<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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 quarterly period ended September 30, 1997
                                       OR
              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                               OF THE EXCHANGE ACT
                For the transition period from ______ to _______

                         Commission file number 0-23145

                                  ZYMETX, INC.
             (Exact name of registrant as specified in its charter)

             Oklahoma                                73-1444040
     (State or other jurisdiction         (I.R.S. Employer Identification No.)
   of incorporation or organization)

      800 Research Parkway, Suite 100                   73104
        Oklahoma City, Oklahoma                       (Zip Code)
   (Address of principal executive offices)

          Issuer's telephone number, including area code: 405-271-1314

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
                                        Yes                  No  X
                                           -----               -----
                                                      (Not subject to filing)

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

  6,620,630 shares of Common stock, $.001 par value, issued and outstanding at
                                  November 18, 1997

Transitional Small Business Disclosure Format (check one): Yes      No  X
                                                              ----    ----
<PAGE>   2
                                  ZYMETX, INC.
                                  FORM 10-QSB
                                     INDEX

<TABLE>


PART I  -  FINANCIAL INFORMATION                                                Page

<S>                                                                              <C>
Item 1.    Financial Statements (Unaudited)

           Balance Sheets - June 30, 1997 and September 30, 1997................ 2
                                                                                 
           Statements of Operations - Three Months Ended September 30,           
           1996 and 1997 and Cumulative from Inception to September 30, 1997.... 3
                                                                                 
           Statements of Cash Flows - Three Months Ended September 30,           
           1996 and 1997 and Cumulative from Inception to September 30, 1997.... 4
                                                                                 
           Notes to Financial Statements........................................ 5
                                                                                                          
Item 2.    Management's Discussion and Analysis or Plan of Operations........... 9

PART II  - OTHER INFORMATION

Item 1.    Legal Proceedings....................................................17

Item 2.    Changes in Securities................................................17

Item 3.    Defaults Upon Senior Securities......................................18

Item 4.    Submission of Matters to a Vote of Security Holders..................18

Item 5.    Other Information....................................................20

Item 6.    Exhibits and Reports on Form 8-K.....................................21

SIGNATURES......................................................................22
</TABLE>

                                        
                                       1
<PAGE>   3
                                  ZymeTx, Inc.
                          (A Development Stage Company)

                                 Balance Sheets

<TABLE>
<CAPTION>
                                                                                                          SEPTEMBER 30, 1997
                                                                                                    ------------------------------
                                                                                                                      PRO FORMA FOR
                                                                                   JUNE 30,                           THE OFFERING
                                                                                     1997              ACTUAL            (NOTE 3)
                                                                                  ------------      ------------      ------------
                                                                                                      (Unaudited)        (Unaudited)
<S>                                                                               <C>               <C>               <C>         
ASSETS
Current assets:
   Cash and cash equivalents                                                      $    226,312      $  4,101,300      $ 22,694,399
   Marketable securities, available-for-sale                                         1,594,382         1,069,704         1,069,704
   Inventory                                                                            99,107           596,562           596,562
   Prepaid insurance and other                                                           9,210            81,330            81,330
                                                                                  ------------      ------------      ------------
Total current assets                                                                 1,929,011         5,848,896        24,441,995

Property, equipment and leasehold improvements, net                                    295,393           351,740           351,740
Proprietary technology and other intangibles, net                                      116,827           112,087           112,087
Deferred offering costs and other, net                                                  41,746           181,124                --
                                                                                  ------------      ------------      ------------
Total assets                                                                      $  2,382,977      $  6,493,847      $ 24,905,822
                                                                                  ============      ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                               $    540,025      $    326,614      $    326,614
   Other                                                                                 9,929            26,486            83,461
                                                                                  ------------      ------------      ------------
Total current liabilities                                                              549,954           353,100           410,075

Long term obligations--
   Note payable to stockholder due after one year                                      265,836           279,350           279,350
   Deferred lease rentals                                                               69,029           118,438           118,438
Redeemable preferred stock--Series B (156,250 shares
   issued and outstanding at June 30 and September 30,                                      
   1997; none after giving effect to the Offering)                                     125,000           125,000                --

Stockholders' equity:
   Preferred stock $.001 par value; 9,843,750 Series A shares authorized
     (6,318,125 shares issued and outstanding at June 30 and September 30, 1997;
     none after giving effect to the Offering)                                           6,318             6,318                --
   Preferred stock $.001 par value; 1,750,000 Series C shares authorized
     (1,437,504 shares issued and outstanding at September 30, 1997; none after
     giving effect to the Offering)                                                         --             1,438                --
   Common stock $.001 par value; 16,500,000 shares authorized (919,568 shares
     issued and outstanding at June 30 and September 30, 1997; 6,620,630 after
     giving effect to the Offering)                                                        920               920             6,621
   Additional paid-in capital                                                        4,410,198         9,333,762        33,500,266
   Deficit accumulated during the development stage                                 (3,050,890)       (3,726,143)       (9,410,592)
   Unrealized holding gains on marketable securities
     available for sale                                                                  6,612             1,664             1,664
                                                                                  ------------      ------------      ------------
Total stockholders' equity                                                           1,373,158         5,617,959        24,097,959
                                                                                  ------------      ------------      ------------
Total liabilities and stockholders' equity                                        $  2,382,977      $  6,493,847      $ 24,905,822
                                                                                  ============      ============      ============
</TABLE>

See accompanying notes to financial statements.


                                       2
<PAGE>   4
                                  ZymeTx, Inc.
                          (A Development Stage Company)

                            Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                  CUMULATIVE
                                                                                                     FROM
                                                                    THREE MONTHS ENDED           INCEPTION TO
                                                                       SEPTEMBER 30,             SEPTEMBER 30,
                                                                   1996             1997             1997
                                                               -----------      -----------      -----------

<S>                                                            <C>              <C>              <C>        
Revenues:
   Sales                                                       $     4,476      $     2,030      $    27,479
   Other                                                                --               --            1,303
                                                               -----------      -----------      -----------
Total revenues                                                       4,476            2,030           28,782

Operating expenses:
   Research and development                                        151,254          228,303        1,605,642
   Product development                                                  --          156,835          156,835
   Cost of sales                                                       387              175            2,375
   Sales and marketing                                                  --          131,541          131,541
   Acquired technology and patent costs from OMRF                  958,505               --          958,505
   General and administrative                                       88,377          201,760          967,107
                                                               -----------      -----------      -----------
Total operating expenses                                         1,198,523          718,614        3,822,005
                                                               -----------      -----------      -----------
Loss from operations                                            (1,194,047)        (716,584)      (3,793,223)

Other income (expense):
   Interest and dividend income                                     14,444           54,845          151,891
   Interest expense                                                (21,084)         (13,514)         (84,811)
                                                               -----------      -----------      -----------
Total other income (expense)                                        (6,640)          41,331           67,080
                                                               -----------      -----------      -----------
Net loss                                                        (1,200,687)        (675,253)      (3,726,143)

Preferred stock dividends                                            1,573            2,344           10,948
                                                               -----------      -----------      -----------
Net loss applicable to common stock                            $(1,202,260)     $  (677,597)     $(3,737,091)
                                                               ===========      ===========      =========== 

Net loss per common and common equivalent share                $      (.82)     $      (.46)     $     (2.56)
                                                               ===========      ===========      =========== 

Weighted average common and common equivalent shares
   outstanding                                                   1,460,592        1,460,626        1,460,578
                                                               ===========      ===========      =========== 

Supplemental net loss per common and common equivalent
   share                                                       $      (.27)     $      (.15)     $      (.83)
                                                               ===========      ===========      =========== 

Supplemental weighted average common and common equivalent
   shares outstanding                                            4,516,654        4,516,688        4,516,640
                                                               ===========      ===========      =========== 

</TABLE>


 See accompanying notes to financial statements.



                                       3
<PAGE>   5
                                  ZymeTx, Inc.
                          (A Development Stage Company)

                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                     CUMULATIVE
                                                                                                       FROM
                                                                        THREE MONTHS ENDED          INCEPTION TO
                                                                          SEPTEMBER 30,             SEPTEMBER 30,
                                                                      1996            1997              1997
                                                                  -----------      -----------      ----------- 
<S>                                                               <C>              <C>              <C>         
CASH FLOW FROM OPERATING ACTIVITIES
Net loss                                                          $(1,200,687)     $  (675,253)     $(3,726,143)
Adjustments to reconcile net loss to net cash used by
   operating activities:
     Depreciation and amortization                                     12,546           21,268           89,148
     Acquired technology and patent costs from OMRF                   336,422               --          336,422
     Accretion of interest                                             18,172           13,514           74,693
     Deferred lease rentals                                                --           49,409          118,438
     Changes in operating assets and liabilities:
       Interest receivable on marketable securities                        --           (8,278)         (24,100)
       Prepaid insurance and other                                    (31,200)         (72,120)         (82,512)
       Inventory                                                          387         (497,455)        (530,274)
       Accounts payable                                               109,490         (213,411)         326,614
       Other liabilities                                                   --           16,557           26,486
                                                                  -----------      -----------      ----------- 
Total adjustments                                                     445,817         (690,516)         334,915
                                                                  -----------      -----------      ----------- 
Net cash used by operating activities                                (754,870)      (1,365,769)      (3,391,228)

CASH FLOW FROM INVESTING ACTIVITIES
Purchase of marketable securities                                          --               --       (1,571,948)
Proceeds from maturities of marketable securities                          --          528,008          528,008
Purchase of property, equipment and leasehold improvements
                                                                      (20,857)         (72,487)        (415,166)
Purchase of inventory, proprietary technology and other
   intangibles                                                       (202,917)              --         (202,917)
                                                                  -----------      -----------      ----------- 
Net cash used by investing activities                                (223,774)         455,521       (1,662,023)

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable                                    --               --          392,510
Payments on notes payable                                            (271,692)              --         (311,271)
Proceeds from issuance of common stock                                  3,000               --            5,000
Proceeds from issuance of preferred stock--Series A                 3,377,447               --        4,383,338
Proceeds from issuance of preferred stock--Series C                        --        4,925,002        4,925,002
Deferred offering costs of preferred stock and initial public
   offering                                                            (6,040)        (139,766)        (240,028)
                                                                  -----------      -----------      ----------- 
Net cash provided by financing activities                           3,102,715        4,785,236        9,154,551
                                                                  -----------      -----------      ----------- 
Net increase (decrease) in cash                                     2,124,071        3,874,988        4,101,300

Cash and cash equivalents at beginning of period                       39,469          226,312               --
                                                                  -----------      -----------      ----------- 
Cash and cash equivalents at end of period                        $ 2,163,540      $ 4,101,300      $ 4,101,300
                                                                  ===========      ===========      ===========

SUPPLEMENTAL DISCLOSURE OF INTEREST PAID                          $     9,173      $        --      $    16,379
                                                                  ===========      ===========      ===========
</TABLE>


See accompanying notes to financial statements.



                                       4
<PAGE>   6
                                  ZymeTx, Inc.
                          (A Development Stage Company)
                    Notes to Financial Statements (Unaudited)
                               September 30, 1997


NOTE 1 - THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

THE COMPANY

ZymeTx, Inc. (the "Company" or "ZymeTx"), is a development stage biotechnology
company engaged in the discovery and development of unique products for the
diagnosis and treatment of viruses. The scientific foundation for the Company's
plan of operations is based upon the role of enzymes in the process of viral
infection. The Company's strategy is: (i) to develop therapeutic and diagnostic
products for a broad range of viral diseases; and (ii) to use revenues from
marketing "ZstatFlu(TM)," the Company's first diagnostic product, to sustain a
comprehensive viral therapeutic research and development program and to continue
the Company's diagnostic research and development program.

SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB as prescribed by the Securities and
Exchange Commission ("SEC"). Such financial statements, in the opinion of
management, include all adjustments (consisting only of normal, recurring items)
necessary for their fair presentation in conformity with generally accepted
accounting principles. These financial statements should be read in conjunction
with the financial statements and notes thereto included in the filing on Form
SB-2 (No. 333-33563) dated October 22, 1997 for an expanded discussion of the
Company's financial disclosures and accounting polices. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to the SEC rules and regulations. Interim results are not
necessarily indicative of results for the full year.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses and
related disclosures as of the date of the financial statements. Actual results
could differ from such estimates.



                                       5

<PAGE>   7
INVENTORIES

The components of inventories consist of the following:

<TABLE>
<CAPTION>
                                                                    JUNE 30,  SEPTEMBER 30,
                                                                     1997         1997
                                                                   --------   -------------
<S>                                                                <C>          <C>     
Raw materials                                                      $ 35,019     $226,032
Work in process                                                          --      306,617
Finished goods                                                       64,088       63,913
                                                                   --------     --------
                                                                   $ 99,107     $596,562
                                                                   ========     ========
</TABLE>

NET LOSS PER SHARE

Except as noted below, historical net loss per share is computed using the
weighted average number of common shares outstanding. Common equivalent shares
from stock options, convertible preferred stock and warrants are excluded from
the computation as their effect is antidilutive, except that, pursuant to the
SEC Staff Accounting Bulletins, common and common equivalent shares issued
during the period beginning 12 months prior to the initial filing of the public
offering at prices substantially below the public offering price ("Cheap Stock")
have been included in the calculation as if they were outstanding for all
periods presented (using the treasury stock method and the assumed public
offering price for stock options and warrants and the if-converted method for
convertible preferred stock).

Supplemental net loss per share is computed as noted above except that it also
includes the common stock equivalent shares related to convertible preferred
stock which automatically converted to common stock in connection with the
closing of the initial public offering.

Historical net loss per share information is as follows:

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED             CUMULATIVE
                                                       SEPTEMBER 30,                  FROM
                                                    1996             1997           INCEPTION
                                                  --------         --------         -------- 
<S>                                               <C>              <C>              <C>      
Net loss per common share                         $  (1.37)        $   (.74)        $ (10.82)
                                                  ========         ========         ======== 
Weighted average common shares outstanding         877,089          919,568          345,312
                                                  ========         ========         ======== 
</TABLE>


In February 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings Per Share," which is required to be adopted by the Company in the
reporting period ending December 31, 1997. At that time, the Company will be
required to change the method currently used to compute net loss per share.
Under the new requirements for calculating basic earnings per share, the effect
of stock options will be excluded. The Company has determined the impact of SFAS
128 on the calculation of net loss per share, exclusive of the Cheap Stock rules
of the SEC, would not be material.



                                       6

<PAGE>   8
NOTE 2 - STOCKHOLDERS' EQUITY

In July 1997, the Company's stockholders approved an amendment to the Company's
Certificate of Incorporation for the purpose of: (i) increasing the number of
authorized shares of Common Stock from 16,500,000 shares to 30,000,000 shares
and increasing the number of authorized shares of Preferred Stock from
10,000,000 shares to 12,000,000 shares; (ii) providing for a one-for-four
reverse stock split; and (iii) the establishment and designation of 1,750,000
shares of Series C Convertible Preferred Stock ("Series C Preferred Stock"). As
a consequence of the reverse stock split, the rate of conversion of the Series A
Convertible Preferred Stock ("Series A Preferred Stock") and Series B Redeemable
Convertible Preferred Stock ("Series B Preferred Stock") was adjusted to reflect
the split. All historical financial information included in the accompanying
financial statements has been adjusted retroactively to give effect to the
reverse stock splits.

In August 1997 the Company closed a private placement of 1,437,504 shares of
Series C Preferred Stock (the "1997 Private Placement") at a price of $4.00 per
share which, net of costs and expenses, resulted in net proceeds of $4,925,002.

NOTE 3 - PUBLIC OFFERING

On November 3, 1997, the Company closed an initial public offering of 2,300,000
shares of common stock, $.001 par value ("Common Stock"). Concurrent with the
closing, an underwriter overallotment option was exercised to purchase 345,000
shares of Common Stock. In the offering, the Company issued a total of 2,645,000
shares at a price of $8.00 per share which resulted in proceeds of approximately
$18.4 million, net of offering expenses and underwriter discounts and
nonaccountable expense allowances. As a consequence of the closing of the
offering, all of the Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock outstanding were automatically converted into shares of
Common Stock.

In the second quarter of fiscal 1998, the Company will be required to recognize
as a charge to retained earnings a noncash dividend related to the Series C
Preferred Stock converted to Common Stock and related outstanding warrants to
acquire Common Stock. The noncash dividend of approximately $5.7 million
represents the difference in the price received per share for the Series C
Preferred Stock and the price received per share for the Common Stock issued in
such public offering. Such dividend will also reduce net income applicable to
Common Stock and, accordingly, reduce earnings per share in the period the
offering was consummated. Such noncash dividend has been reflected in the
accompanying unaudited pro forma balance sheet as of September 30, 1997.



                                       7

<PAGE>   9
The accompanying unaudited pro forma balance sheet as of September 30, 1997
reflects the historical financial position of the Company as of that date
adjusted to give pro forma effect to the public offering and the related
conversion of the Series A, B, C Preferred Stock into Common Stock and the sale
of 2,645,000 shares of the Company's Common Stock at the offering price of $8.00
per share, net of commissions and expenses as if these transactions had occurred
as of September 30, 1997.

<TABLE>
<S>                                  <C>         
Offering proceeds                    $ 21,160,000
Less:
  Commissions                          (1,692,800)
  Expenses                             (1,112,200)
                                     ------------
Net proceeds                         $ 18,355,000
                                     ============
</TABLE>



                                       8
<PAGE>   10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

When used in this discussion, the words "believes," "anticipated" and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those projected. Readers are cautioned not to place
undue reliance on these forward-looking statements that speak only as of the
date hereof. The Company undertakes no obligation to publicly release the result
of any revisions to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

OVERVIEW

ZymeTx, Inc. (the "Company" or "ZymeTx"), is a development stage biotechnology
company engaged in the discovery, development, and commercialization of unique
products for the diagnosis and treatment of viruses. The scientific foundation
for the Company's plan of operations is based upon the role of enzymes in the
process of viral infection. The Company's strategy is: (i) to develop
therapeutic and diagnostic products for a broad range of viral diseases; and
(ii) to use revenues from marketing "ZstatFlu(TM)," the Company's first
diagnostic product, to sustain a comprehensive viral therapeutic research and
development program and to continue the Company's diagnostic research and
development program.

Because the Company's initial products are expected to be in the area of
influenza diagnostics and the Company's near term therapeutic research emphasis
is in the area of influenza, the Company's future revenues are likely to be
seasonal, concurrent with the times of the year in which influenza is active.
Consequently, so long as the U.S. influenza market remains the principal market
for the Company's products, the Company's revenues will be concentrated in the
second and third quarters of each fiscal year.

In September 1997, the Company received clearance from the FDA to market
ZstatFlu(TM) in the United States. The Company is currently manufacturing for
sale 1,000,000 units of ZstatFlu(TM). Manufacturing of the units is performed
through a number of subcontractors. Distributor agreements have been entered
into with Bergen Brunswig and McKessen General Medical. It is anticipated that
these two distributors will distribute a majority of the units manufactured in
fiscal 1998.

"ViraZyme," "ViraSTAT," and ZstatFlu are trademarks owned by or licensed to the
Company.

PLAN OF OPERATIONS

The Company's plan of operations for the next 12 months is to: (i) establish
distribution channels and market ZstatFlu(TM); and (ii) continue viral
therapeutic and diagnostic research and development.

The Company believes it has adequate cash and securities available for sale to
fund the planned operations for the next 12 months. Additional capital is needed
to fund larger inventories for planned sales in fiscal year 2000 and future
periods, and for scaled-up research and development programs.



                                       9

<PAGE>   11

Research will center on continued development of compounds for the treatment of
influenza and extension of ViraZyme technology to additional disease targets.
The extent to which the Company increases research and development expense in
fiscal 1999 is dependent upon revenues generated in fiscal 1998 from
ZstatFlu(TM).

The Company will purchase equipment in connection with the expansion of its
research program. The anticipated amount of equipment purchases during the next
12 months is $.8 million, to be funded from existing working capital. Additional
equipment will be required if the Company establishes its own full-scale
production facility; the Company expects to finance the equipment for such a
facility through debt or lease financing. The Company may lease a manufacturing
facility; however, if purchase terms were favorable the Company would finance
such a purchase through debt financing.

RESULTS OF OPERATIONS

PRODUCT SALES

Since its inception the Company has been a development stage company engaged
primarily in research and product development activities, and has not generated
any significant revenues. The Company expects to recognize revenues from the
sale of ZstatFlu(TM) in the 1997-1998 influenza season, due to the receipt of
FDA clearance of ZstatFlu(TM) in September 1997, the completion of manufacturing
scale-up and securing distribution agreements with medical distributors.

RESEARCH AND DEVELOPMENT

Research and development spending increased by approximately 51% from first
quarter 1997 to first quarter 1998 due an increase in research and development
relating to ViraZyme(R) technology, which was concentrated principally in
securing FDA clearance for ZstatFlu(TM). During the first quarter of fiscal
1998, additional staff was hired to support increased research activities, and
this increase in personnel has continued into the second quarter of fiscal 1998.
It is anticipated that research and development expenditures will exceed $1.5
million for fiscal 1998.

PRODUCT DEVELOPMENT

Product development costs were expended in manufacturing scale-up processes for
the production of ZstatFlu(TM). A majority of these costs were expended for
development of internal manufacturing capability and monitoring of subcontracted
manufacturers. It is anticipated that product development expenditures will
exceed $.8 million for fiscal 1998.

SALES AND MARKETING

The Company has increased sales activities given the planned sales of
ZstatFlu(TM). This consists of additional sales managers and marketing
personnel. In addition, distributors training and marketing expenses relating to
ZstatFlu(TM) were recognized in the period. It is anticipated that sales and
marketing expenses will exceed $1.0 million for fiscal 1998.



                                       10

<PAGE>   12
GENERAL AND ADMINISTRATIVE

Selling, general and administrative costs have increased substantially from
first quarter 1997 to first quarter 1998 due principally to increasing staff
levels mainly in the accounting, finance and human resources area. The Company
anticipates that total, general and administrative expenses will exceed $1.3
million in fiscal 1998.

OTHER INCOME (EXPENSE)

Interest and dividend income for the first quarter of fiscal 1998 has increased
by 280% compared to the first quarter of 1997 due to the increase in average
investable funds following the closing of the Company's private placement of
Series C Preferred Stock in the first quarter of fiscal 1998.

LIQUIDITY AND CAPITAL RESOURCES

The Company has relied principally on equity financing to fund its operations
and capital expenditures. Working capital at September 30, 1997, was $5.5
million, as compared to $1.4 million at June 30, 1997. This increase was the
result of the closing of the 1997 private placement during the first quarter of
fiscal 1998, which resulted in net proceeds to the Company of approximately $4.9
million.

Subsequent to the end of the first quarter of fiscal 1998, the Company closed an
initial public offering, which resulted in net proceeds of approximately $18.4
million. The proceeds will be used for fiscal 1999 ZstatFlu(TM) unit production
beginning in the third quarter fiscal 1998. The Company is planning on producing
4 million ZstatFlu(TM) units for fiscal 1999.

The Company believes that additional financing may be required to meet the
planned operating needs beyond fiscal 1999 if significant positive cash flows
are not generated from commercial activities on a timely basis. Such needs would
include the expenditure of substantial funds to continue and expand research and
development activities, conduct existing and planned pre-clinical studies and
human clinical trials and to support the increasing working capital requirements
of a growing commercial infrastructure including manufacturing, sales and
marketing. As a result, the Company anticipates pursuing various financing
alternatives such as collaborative arrangements and additional public offerings
or private placements of Company securities. If such alternatives are not
available, the Company may be required to defer or restrict certain commercial
activities, delay or eliminate expenditures for certain of its potential
products under development or to license third parties to commercialize products
or technologies that the Company would otherwise seek to develop or
commercialize itself.

The Company has an outstanding note relating to a license of intellectual
property from OMRF. The License Note has a principal amount of $.4 million
(discounted to $.3 million) and bears no interest until May 15, 1998;
thereafter, unpaid principal bears interest at 8% per year. This obligation
requires quarterly installments of interest commencing May 15, 1998, and
commencing May 15, 1999, a principal payment of $25,000 per quarter until the
License Note is repaid.

Manufacturing expenses for ZstatFlu(TM) are estimated to be approximately $5.0
million for fiscal 1998. The Company's business plan contemplates the production
and marketing of approximately



                                       11

<PAGE>   13

1.0 million units of ZstatFlu(TM). The Company expects to produce an additional
200,000 units which will be used for demonstration and marketing purposes. The
price per unit to distributors is expected to be approximately $12 to $15.

In addition to the Company's working capital needs for fiscal 1998, the Company
will require significantly larger amounts of capital for production of inventory
for the 1998-99 influenza season. If the Company sells substantially all of the
1.0 million units of ZstatFlu(TM) produced for sale in the 1997-98 influenza
season, the Company estimates that production of ZstatFlu(TM) will be
approximately 4.0 million units for the 1998-99 influenza season. It is
anticipated that $8 million in working capital will be required to produce a
flow of units for the 1999 U.S. influenza season. The Company can give no
assurance that actual manufacturing costs will fall within the described
estimates.

To the extent that sales of ZstatFlu(TM) in fiscal 1998 do not reach 1.0 million
units, the Company will be required to reduce planned research and development
expenditures in fiscal 1999 or secure additional equity or debt capital beyond
that required for meeting fiscal 1999 inventory needs. There is no assurance
that the Company will sell all of these units.

As a consequence of the difference between the price received per share of
Common Stock in the initial public offering and the effective price received per
share in the 1997 Private Placement, the Company will be required to recognize a
preferred non-cash dividend equal to such price difference. The Company
estimates that the amount of such dividend approximates $5.7 million or $3.44
per share on 1,653,129 shares (inclusive of warrants to purchase 215,625 shares
of the Company's common stock) and will reduce net income applicable to Common
Stock and earnings per share. The recognition of the preferred dividend will be
made in the second quarter ended December 31, 1997. Recognition of a preferred
dividend will not, however, reduce cash flow from operations, reduce net income
of the Company in that quarter or increase any net loss.



                                       12

<PAGE>   14
FACTORS AFFECTING FUTURE OPERATIONS

The following is a discussion of factors that the Company believes could have an
impact on its future operations and financial performance:

          No Assurance of Successful or Timely Development of the Company's
          Therapeutic or Other Diagnostic Products

          The Company's business strategy involves the discovery and development
          of products other than ZstatFlu(TM), particularly therapeutic
          products. These products are in early stages of research and
          development and further research, development and extensive testing
          will be required to determine their technical feasibility and
          commercial viability. Until the development process for these products
          is complete, there can be no assurance that such products will perform
          in the manner anticipated by the Company, be commercially viable or
          even if commercially viable, that such products will receive FDA
          clearance. The Company may experience delays in the commercial
          introduction of these products, and such delays could be significant.
          The proposed development schedules for the Company's other diagnostic
          and therapeutic products may be affected by a variety of factors, many
          of which will not be within the control of the Company, including
          technological difficulties, proprietary technology of others, possible
          changes in government regulation and the availability of funding
          sources. Any delay in the development, introduction and marketing of
          the Company's products could result either in such products being
          marketed at a time when their cost and performance characteristics
          would not be competitive in the marketplace or in the shortening of
          their commercial lives.

          No Manufacturing Capability; Reliance on Third-Party Manufacturers

          The Company has limited experience in product manufacturing and
          currently has no facility capable of manufacturing products on the
          scale necessary for adequate market penetration. Because the Company
          does not currently have a manufacturing facility, the Company has
          engaged third-party manufacturers to produce finished units of
          ZstatFlu(TM). Delays by third-party manufacturers in delivering
          finished products in time for each influenza season could have a
          material adverse effect on the Company.

          Limitations on Protection of Intellectual Property

          The Company's success will depend, in part, on its ability to obtain
          patents and license patent rights, to maintain trade secret protection
          and to operate without infringing on the rights of other patent
          holders. The patent position of biotechnology firms for such types of
          patents generally is highly uncertain and involves complex legal and
          factual issues. Certain competitors of the Company may have filed
          applications for or have been issued patents and may obtain additional
          patents and other proprietary rights relating to virus substrates,
          chromogens, inhibitors or processes competitive with those of the
          Company. The ultimate scope and validity of such patents are presently
          unknown. If the courts uphold existing or future patents obtained by
          competitors as valid, the Company may be required to obtain licenses
          from such competitors. The extent to which such licenses will be
          available to the Company, and the costs thereof, cannot currently be
          determined.



                                       13

<PAGE>   15
         Government Regulation

         Regulation by Federal, state, local and foreign governmental
         authorities of the Company's research and development activities, as
         well as the use and sale of the Company's products at such time as they
         are commercially viable, is currently, and is expected to remain,
         significant.

         The introduction of the Company's products is governed by strict FDA
         rules and regulations. The Company's diagnostic products are governed
         by FDA 510(k) application requiring a clinical trial that compares the
         Company's products to a certain standard or to a prior cleared
         methodology.

         The testing, manufacturing, labeling, distribution, marketing and
         advertising of therapeutic products are subject to extensive regulation
         by governmental regulatory authorities in the U.S. and other countries.
         The FDA and comparable agencies in foreign countries impose substantial
         requirements on the introduction of new pharmaceutical products through
         lengthy and detailed clinical testing procedures and other costly and
         time-consuming compliance procedures. The Company's therapeutic
         compounds will require substantial clinical trials and FDA review as
         new drugs and such products are in the discovery stage of development,
         requiring significant further research, development, clinical testing
         and regulatory clearances. Due to the extended testing and regulatory
         review process required for therapeutic products before marketing
         clearance can be obtained, the Company does not expect to be able to
         commercialize any therapeutic drug for at least several years, either
         directly or through any potential corporate partners or licensees. A
         delay in obtaining or failure to obtain such approvals could have a
         material adverse effect on the Company's business and results of
         operations.

         The Company and its third-party manufacturers such as DCL are subject
         to Good Manufacturing Practices ("GMP") regulations promulgated by the
         FDA. The FDA will also inspect the Company's manufacturing facilities
         and the facilities of its third-party manufacturers on a routine basis
         for regulatory compliance with GMP regulations. Although the Company's
         employees have experience with GMP protocols, there can be no assurance
         that the Company or its third-party manufacturers can satisfy these
         requirements. The Company would not be allowed to manufacture its
         approved or cleared products in the event such GMP protocols could not
         be met.

         Management of Growth and Increasing Production Requirements

         The Company's success will depend on its ability to expand and manage
         its operations and facilities. There can be no assurance that the
         Company will be able to manage its growth, meet the staffing
         requirements of manufacturing scale-up or for current or additional
         collaborative relationships or successfully assimilate and train its
         new employees. In addition, to manage its growth effectively, the
         Company will be required to expand its management base and enhance its
         operating and financial systems. If the Company continues to grow,
         there can be no assurance that the management skills and systems
         currently in place will be adequate or that the Company will be able to
         manage any 



                                       14

<PAGE>   16

          additional growth effectively. Failure to achieve any of these goals
          could have a material adverse effect on the Company's business,
          financial condition or results of operations.

          Product Liability and Insurance

          The testing, marketing and sale of therapeutic products and, to a
          lesser degree, diagnostic products, entails an inherent risk of
          adverse effects and/or medical complications to patients and, as a
          result, product liability claims may be asserted against the Company.
          A product liability claim or product recall could have a material
          adverse effect on the Company. The Company has secured limited product
          liability insurance in the aggregate amount of $11.0 million for
          products that the Company markets. There can be no assurance that
          liability will not exceed the insured amount. In the event of a
          successful suit against the Company, insufficient insurance or lack of
          insurance would have a material adverse effect on the Company.

          Uncertainties Relating to Clinical Trials

          The Company must demonstrate through preclinical studies and clinical
          trials that its proposed therapeutic products are safe and effective
          for use in each target indication before the Company can obtain
          regulatory approvals for the commercial sale of those products. These
          studies and trials may be very costly and time-consuming.

          The rate of completion of clinical trials for either diagnostic or
          therapeutic products is dependent upon, among other factors, the rate
          of enrollment of patients. Failure to enroll an adequate number of
          clinical patients during the appropriate season could cause
          significant delays and increased costs.

          The cost to the Company of conducting human clinical trials for any
          potential product can vary dramatically based on a number of factors,
          including whether the product is a diagnostic or a therapeutic
          product, the order and timing of clinical indications pursued and the
          extent of development and financial support, if any, from corporate
          partners.

          No Assurance of Market Acceptance

          There can be no assurance that ZstatFlu(TM) or any of the Company's
          potential products, if approved or cleared by the FDA and other
          regulatory authorities, will achieve market acceptance. The degree of
          market acceptance will depend upon a number of factors, including the
          receipt and timing of regulatory approvals or clearances, the
          availability of third-party reimbursement and the establishment and
          demonstration in the medical community of the clinical safety,
          efficacy and cost-effectiveness of the Company's products and their
          advantages over existing technologies and products. There can be no
          assurance that the Company will be able to successfully market its
          potential products even if they perform successfully in clinical
          trials. Furthermore, there can be no assurance that physicians or the
          medical community in general will accept and utilize any products that
          may be developed by the Company.



                                       15

<PAGE>   17
         Dependence on Corporate Collaborations for Therapeutic Products

         The Company's strategy for the research, development and
         commercialization of its potential therapeutic products may require the
         Company to enter into various arrangements with corporate and academic
         collaborators, licensors, licensees and others. The Company may,
         therefore, be dependent upon the subsequent success of these third
         parties in performing their responsibilities. There can be no assurance
         that the Company will be able to enter into collaborative, license or
         other arrangements that the Company deems necessary or appropriate to
         develop and commercialize its potential therapeutic products, or that
         any or all of the contemplated benefits from such collaborative,
         license or other arrangements will be realized.

         Technology and Competition

         The viral diagnostic and therapeutic field is rapidly evolving, and the
         pace of technological advancement is expected to continue. Rapid
         technological development may result in the Company's products becoming
         obsolete before the Company recoups a significant portion of related
         research, development and commercialization expenses.



                                       16
<PAGE>   18
PART II. OTHER INFORMATION

Item 1.  Legal Proceedings: None

Item 2.  Changes in Securities:

         (a) Modifications in Instruments Defining the Rights of Stockholders.
As a consequence of the closing of the Company's initial public offering on
November 3, 1997, all outstanding shares of Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock were converted into an aggregate of
3,056,062 shares of Common Stock. The holders of such series' of preferred stock
held preferences in the payment of dividends and distributions on liquidation,
were entitled to vote with the holders of Common Stock on all matters presented
to stockholders for approval, and had preemptive rights under certain
conditions. On November 7, 1997, the Company filed an amendment to the Company's
Certificate of Incorporation that removed the designation of such series' of
preferred stock. Consequently, the Company has no outstanding shares of
preferred stock. The Company is authorized to issue 12,000,000 shares of
preferred stock which may be issued in one or more series, with such voting
powers, designations, preferences, rights, qualifications, limitations and
restrictions as shall be set forth in a resolution of the Company's Board of
Directors providing for the issue thereof. There are no authorized series of
preferred stock for which there are rights, privileges or preferences
designated.

         (b) Limitations or Qualifications of Other Securities. None.

         (c) Sales of Unregistered Securities. On August 7, 1997, the Company
completed the 1997 Private Placement, in which 1,437,504 shares of Series C
Preferred Stock were issued. The 1997 Private Placement was conducted in
accordance with Regulation D. The total proceeds from such offering were
$5,750,000. There were 181 purchasers in such offering, all of whom were
"accredited investors," as such term is defined in Regulation D. The Company
paid $690,000 in cash to its placement agent in the offering for agent's fees
and expense reimbursement in connection with the 1997 Private Placement and
issued to such placement agent warrants to purchase 215,625 shares of Common
Stock at $4.00 per share.

             During the first quarter of fiscal 1998, the Company granted stock
options under the ZymeTx, Inc. Stock Option Plan to five persons to purchase an
aggregate of 32,000 shares of Common Stock at an exercise price of $6.00 per
share. Such options were granted, and the exercise of such options will be made,
pursuant to Rule 701 promulgated under the Securities Act.

          (d) Use of Proceeds. On November 3, 1997, the Company closed an
initial public offering (the "Initial Public Offering") of 2,645,000 shares (the
"Shares") of Common Stock (inclusive of the sale of Shares pursuant to the
exercise of an underwriter overallotment option to purchase 345,000 Shares). The
Shares were offered for sale at a price of $8.00 per share pursuant to a
Registration Statement on Form SB-2 (No. 333-33563) (the "Registration
Statement") which was declared effective October 29, 1997. Capital West
Securities, Inc., Millennium Financial Group, Inc. and ComVest Partners, Inc.
(the "Underwriters") acted as the managing underwriters of the Offering.



                                       17

<PAGE>   19

                  An aggregate of 3,105,000 shares of Common Stock (including
345,000 shares of Common Stock subject to the Underwriters' overallotment option
and 230,000 shares of Common Stock issuable upon exercise of the Underwriters'
Warrants, as such term is hereafter defined), and 230,000 common stock purchase
warrants (the "Underwriters' Warrants") issued to the Underwriters at a price of
$.001 per warrant, were registered pursuant to the Registration Statement. The
aggregate offering price of the Shares, the Underwriters' Warrants, the Common
Stock issuable upon exercise of the Underwriters' Warrants and the Common Stock
subject to the Underwriters' over-allotment option was $21,160,230.

                  The proceeds of the Offering were subject to the following
actual expenses:

<TABLE>
<CAPTION>
                                             Direct or indirect payments to
                                             directors, officers, general
                                             partners of the Registrant or their
                                             associates; to persons owning ten
                                             percent or Direct or more of any                          Direct or
                                             class of equity securities of the                         indirect
                                             indirect issuer; and to affiliates                       payments to
                                             of the Registrant payments to                              others
                                             -----------------------------------                      ----------
<S>                                                                   <C>                             <C>       
Underwriting discounts and commissions                                $-                              $1,692,800
Finders' Fees                                                          -                                       -

Expenses paid to or for underwriters
                                                                       -                                 634,800

Other Expenses                                                         -                                 477,400
                                                                      --                              ----------
Total Expenses                                                        $-                              $2,805,000
                                                                      ==                              ==========
</TABLE>


                  The net proceeds of the Offering after deducting the expenses
described above were approximately $18,355,000. Since the closing of the
Offering, such proceeds were used by the Registrant for each of the purposes
indicated below:

<TABLE>
<CAPTION>
                                             Direct or indirect payments to
                                             directors, officers, general
                                             partners of the Registrant or their
                                             associates; to persons owning ten
                                             percent or Direct or more of any                        Direct or
                                             class of equity securities of the                       indirect
                                             indirect issuer; and to affiliates                     payments to
                                             of the Registrant payments to                            others
                                             -----------------------------------                    ----------

<S>                                                                  <C>                            <C>        
Temporary investments                                                $-                             $18,355,230
</TABLE>

Item 3. Defaults Upon Senior Securities: None.

Item 4. Submission of Matters to a Vote of Security Holders: None

         (a) On July 17, 1997, the Company held its Annual Meeting of
Stockholders (the "Annual Meeting").



                                       18

<PAGE>   20
         (b) At the Annual Meeting, the following directors were elected:

             William I. Bergman
             William A. Hagstrom
             J. Vernon Knight, M.D.
             Peter G. Livingston
             David E. Rainbolt
             Gilbert M. Schiff, M.D.

         (c) The number of votes cast for, against or withheld as to each of the
matters voted upon at the Annual Meeting, and a brief description of each such
matter, were as follows:

                  (i)      A proposal to adopt an Amended and Restated
                           certificate of Incorporation, pursuant to which the
                           Certificate of Incorporation would be amended to
                           provide as follows:

                           A)       to increase the number of authorized shares
                                    of capital stock from 26,500,000 to
                                    42,000,000 and to designate 30,000,000 of
                                    such shares as Common Stock, and 12,000,000
                                    of such shares as Preferred Stock, and to
                                    effect a reverse stock split where each one
                                    outstanding share of Common Stock
                                    ("Pre-Split Common Stock") is reclassified
                                    and converted into .25 shares of Common
                                    Stock ("Post-Split Common Stock");

                           B)       to divide the Board of Directors into three
                                    classes;

                           C)       to prohibit action by written consent unless
                                    the taking of such action has been approved 
                                    in advance by the Board of Directors; and

                           D)       to require the vote of 66-2/3% of the
                                    stockholders to amend or repeal the Bylaws
                                    other than an amendment or repeal by the
                                    Board of Directors.

                                    For                       7,222,714
                                    Against                       2,634
                                    Abstain                           0

                  (ii)     A proposal to adopt Amended and Restated Bylaws of
                           the Company, pursuant to which the Company's Bylaws
                           would be amended to provide as follows:

                           A)       To require, unless otherwise proscribed by
                                    law, special meetings of stockholders can
                                    only be held pursuant to a resolution of the
                                    Board of Directors or upon the request of
                                    stockholders holding a majority of the
                                    issued and outstanding shares of Common
                                    Stock.



                                       19
<PAGE>   21
                           B)       To require an advance notice procedure for
                                    the nomination, other than by or at the
                                    direction of the Board of Directors or a
                                    committee thereof, of candidates for
                                    election as directors as well as for other
                                    stockholder proposals to be considered at
                                    stockholders' meetings.

                                    For                       7,066,464
                                    Against                     158,884
                                    Abstain                           0

                  (iii)    Election of Directors. The following nominees for
                           election as a director received the number of votes
                           set forth opposite their respective names:

                           Name                         For         Withheld
                           -------------------------------------------------

                           William I. Bergman           7,225,348          0
                           William A. Hagstrom          7,225,348          0
                           J. Vernon Knight, M.D        7,225,348          0
                           Peter G. Livingston          7,225,348          0
                           David E. Rainbolt            7,225,348          0
                           Gilbert M. Schiff, M.D       7,225,348          0

                  (iv)     Appointment of Auditors. The following votes were
                           cast in connection with the approval of the
                           appointment of Ernst & Young, LLP, as the independent
                           auditors of the Company:

                                    For                       7,225,348
                                    Against                           0
                                    Abstain                           0

                  (v)      Increase in Common Stock subject to Stock Option
                           Plans. The following votes were cast in connection
                           with the approval of an increase in the number of
                           shares of Common Stock subject to the ZymeTx, Inc.
                           Stock Option Plan and the ZymeTx, Inc. Directors
                           Stock Option Plan from an aggregate of 450,000 shares
                           to 618,750 shares (giving effect to the reverse stock
                           split):

                                    For                       7,144,098
                                    Against                      81,250
                                    Abstain                           0

          d)   Settlements in Connection With Proxy Solicitation Terminations.
               None.


Item 5. Other Information:

         William G. Thurman, M.D. was elected to the board at the August 1997
board meeting. He serves as President Emeritus of Oklahoma Medical Research
Foundation (OMRF) with



                                       20

<PAGE>   22
responsibilities in the area of technology transfer activities. He joined OMRF
in 1979 as President and Scientific Director and retired in September 1997. From
1975 to 1979 he also served as Provost of the University of Oklahoma Health
Sciences Center.


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

         a.       Exhibits:

                  11.1     Computation of Earnings (Loss) Per Share.

                  27.1     Financial Data Schedule. (Exhibit 27 is submitted as
                           an exhibit only in the electronic format of this
                           Quarterly Report on Form 10-QSB submitted to the
                           Securities and Exchange Commission).

         b.       Reports on Form 8-K:  None



                                       21
<PAGE>   23
                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                      ZYMETX, INC.
                                      ------------------------
                                      (Registrant)


                                      /s/ G. Carl Gibson
                                      ------------------------
                                      G. Carl Gibson
                                      Principal Financial and 
                                        Accounting Officer


Date:  December 12, 1997



                                       22
<PAGE>   24
                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
        Exhibit
          No.                  Description
        -------                -----------
         <S>      <C>
         11.1     Computation of Earnings (Loss) Per Share.

         27.1     Financial Data Schedule. (Exhibit 27 is submitted as
                  an exhibit only in the electronic format of this
                  Quarterly Report on Form 10-QSB submitted to the
                  Securities and Exchange Commission).
</TABLE>