U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

X    Quarterly  report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934 for the quarterly period ended September 30, 1998.

__   Transition  report  under  Section 13 or 15(d) of the  Exchange Act for the
     transition period from __ to  __

Commission file number: 0-17419


                                 MENTORTECH INC.
                                 ---------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


                Delaware                               13-3260705
                --------                               ----------
        (State of Incorporation)           (I.R.S. Employer Identification No.)




                  462 Seventh Avenue, New York, New York 10018
                  --------------------------------------------
                    (Address of Principal Executive Offices)

                                 (212) 736-5870
                                 --------------
                (Issuer's Telephone Number, Including Area Code)


                 ______________________________________________
                 (Former Name, Former Address and Former Fiscal
                       Year, if Changed Since Last Report)


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


                      APPLICABLE ONLY TO CORPORATE ISSUERS


As of November 13, 1998,  the Issuer had 3,578,208  shares of Common Stock,  par
value $.01, outstanding.

       Transitional Small Business Disclosure Format (check one): Yes No X



<PAGE>



                                 MENTORTECH INC.

                                   Form 10-QSB

                                      INDEX

                                                                         Page
                                                                         ----

Part I - Financial Information

Item 1. Financial Statements

    Consolidated Balance Sheets at September 30, 1998 and
      December 31, 1997                                                   3

    Consolidated Statements of Operations for the three and
      nine months ended September 30, 1998 and 1997                       5

    Consolidated Statement of Cash Flows for the nine months
      ended September 30, 1998 and 1997                                   6

    Notes to Consolidated Financial Statements                            8

    Management's Discussion and Analysis of Financial
      Condition and Results of Operations                                 9

Part II - Other Information

Item 4.  Submission of Matters to a Vote of Shareholders                 14

Item 6.  Exhibits and Reports on Form 8-K                                14

Signatures                                                               16

 

                                      2

<PAGE>



                        MENTORTECH INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)


<TABLE>
<CAPTION>
                                          September 30, 1998          December 31, 1997
                                          ------------------          -----------------
                                             (unaudited)            
<S>                                            <C>                           <C>     
ASSETS                                                              
                                                                    
Current Assets:                                                     
                                                                    
Cash and cash equivalents                        $   85                       $1,659
                                                                    
Accounts receivable                               4,424                        3,503
                                                                    
Prepaid expenses                                  1,177                          351
                                                                    
Inventory                                            80                           34
                                                 ------                       ------
                                                                    
         Total current assets                     5,766                        5,547
                                                 ------                       ------
                                                                    
                                                                    
                                                                    
Property and Equipment:                                             
                                                                    
Property and equipment                            4,506                        3,900
                                                                    
Accumulated depreciation                                            
  and amortization                               (2,024)                      (1,536)
                                                -------                      -------
                                                                    
         Total property and equipment             2,482                        2,364
                                                -------                      -------
                                                                    
                                                                    
                                                                    
Other Assets:                                                       
                                                                    
Other assets, net                                   416                          585
                                                                    
Goodwill (net of accumulated amortization                           
       of $780 in 1998 and $446  in 1997)         4,668                        5,001
                                                  -----                        -----
         TOTAL ASSETS                           $13,332                      $13,497
                                                 ======                       ======
                                                                    


</TABLE>









          See accompanying notes to consolidated financial statements.
                                                             
 

                                      3

<PAGE>





                        MENTORTECH INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (Continued)
                                 (in thousands)


<TABLE>
<CAPTION>

                                                    September 30, 1998      December 31, 1997
                                                    ------------------      -----------------
                                                       (unaudited)
<S>                                                      <C>                 <C> 
LIABILITIES AND STOCKHOLDERS' EQUITY 

Current Liabilities:

Accounts payable and accrued expenses                      $2,911            $ 2,831

Deferred revenue                                            2,128              2,155

Loans payable - others - current portion                      978                601

Loans payable - affiliate - current portion                   149                102

Capital equipment obligations                                  --                  5
                                                           ------             ------

            Total current liabilities                       6,166              5,694



Other Liabilities:
Accrued Severance Pay                                         518                556

Accounts payable - long term                                  277                271

Other liabilities                                             134                136
                                                            -----               ----
                                                            7,095              6,657
                                                            -----              -----
            Total liabilities                                                  



Stockholders' Equity:

Common stock                                                   34                 34

Additional paid in capital - common stock                   8,638              8,722

Accumulated deficit                                        (2,029)            (1,771)

Cumulative foreign currency translation adjustment           (406)              (145)
                                                           ------             ------

            Total Stockholders' Equity                      6,237              6,840
                                                            -----              -----

            TOTAL LIABILITIES AND
               STOCKHOLDERS' EQUITY                       $13,332            $13,497
                                                          =======            =======


</TABLE>








          See accompanying notes to consolidated financial statements.



                                       4



<PAGE>



                        MENTORTECH INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except for per share data)


<TABLE>
<CAPTION>
                                                  Three Months Ended                 Nine Months Ended
                                                     September 30                      September 30,
                                                     ------------                      -------------
                                                 1998              1997             1998             1997
                                                 ----              ----             ----             ----
                                                                      (unaudited)

<S>                                             <C>              <C>              <C>              <C>    
Revenues                                        $4,650           $4,396           $14,782          $13,083

Cost of revenues                                 2,984            2,730             9,327            8,105
                                                ------           ------           -------           ------

Gross profit                                     1,666            1,666             5,455            4,978



Selling and marketing                              770              750             2,486            1,955

General and administrative                         975              981             3,055            2,770

Research and development                            --              110                --              340
                                                ------            -----            ------           ------

Operating (loss)                                   (79)            (175)              (86)             (87)

Gain on sale of subsidiary                          --               17                --               44

Financial (expense), net                           (49)             (39)             (172)            (136)
                                                  ----             ----             -----             ----



Net  (loss)                                      $(128)         $  (197)           $ (258)         $  (179)
                                                 =====          =======            ======          =======

Net (loss) per share

  Basic and Diluted                              $(.04)           $(.08)            $(.07)           $(.09)
                                                 =====           ======             =====            =====
                                           


Number of shares used in computing
net  (loss) per share

  Basic and Diluted                              3,446            2,395             3,446            2,048
                                                 =====            =====             =====            =====


</TABLE>





                                       

          See accompanying notes to consolidated financial statements.

 

                                      5


<PAGE>



                        MENTORTECH INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)



<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                                       -------------
                                                                                1998                   1997
                                                                                ----                   ----
                                                                                       (unaudited)
<S>                                                                           <C>                     <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                                                     
 Net (loss) for the period                                                     $(258)                 $(179) 


 Adjustments to reconcile net income (loss) to net
     cash (used in) provided by operating activities
                                                                                 821                    674
   Depreciation and amortization
                                                                                 (38)                    94
   Increase (decrease) in accrued severance pay, net
                                                                                (922)                  (121)
   Increase in trade receivables
                                                                                (826)                  (105)
   Decrease (increase) in prepaid expenses
                                                                                   0                     56
   Decrease in other receivables
                                                                                 169                      0
   Decrease in other assets
                                                                                 (46)                    55
   Decrease in inventories
                                                                                                       (410)
   Increase (decrease) in related parties
                                                                                 (27)                   110
   Decrease in deferred revenue
                                                                                   0                    (73)
   Increase in deferred income taxes
                                                                                   1                      5
   Capital gain
                                                                                  84                   (198)
   Decrease in accounts payable and accrued expenses


         Net cash (used in) operating activities                              (1,042)                  (612)


CASH FLOWS FROM INVESTING ACTIVITIES:
                                                                                (729)                  (908)
   Purchase of property and equipment
                                                                                 123                     71
   Proceeds from sales of property and equipment
                                                                                                        (45)
   Purchase of subsidiary
                                                                                                      1,217
   Cash acquired in acquisition

         Net cash (used in) provided by investing                               (606)                   335
            activities



</TABLE>



          See accompanying notes to consolidated financial statements.
 

                                      6



<PAGE>







                        MENTORTECH INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (in thousands)


<TABLE>
<CAPTION>
                                                                                               Nine Months Ended
                                                                                                 September 30,
                                                                                                 -------------
                                                                                            1998             1997
                                                                                            ----             ----
                                                                                                (unaudited)
<S>                                                                                       <C>               <C>    
CASH FLOWS FROM FINANCING ACTIVITIES:

 Capital equipment obligation repayments                                                  $   (5)           $ (37)
                                                                                                             (480)
 Decrease in loans payable                                                                    47
                                                                                                              (69)
 Additional costs of issuance of common stock                                                (84)
                                                                                             377              629
                                                                                             
 Increase in short-term bank credit
                                                                                             335               43
         Net cash provided by (used in) financing activities


                                                                                          (1,313)            (234)
 Net (decrease) in cash and cash equivalents

 Effect of exchange rate changes on cash                                                    (261)             (20)
   and cash equivalents


                                                                                           1,659              288
 Cash and cash equivalents at the beginning of the period


                                                                                             $85              $34
 Cash and cash equivalents at the end of the period



 Supplemental disclosure of cash flow information:

 Cash paid during the period for
                                                                                               3               38
         Income taxes

         Interest                                                                            192               88

Supplemental disclosure of non-cash and financing activities:

Two shareholder loans in the amount of $2,578
  and $438 were converted to equity in 1997
Effective March 3, 1998 an 8:1 reverse stock split
  was effectuated


</TABLE>



          See accompanying notes to consolidated financial statements.


                                       7


<PAGE>



                        MENTORTECH INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.   Interim Financial Statements

     The accompanying financial information is unaudited,  but in the opinion of
management,  reflects  all  adjustments  (which  include  only normal  recurring
adjustments)  necessary  to present  fairly the  Company's  financial  position,
operating  results  and  cash  flows  for  those  periods   presented.   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 rules and regulation of the Securities and
Exchange  Commission.  See  Management's  Discussion  and Analysis and Financial
Reporting.  The financial  information  should be read in  conjunction  with the
audited  financial  statements and notes thereto for the year ended December 31,
1997.  Results for the interim period are not necessarily  indicative of results
for the entire year.


Note 2.  Accounting Policy

For purposes of the Statements of Cash Flows,  the Company  considers all highly
liquid  instruments  with maturity of one year or less when purchased to be cash
equivalents

Note 3.  Subsequent Events

On October  28,  1998  Mashov  Computer  Marketing  Ltd.  exercised  warrants to
purchase  132,045  shares of the Company's  common stock.  The Company  received
gross proceeds of $580,998.



                                       8


<PAGE>

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

     This Report contains  forward-looking  statements within the meaning of the
Private Securities  Litigation Reform Act of 1995 which are subject to risks and
uncertainties.  Actual results could differ materially from the  forward-looking
statements  in this  report.  Factors  that could  cause or  contribute  to such
differences  include,  but are not limited to, those discussed elsewhere in this
Report. The following discussion and analysis should be read in conjunction with
the Company's financial  statements and notes thereto included elsewhere in this
report.

Overview

     Effective February 13, 1997, the Company's predecessor,  PC Etcetera,  Inc.
("PCE  U.S.")  underwent  a change of  control  pursuant  to the Stock  Purchase
Agreement between PCE U.S. and Mashov Computers  Marketing Ltd.  ("MCM"),  whose
shares are publicly traded on the Tel-Aviv Stock Exchange (the "TASE"). MCM is a
majority-owned  subsidiary  of Mashov  Computers  Ltd.,  whose  shares  are also
publicly traded on the TASE. Based on the Stock Purchase Agreement, MCM acquired
1,054,865  shares of Common Stock and 658,412 shares of Series C Preferred Stock
of PCE U.S.  (collectively,  the  "Sale  Stock"),  with  each  share of Series C
Preferred Stock  convertible  into 1.25 shares of Common Stock. In consideration
for the Sale  Stock,  PCE U.S.  acquired  two of MCM's  subsidiaries,  Sivan and
Mashov CBT.  Pursuant to the Stock Purchase  Agreement,  MCM acquired 69% of PCE
U.S.'s  equity and voting  securities on a fully  diluted  basis,  subject to an
adjustment  based upon the fiscal year 1996 audited  balance sheets of PCE U.S.,
Sivan  and  Mashov  CBT.  Such  adjustment  was made on  August 4, 1997 when MCM
contributed  43,199  shares of Common  Stock to the capital of the  Company.  In
addition, on August 4, 1997, the 658,412 shares of Series C Preferred Stock were
converted by MCM into 823,015 shares of Common Stock.

     In  October  1997,  the  Company  acquired  the  assets  of  GLTN  Computer
Consultants,   Inc.,  a  Long  Island,   New  York,  ILT  training   company  in
consideration  of $130,000 and the issuance of 15,909 shares of Common Stock. On
March 3, 1998, an 8 for 1 reverse stock split of the Company's  Common Stock was
effectuated.

     In addition,  the name of the  Company's  wholly-owned  subsidiary,  Mashov
C.B.T., Ltd., was changed to Mentortech Systems,  Ltd.  ("Mentortech  Systems").
All  reporting  and results for  Mentortech  Systems  have been  included in the
financial statements of the Company's Israeli operations.

Financial Reporting

     The  unaudited  financial  statements  for the three and nine months  ended
September 30, 1997 included in this report  reflect the  operations of Sivan and
Mentortech  Systems  for  such  periods  and  the  operations  of PCE  U.S.  and
Mentortech  TBT (formerly PC Etcetera  Israel) since February 13, 1997, the date
of the stock  purchase  transaction.  All per share  data have been  revised  to
reflect an 8 for 1 reverse stock split that was effectuated on March 3, 1998.

Three and nine  months  ended  September  30, 1998 as compared to three and nine
months ended September 30, 1997.

     Revenues.  The Company's revenues are derived from instructor-led  training
("ILT") services,  contractual  consulting and staff augmentation  services, and
technology-based  training ("TBT") product sales. The Company's ILT revenues are
recognized  over the life of the training  course.  Franchise  fees from centers
operating  with the Sivan trade name in Israel and  utilizing  Sivan's  training
materials  are  included  in  ILT  revenues.   Contract   consulting  and  staff
augmentation revenues are recognized as the services are performed. TBT revenues
are recognized upon shipment of the software provided that no significant vendor
obligations  remain and  collection of the related  receivable is probable.  The
Company's  refund policy provides that  dissatisfied  trainees may either attend
the same course  without  charge or the  trainee's  employer  may request a full
refund. An allowance for refunds has not been established,  because historically
minimal  refunds  have been  issued.  Retakes of a course are provided on a seat
available  basis.  Accordingly,  the Company believes that it does not incur any
financial exposure with respect to such retakes.

     The  Company's  revenues  for the three  months  ended  September  30, 1998
increased 6% to $4.7 million from $4.40 million in the  comparable  1997 period.
Revenues  for the nine months ended  September  30, 1998 also rose 13% to $14.78
million  from $13.08  million  for the nine months  ended  September  30,  1997.
Sivan's ILT revenues increased by $0.27 and $1.08 million respectively,  for the
three and nine  months  ended  September  30,  1998 to $3.17  million  and $9.70
million  compared  to $2.90  million and $8.62  million for the same  periods in
1997. The increase in Sivan's  


                                       9


<PAGE>


revenues in 1998 was due  primarily  to its success in  offering  more  high-end
technical  courses as well as an  increase in the number of  vocational  courses
offered.  TBT revenues for the three and nine months  ended  September  30, 1998
were $0.26 and  $.062,  respectively,  compared  to $0.02 and $.011 for the same
periods in 1997.

     The revenues of the Company's  U.S.  operation were $1.23 million and $4.46
million for the three and nine months ended  September 30, 1998. This represents
a decrease of $0.22 million or 15% for the three months ended September 30, 1998
as  compared  to the same period in 1997.  Revenues  for the nine  months  ended
September 30, 1998,  which totaled $4.46  million,  represents a 7% decline from
the same period in 1997.  Consulting revenues for the New York metropolitan area
totaled  $0.67  million and $2.69  million  for the three and nine months  ended
September 30, 1998, a decline of 24% and 36%, respectively, compared to revenues
of $1.1 million and $3.6  million for the three and nine months ended  September
30, 1997.  Management  has made a  substantial  effort to reverse the  declining
trend in  revenue.  During the third  quarter of 1998 the  Company  recruited  a
President of the Consulting Services Division.  The new CSD President joined the
Company  with a team  of  four  additional  employees.  Management  expects  CSD
revenues to increase substantially in the fourth quarter.

     The Company  experienced growth in the ILT business in the United States in
1998.  Revenues for the three and nine months ended  September  30, 1998 rose to
$0.56 and $1.77 million,  respectively,  which represents  increases of 42% when
compared  to revenues  of $0.40 and $1.2  million for the same  periods in 1997.
Management  attributes  the  increase  in ILT  revenues  to the  adoption of new
operating  systems  by its  clients  which  resulted  in  increased  demand  for
training. The Company's U.S. operation had anticipated that the release of a new
application  software  entitled  Office 97 would have a  positive  impact on ILT
revenues in previous  periods.  Management  believes  that this  transition  has
begun.

     The  Company's  U.S.  operation is also pursuing a move into the higher end
training  market  as  many  organizations  require  certification  training  for
Microsoft and Lotus back office  applications and operating systems.  Management
believes  that this higher  technical  training  environment  will have a better
synergy with the U.S. operation's  consulting  business.  The U.S. operation has
been authorized as a Lotus Authorized  Education Center, and its status has been
upgraded to Premium  Business  partner  and has  received  Microsoft  Authorized
Technical Education Center status.

     The cost of ILT revenues consists primarily of the expenses of instructors,
classroom space costs as well as depreciation  of classroom  equipment.  Cost of
revenues for consulting  services  consists  primarily of the labor costs of the
consultants performing the work at clients' facilities. Cost of revenues for TBT
revenues include  packaging and  manufacturing  costs of the products as well as
design  expenses for custom TBT  projects.  Cost of revenues for the Company was
64% and 63% of revenues for the three and nine months ended  September 30, 1998,
respectively,  compared to 62% of revenues  for the three and nine months  ended
September  30, 1997.  Cost of revenues for Sivan was 60% and 58%,  respectively,
for the three and nine months ended  September  30, 1998 compared to 54% and 58%
of revenues for the three and nine months  ended  September  30,  1997.  Cost of
revenues for the U.S. operation was 62% and 68%, respectively, for the three and
nine  months  ended  September  30,  1998,  compared to 76% and 72% for the same
periods of 1997.  The Company  has  decreased  its cost of revenues  relative to
increased  sales.  During the third quarter of 1998, the Company further reduced
its fixed  costs  through  lease  negotiations  with its  landlords.  Management
expects a  significant  reduction in the cost of goods sold as a  percentage  of
sales for the remainder of 1998.

     Sales  and  marketing  expenses  consist  primarily  of costs  relating  to
promotion,  advertising, trade shows and exhibitions. Such expenses also include
compensation of salespeople,  support staff, travel and related expenses.  Sales
and marketing  expenses  increased  slightly by $20,000 or 3% and by $531,000 or
27% to  $0.77million  and $2.49  million,  respectively,  for the three and nine
months ended  September  30, 1998 from $0.75  million and $1.96  million for the
three and nine months ended September 30, 1997. Sales and marketing  expenses in
Israel  totaled  $0.60 and $1.494  million for the three and nine  months  ended
September  30, 1998 as compared to $0.53 and $1.44 for the three and nine months
ended September 30, 1997. Sales and marketing expenses in the U.S. totaled $0.21
and $1.01  million for the three and nine months ended  September  30, 1998,  up
from $0.26 and $0.66  million  for the  comparable  periods of 1997.  Management
believes  the  increased  revenues  are a  result  of the  increased  sales  and
marketing expenses.


     General  and  administrative   expenses  include   compensation  costs  for
administration,  finance and general management personnel and office maintenance
and  administrative  costs.  General  and  administrative  costs for the Company
showed a slight  decrease to $0.98 million for the three months ended  September
30, 1998 from $0.98 for the three months ended  September 30, 1997.  General and
administrative expenses increased to $3.055 million for the nine months


                                       10


<PAGE>



 

ended  September 30, 1998 compared to $2.77  million,  for the nine months ended
September 30, 1997. General and  administrative  expenses were $0.92 million for
the U.S.  operations during the first three quarters of 1998, a reduction of 16%
compared to the  comparable  period in 1997 and $2.06  million for Sivan for the
nine months  ended  September  30,  1998 an increase  decrease of 22% from 1997.
Management  is  continuing  its  efforts to reduce  general  and  administrative
expenses. In the United States, all duplicate  administrative  functions arising
from the acquisition of GLTN have been eliminated.

     Research and  development  expenses had consisted  primarily of salaries of
the  employees  engaged in ongoing  research and  development  activities of TBT
materials and other related costs. Research and development expenses amounted to
$0.11 and $0.34 respectively,  for the three and nine months ended September 30,
1997. Thereafter, the Company now believes that all of this work is now directed
to client  projects  and thus is included  in cost of sales.  Due to a change in
Accounting  Principles  in Israel,  the  Company no longer  charges  expenses to
research and development  without a permit from the Israeli  Government's  Chief
Scientist. Management has decided not to apply for such permit.

     As a result of the foregoing,  the Company had operating  losses of $79,000
and $86,000 respectively, for the three and nine months ended September 30, 1998
compared to  operating  losses of $175,000 and  $87,000,  respectively,  for the
comparable  periods of 1997.  Management has devoted  substantial  efforts to an
aggressive cost containment plan.  Management believes once the cost containment
plan is fully  implemented,  the  Company's  increased  investment  in sales and
marketing will permit the Company to return to profitability.

     Interest  expenses,  net,  consists  primarily of bank charges and interest
expenses offset by interest income.  Interest expenses were $49,000 and $172,000
for the three and nine month  periods  ended  September  30, 1998 as compared to
$39,000 and $136,000 in the comparable periods in 1997.

     Sivan's  operations  had net income of $0.43  million in 1998 compared to a
net loss of $0.05 million in 1997. The Company's U.S.  operation incurred a loss
of $0.48 million during the nine months ended  September 30, 1998 and Mentortech
TBT incurred a loss of $0.21. As a result of the foregoing,  the Company had net
loss of $128,000 and of $258,000  for the three and nine months ended  September
30, 1998 as compared to net loss of $197,000 and $179,000 for the three and nine
month periods ended September 30, 1997.

Liquidity and Capital Resources

     At  September  30,  1998,  the  Company  had cash and cash  equivalents  of
approximately  $85,000 and a working capital  deficiency of $400,000 compared to
cash and cash equivalents of  approximately  $1.66 million and a working capital
deficiency of approximately $78,000 at December 31, 1997.

     The Company  completed a private  placement of securities in December 1997,
wherein  it issued  and sold  511,364  shares of Common  Stock and  warrants  to
purchase  255,682 shares of Common Stock.  The Company  obtained net proceeds of
approximately  $2 million from the private  placement.  The Company's  financial
position was further improved by Mashov's  conversion of $1,162,000 of debt into
264,090 shares of Common Stock and warrants to purchase 132,045 shares of Common
Stock offset by the losses incurred.


     On October 28, 1998 Mashov Computers  Marketing Ltd.  exercised warrants to
purchase  132,045  shares of the Company's  common stock.  The Company  received
$580,998 as a result of this transaction which will be reflected in Q4 financial
statements.

     In 1997, the Company  obtained an oral  commitment from its Israeli bank to
provide Sivan up to $1.1 million in working  capital loans.  As of September 30,
1998, Sivan had borrowed approximately $954,000 from such bank.

     The Company's  operating  activities used  approximately  $1.04 million net
cash in the nine months ended September 30, 1998. Accounts receivable  increased
by approximately  $0.92 million and prepaid expenses increased by $0.826 million
during the same  period.  This  increase was due  primarily  to higher  accounts
receivable  due to the increase in sales  volume.  Accounts  payable and accrued
expenses  decreased by $0.08 million  during the same period.  Prepaid  expenses
increased by $0.83 million in part due to some systems and  Consulting  Services
Division  investments  in the US and advance  payments in Israel.  The Company's
investing  activities used approximately  $606,000 primarily for the purchase of
fixed assets.


                                       11

<PAGE>

     Based on the working  capital loan  commitment and the exercise of warrants
and  subsequent  cash  received,  the Company  believes  that it has  sufficient
working   capital  to  fund  its  current  level  of  operational   and  capital
requirements  through  1999.  The  Company  does not have any  material  capital
commitments  for 1999.  To the extent  the  Company  increases  the scope of its
activities significantly, it may be required to obtain additional financing.

Seasonality

     While  the  Company's  revenues  have not been  substantially  affected  by
seasonal  variations,  the revenues of the Company's Israeli subsidiary,  Sivan,
are affected by the timing of the national holidays, when classes are suspended.








                                       12


<PAGE>



The Year 2000 Issue

     Some of the Company's older computer programs were written using two digits
rather than four to define the  applicable  year.  As a result,  those  computer
programs have  time-sensitive  software that  recognize a date using "00" as the
year 1900  rather  than the year  2000.  This  could  cause a system  failure or
miscalculations  causing  disruptions  of  operations,  including,  among  other
things, a temporary inability to process transactions,  send invoices, or engage
in similar normal business activities.

The Company has completed an  assessment  and is in the process of modifying and
replacing  portions of its software so that its computer  systems will  function
properly with respect to dates in the year 2000 and  thereafter.  The total Year
2000  project  cost is  estimated  at  approximately  $75,000.  The  Company has
incurred costs of approximately $45,000 to date.








                                       13


<PAGE>




PART II-OTHER INFORMATION


Item 4. Submission of Matters to a Vote of Shareholders

               None.

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

     Exhibits.



3.1  Certificate of Incorporation, as amended (1)

3.2  Certificate of Amendment of Certificate of Incorporation with regard to the
     change of the Company's  name and the increase in the Company's  authorized
     capital stock (2)

3.3  Certificate of Amendment of Certificate of  Incorporation  with regard to a
     reverse stock split (3)

3.4  By-Laws (4)

10.1 Lease for premises situated at 462 Seventh Avenue, 4th Floor, New York, New
     York (5)

10.2 1997 Stock Option Plan (6)

10.3 Employment Agreement of Roy Machnes (7)

10.4 Employment Agreement of Elan Penn (7)

10.5 Employment Agreement of Terry I. Steinberg (7)

27   Financial Data Schedule

_______________
(1)  Filed as an exhibit  to the  Company's  Annual  Report on Form 10-K for the
     year ended December 31, 1989 and hereby  incorporated by reference thereto,
     as amended by document  filed as an exhibit to the Company's  Annual Report
     on Form 10-KSB for the year ended December 31, 1993.

(2)  Filed as an exhibit to the  Company's  Quarterly  Report on Form 10-QSB for
     the quarter ended  September 30, 1997 and hereby  incorporated by reference
     thereto.

(3)  Filed as an exhibit to the  Company's  Annual Report on Form 10-KSB for the
     year ended December 31, 1997 and hereby incorporated by reference thereto.

(4)  Filed as an exhibit to the  Company's  Form S-18  (File No.  33-19521)  and
     hereby incorporated by reference thereto.

(5)  Filed as an exhibit to the  Company's  Annual Report on Form 10-KSB for the
     fiscal year ended  December 31, 1993 and hereby  incorporated  by reference
     thereto.  

                                       14


<PAGE>





(6)  Filed as an exhibit to the  Company's  Quarterly  Report on Form 10-QSB for
     the  quarter  ended June 30,  1997 and  hereby  incorporated  by  reference
     thereto.

(7)  Filed as a  "Related  Agreement"  to the Stock  Purchase  Agreement,  which
     Related  Agreement was filed as an exhibit to the Company's  Current Report
     on Form 8-K for an event dated February 13, 1997 and hereby incorporated by
     reference thereto.



Reports on Form 8-K.

     No Current Reports on Form 8-K have been filed since September 30, 1998.







                                       15


<PAGE>



                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.

                                MENTORTECH, INC.



                                By:/s/Roy Machnes             
                                ------------------             
                                   Roy Machnes
                                   President and Chief Executive Officer



                                By:/s/Matthew L. Root
                                --------------------
                                   Matthew L. Root
                                   Chief Financial Officer



Date: November 13, 1998                                                        




 


                                       16


<PAGE>



                                  EXHIBIT INDEX


Exhibit         
   No.                       Description
   ---                       -----------


3.1  Certificate of Incorporation, as amended (1)

3.2  Certificate of Amendment of Certificate of Incorporation with regard to the
     change of the Company's  name and the increase in the Company's  authorized
     capital stock (2)

3.3  Certificate of Amendment of Certificate of  Incorporation  with regard to a
     reverse stock split (3)

3.4  By-Laws (4)

10.1 Lease for premises situated at 462 Seventh Avenue, 4th Floor, New York, New
     York (5)

10.2 1997 Stock Option Plan (6)

10.3 Employment Agreement of Roy Machnes (7)

10.4 Employment Agreement of Elan Penn (7)

10.5 Employment Agreement of Terry I. Steinberg (7)

27   Financial Data Schedule

_______________
(1)  Filed as an exhibit  to the  Company's  Annual  Report on Form 10-K for the
     year ended December 31, 1989 and hereby  incorporated by reference thereto,
     as amended by document  filed as an exhibit to the Company's  Annual Report
     on Form 10-KSB for the year ended December 31, 1993.

(2)  Filed as an exhibit to the  Company's  Quarterly  Report on Form 10-QSB for
     the quarter ended  September 30, 1997 and hereby  incorporated by reference
     thereto.

(3)  Filed as an exhibit to the  Company's  Annual Report on Form 10-KSB for the
     year ended December 31, 1997 and hereby incorporated by reference thereto.

(4)  Filed as an exhibit to the  Company's  Form S-18  (File No.  33-19521)  and
     hereby incorporated by reference thereto.

(5)  Filed as an exhibit to the  Company's  Annual Report on Form 10-KSB for the
     fiscal year ended  December 31, 1993 and hereby  incorporated  by reference
     thereto.  

(6)  Filed as an exhibit to the  Company's  Quarterly  Report on Form 10-QSB for
     the  quarter  ended June 30,  1997 and  hereby  incorporated  by  reference
     thereto.

(7)  Filed as a  "Related  Agreement"  to the Stock  Purchase  Agreement,  which
     Related  Agreement was filed as an exhibit to the Company's  Current Report
     on Form 8-K for an event dated February 13, 1997 and hereby incorporated by
     reference thereto.