1,153,894  for the three months
ended June 30, 1997.  While the majority of the Company's  sales were from chain
drug  stores  and  private  label   customers,   a   significant   reduction  in
international sales led to the decrease.

     Cost of Sales.  Cost of sales  increased  118% to  $961,896  or 165% of net
sales for the three months  ended June 30, 1997  compared to $543,879 or 47 % of
net sales for the three months ended June 30, 1996. The primary  reasons for the
increase is the Company's  sales under its Barter  Agreements have been recorded
at a zero value with a cost of sale of  $308,140.  In  addition,  the  Company's
manufacturing  facility has been  operating at minimal  capacity  resulting in a
higher price per pound of gum.

     Gross  Profit.  Gross  profit,  as  a  percentage,  decreased  by  118%  to
$(377,819)  or (65)% of net sales  for the three  months  ended  June 30,  1997,
compared  to  $610,015  or 53% of net  sales for the same  period  in 1996.  The
decrease in gross profit percentage was directly related to cost of sales.

     Operating  Expenses.  Operating  expenses  were  $757,788,  a  decrease  of
$236,284 for the three months ended June 30, 1997 compared to the same period in
1996.  Approximately  $387,497 of these operating  expenses were attributable to
the  operations of the  manufacturing  plant,  of which,  $133,613 were directly
related  to  depreciation  of  the  plant's  manufacturing  equipment.   Factors
contributing  to  a  decrease  in  non-manufacturing   operating  expenses  were
primarily related to advertising of $147,378 for the three months ended June 30,
1997  versus   $230,985  for  the  same  period  in  1996.   Other   significant
non-manufacturing   operating  expenses  were  administrative  management  labor
($176,334),   travel  and  trade  shows   ($129,159),   accounting,   legal  and
professional  consulting fees ($96,940),  art/production  fees ($69,735) general
administrative labor ($47,978), and sales labor ($32,300).

     Research  and  Development.  Research  and  development  expenditures  were
$21,247 for the three months  ended June 30,  1997,  compared to $18,978 for the
same period in 1996. The majority of these costs were related to the formulation
of the following:  new flavor High Gear, an 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  $50,481,  an increase of $18,019 for the three  months ended June 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 $120,507 an
increase of $61,539 for the three  months  ended June 30,  1997,  primarily as a
result of the Company issuing  $2,530,000 of subordinated  convertible  notes in
February, 1997.

     Net Income (Loss).  Net loss increased to $(1,226,880) for the three months
ended June 30, 1997 compared to a net loss of ($338,812)  for the same period in
1996.




                                                                               9
<PAGE>



Results of Operations for the Six Months Ended June 30, 1997 Compared to the Six
Months Ended June 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:

<TABLE>
<CAPTION>


                                                           Six Months Ended June 30,
                                                           -------------------------
                                                       1997  *                            1996

<S>                                          <C>               <C>               <C>             <C> 
Net Sales                                    $1,307,688        100%              $2,044,531      100%
Cost of sales                                 2,128,349        163                1,069,832       52
Gross profit                                   (820,661)       (63)                 974,699       48
Operating expenses                            1,385,181        106                1,624,415       80
Research and development                         71,217          5                   50,773        2
Income (loss) from operations                (2,277,059)      (174)                (700,489)     (34)
Interest and other income                        81,703          6                   45,733        3
Interest expense                               (859,950)        66                 (137,611)       7
Provision (benefit) for income taxes                  -          -                 (213,343)     (10)
Net income (loss)                            (3,055,306)      (234)                 (579,024)     (28)
</TABLE>


*    Amounts  have been  restated for certain  items as more fully  described in
     Note 2 - Restatement of Financial Information.


     Net Sales.  Net sales decreased by $736,843,  or 36%, to $1,307,688 for the
six months ended June 30, 1997 compared to  $2,044,531  for the six months ended
June 30, 1997.  While the majority of the  Company's  sales were from chain drug
stores and international customers, zero sales to National Distributing Group, a
former major customer, contributed to the decrease.

     Cost of Sales.  Cost of sales  increased  111% to $2,128,349 or 163% of net
sales for the six months ended June 30, 1997  compared to  $1,069,832  or 52% of
net sales for the six months  ended June 30, 1996.  The primary  reasons for the
increase is the Company's  sales under its Barter  Agreements have been recorded
at a zero value with a cost of sale of  $617,143.  In  addition,  the  Company's
manufacturing  facility has been  operating at minimal  capacity  resulting in a
higher price per pound of gum.

     Gross Profit.  Gross profit decreased by 111% to $(820,661) or (63)% of net
sales for the six months ended June 30, 1997, compared to $974,699 or 48% of net
sales for the same period in 1996.  The  decrease in gross  profit was  directly
related to cost of sales.

     Operating  Expenses.  Operating  expenses  were  $1,385,181,  a decrease of
$239,234 for the six months  ended June 30, 1997  compared to the same period in
1996.  Approximately  $782,784 of these operating  expenses were attributable to
the  operations of the  manufacturing  plant,  of which,  $265,183 were directly
related  to  depreciation  of  the  plant's  manufacturing  equipment.   Factors
contributing  to  a  decrease  in  non-manufacturing   operating  expenses  were
primarily  related to  advertising of $183,258 for the six months ended June 30,
1997  versus   $319,925  for  the  same  period  in  1996.   Other   significant


                                                                              10

<PAGE>


non-manufacturing   operating  expenses  were  administrative  management  labor
($350,957),   travel  and  trade  shows   ($225,118),   accounting,   legal  and
professional   consulting  fees   ($185,019),   general   administrative   labor
($113,273), art/production fees ($107,105) and sales labor ($64,675).

     Research  and  Development.  Research  and  development  expenditures  were
$71,217 for the six months ended June 30, 1997, compared to $50,773 for the same
period in 1996.  The majority of these costs were related to the  formulation of
the  following:  Vita ACES+,  an  anti-oxidant  gum;  Chew and Sooth Zinc gum, a
throat  soother;  High Gear,  an 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  $81,703,  an increase of $35,970  for the six months  ended June 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 $859,950 an
increase of $722,339 for the six months ended June 30, 1997.  The increase was a
result  of  a  beneficial   conversion   feature   received  by  investors  that
participated  in the Company's  convertible  debentures  issued on March 6, 1997
which resulted in a $665,790 non-cash charge to interest expense.

     Net Income (Loss).  Net loss increased to  $(3,055,306)  for the six months
ended June 30,  1997  compared to a net loss  ($579,024)  for the same period in
1996.

Liquidity and Capital Resources

     As of June 30,  1997,  the  Company's  working  capital  was $3.24  million
compared  to  $2.90  million  at  December  31,  1996.  Cash  used by  operating
activities  was $995,714  for the six months ended June 30, 1997  primarily as a
result of the Company's net loss for six months ended June 30, 1997.

     Investing  activities  consumed  $311,715 in cash for the six months  ended
June 30, 1997 compared to $764,056 of cash used in the same period of 1996. This
was  primarily  from  an  increase  in  a  note  receivable  to a  former  major
distributor and acquisition of additional manufacturing equipment.

     Financing  activities  provided $2,161,145 in cash for the six months ended
June 30, 1997 compared to  $5,343,548  in cash for the same period in 1996.  The
cash  provided  for 1996 was  primarily  a result  of the  Company  successfully
completing  its IPO on April 24, 1996 less the repayment of notes  payable.  The
cash provided for 1997 was primarily from the sale of an aggregate of $2,530,000
of convertible debentures on March 6, 1997.

     On August 7, 1997, the Company announced that 457,400 of its 460,000 Common
Stock Purchase Warrants  (99.43%)  outstanding as of July 21, 1997 were redeemed
at an exercise  price of $7.50 per share for total gross proceeds to the Company
of $3,430,500.


                                                                              11
<PAGE>

                                                                             
Outlook

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

     The Company expects to support CigArrest,  the re-formulated ChromaTrim and
CitrusSlim  weight  loss/control  gums  and  all  other  products  with  various
advertising campaigns and direct response.

     The $3.4 million received from the Common Stock Purchase Warrant redemption
will be added to the Company's working capital.  It is expected that portions of
the working  capital may be used to expand or  completely  rebuild the Company's
manufacturing and warehouse facilities when demand outstrips capacity.
       
     The Company's  future results of operations  and the 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.
       
                                                                              12




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

     None

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

     None

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

     At the 1997 Annual  Meeting of  Stockholders,  held on June 13,  1997,  the
Stockholders approved several proposals as follows:

     (1)  Proposal to elect six  directors to serve until their  successors  are
elected.

           Name                   For              Abstain
           ----                   ---              -------

     Richard Ratcliff          2,007,242          2,881,780
     Gerald Kern               4,753,577            135,445
     Gary Kehoe                4,840,737             48,285
     Richard Bernstein         1,923,952          2,965,070
     William Meris             2,489,307          2,399,715
     Robert Kwait              4,851,737             37,285

     (2)  Proposal to approve an increase in the number of shares  reserved  for
issuance  under the Company's  1995 Stock Option Plan from  1,200,000  shares to
2,000,000 shares.

                    For                       2,984,582
                    Against                     423,778
                    Abstain                      82,400
                                              ---------
                    Total                     3,490,076
                                              =========
Item 5.  Other
         -----

     None




                                                                              13
<PAGE>



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

         A.  Exhibits
                  10.27  Agreement with SKR Resources, Inc.
                  27.  Financial Data Schedule

         B.  Reports on Form 8-K
                  None





                                                                              14
<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
authorize


Gum Tech International, Inc.


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

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


March 25,1998