================================================================================
                       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 March 31, 1997

                                       OR

[ ]             TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                            OF THE EXCHANGE ACT

            For the transition period from ___________ to ___________

                         Commission File Number 0-29192

                               T/F PURIFINER, INC.
        (Exact name of small business issuer as specified in its charter)

              DELAWARE                             14-1708544
     (State or other jurisdiction       (I.R.S.  Employer  Identification No.)
  of incorporation or organization)

    3020 High Ridge Road, Suite 100,
        Boynton Beach, Florida                        33426
(Address of principal executive offices)            (Zip Code)

                               (561) 547-9499
                        (Issuer's telephone number)

                                    N/A
              (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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                         DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the  distribution of
securities under a plan confirmed by the court.

                  Yes        [ ]                 No        [ ]

APPLICABLE   ONLY  TO  CORPORATE   ISSUERS:   State  the  number  of  shares
outstanding  of each of the  issuer's  classes of common  equity,  as of the
latest practicable date: April 17, 1997:  5,145,879.

================================================================================

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
                               T/F Purifiner, Inc.
                             Condensed Balance Sheet
                                 March 31, 1997
                                   (Unaudited)
Assets
Current assets:
  Cash and cash equivalents                                         $   704,182
  Trade accounts receivable, net                                        183,619
  Inventories                                                           553,136
  Prepaid expenses and other current assets                              54,047
  Note receivable from shareholder/officer                              204,703
                                                                    -----------
Total current assets                                                  1,699,687

Property and equipment, net                                             317,021
Patents and trademarks, net                                             142,656
Costs in excess of net assets acquired, net                             130,382
Other assets                                                             35,068
                                                                    -----------
                                                                    $ 2,324,814
                                                                    ===========
Liabilities and Stockholders' Equity
Current Liabilities:
  Accounts payable - trade                                          $   313,623
  Accrued expenses                                                       97,290
  Customer deposits and other                                           172,684
  Current portion of notes payable and capital lease obligations         39,847
  Shareholder loans                                                      99,699
                                                                    -----------
Total current liabilities                                               723,143

Shareholder loans                                                       303,297
Note payable and capital lease obligations                               61,810
Deferred rent                                                            11,140
Liability to equity investee                                             10,067
                                                                    -----------
Total liabilities                                                     1,109,457

Contingencies

Stockholders' Equity:
  Common Stock, $.001 par value                                           5,145
  Preferred Stock, $.001 par value                                         --
  Additional paid-in-capital                                          6,539,431
  Unearned compensation                                                (180,858)
  Loans receivable                                                      (85,131)
  Accumulated deficit                                                (5,063,230)
                                                                    -----------
                                                                      1,215,357
                                                                    -----------
                                                                    $ 2,324,814
                                                                    ===========
See accompanying notes to condensed financial statements.

                                        1

<PAGE>

                               T/F Purifiner, Inc.

                       Condensed Statements of Operations

               For the Three Months Ended March 31, 1996 and 1997
                                   (Unaudited)



                                                         1996            1997
                                                    -----------     -----------

Net sales                                           $   428,627     $   415,901
Cost of sales                                           268,338         272,329
                                                    -----------     -----------
Gross profit                                            160,289         143,572


Operating expenses:
  Selling                                               147,378         574,617

  General and administrative                            129,921         258,381
  Deferred profit                                        11,950          (3,488)
                                                    -----------     -----------
                                                        289,249         829,510
                                                    -----------     -----------

Operating loss                                         (128,960)       (685,938)
Other income (expense):
  Interest expense                                       (8,871)         (2,638)
  Interest income                                          --            16,246
                                                    -----------     -----------


Net loss                                            $  (137,831)    $  (672,330)
                                                    ===========     ===========

Loss per common share                               $      (.05)    $      (.13)
                                                    ===========     ===========

Weighted average common shares outstanding            2,793,000       5,133,005
                                                    ===========     ===========




See accompanying notes to condensed financial statements.






                                        2

<PAGE>

                                                     T/F Purifiner, Inc.

                                               Condensed Statements of Changes
                                                   in Stockholders' Equity
                                                         (Unaudited)
<TABLE>
<CAPTION>
                                                            
                               Common       Stock      Additional                                               Total   
                               ------------------        Paid-In-    Unearned       Loans       Accumulated  Stockholders'
                               Shares       Amount       Capital   Compensation   Receivable      Deficit       Equity
                               -------------------------------------------------------------------------------------------
<S>                             <C>         <C>        <C>           <C>          <C>          <C>            <C>       
Balance at January 1, 1997      5,097,080   $5,097     $6,323,505    $(123,114)   $      -     $(4,390,900)   $1,814,588

Cancellation of common stock       (8,676)      (9)       (22,491)           -           -               -       (22,500)

Exercise of stock options, net     56,375       57        114,568            -     (85,131)              -        29,494

Issuance of compensatory
  stock options and warrants            -        -        123,849     (123,849)          -               -             -

Amortization of unearned
  compensation                          -        -              -       66,105           -               -        66,105

Net loss                                -        -              -            -           -        (672,330)     (672,330)
                                ------------------------------------------------------------------------------------------

Balance at March 31, 1997       5,144,779   $5,145     $6,539,431    $(180,858)   $(85,131)    $(5,063,230)   $1,215,357
                                =========   ======     ==========    ==========   =========    ===========    ==========



See accompanying notes to condensed financial statements.

</TABLE>

















































                                                    3



<PAGE>

                               T/F Purifiner, Inc.
                       Condensed Statements of Cash Flows
                   Three Months ended March 31, 1996 and 1997
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                  1996           1997
                                                              -----------    -----------
<S>                                                           <C>            <C>         
Operating activities                                          $  (137,831)   $  (672,330)
Net loss
Adjustments to reconcile net loss to net cash
   used in operating activities:
    Amortization                                                    2,568         15,246
    Issuances of  compensatory options and warrants                  --           66,105
    Cancellation of common stock                                     --          (10,000)
    Depreciation and amortization of property and equipment         7,561         17,319
    Changes in operating assets and liabilities:
      Trade accounts receivable, net                                6,717        (56,813)
      Inventories                                                  (1,302)      (112,897)
      Prepaid expenses and other current assets                   (11,770)       (40,713)
      Other assets                                                 (5,368)        (2,141)
      Accounts payable - trade                                      2,033           (611)
      Accrued expenses                                            (66,319)        20,213
      Customer deposits and other                                   6,678        (82,941)
      Accrued interest and other payables - related parties         9,540           --
      Deferred rent                                                  (495)        (2,250)
                                                              -----------    -----------
Net cash used in operating activities                            (187,988)      (861,813)

Investing activities
Patents and trademarks                                             (1,106)        (2,828)
Purchases of property and equipment                               (16,758)      (113,023)
Increase in note receivable from shareholder/officer                 --         (200,000)
                                                              -----------    -----------
Net cash used in investing activities                             (17,864)      (315,851)

Financing activities
Increase in deferred issuance costs                               (26,031)        (6,709)
Proceeds from issuances of Common Stock and
  exercise of stock options, net                                  298,788      1,058,588
Proceeds from notes payable                                        20,000         20,200
Payment on notes payable and capital lease obligations             (3,982)        (6,879)
Payment on shareholder loans                                      (13,500)       (99,030)
Borrowing from investee                                              --             --
Repayment to investee                                             (12,738)       (13,284)
                                                              -----------    -----------
Net cash provided by financing activities                         262,537        952,886
                                                              -----------    -----------
Increase (decrease) in cash and cash equivalents                   56,685       (224,778)
Cash and cash equivalents at beginning of period                   31,732        928,960
                                                              -----------    -----------
Cash and cash equivalents at end of period                    $    88,417    $   704,182
                                                              ===========    ===========

During  1997,  the  Company  entered  into  capital  lease  obligations  in the amount of
approximately $49,000.

</TABLE>


See accompanying notes to condensed financial statements.

                                            4


<PAGE>


                                T/F Purifiner, Inc.

                      Notes to Condensed Financial Statements
                                    (Unaudited)

1.   BASIS OF PRESENTATION AND COMPANY

The unaudited  condensed  financial  statements as of March 31, 1997 and for the
three  month  period  ended March 31,  1996 and 1997 are  unaudited  and, in the
opinion of management,  include all adjustments  (consisting  only of normal and
recurring  adjustments)  necessary for a fair presentation of financial position
and results of operations  for these  interim  periods.  Such interim  financial
statements  have  been  prepared  on the  basis of  presentation  as more  fully
described in the Company's  annual  financial  statements  and should be read in
conjunction with the Company's audited  financial  statements which are included
in the  Company's  Form 10-KSB.  The results of  operations  for the three month
period ended March 31, 1997 is not  necessarily  indicative of the results to be
expected for the entire year.

The Company has incurred recurring losses from operations since inception, which
has resulted in continuing  cash flow  difficulties  and the continuing need for
additional financing.  These factors raise substantial doubt about the Company's
ability to continue as a going concern. In order to continue as a going concern,
the Company must obtain  additional  financing,  which it is  endeavoring  to do
through the issuance of additional securities.

However,  there is no  assurance  that the Company  can  complete  its  proposed
issuances or that it can obtain adequate additional financing from other sources
or  that  profitable  operations  can be  sustained.  The  inability  to  obtain
additional  financing when needed,  would have a material  adverse effect on the
Company, including requiring the Company to curtail or cease its operations. The
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  of recorded asset amounts that might be necessary as a result of
the above uncertainty.

At March 31, 1997, deferred issuance costs of approximately $7,000,  included in
other assets,  represent  costs  incurred by the Company in connection  with the
Company's planned  issuances of securities.  Such costs will be charged directly
against the net proceeds of the related offering if it is successfully completed
or will be expensed if the offering is abandoned.

2.   INVENTORIES

At March 31, 1997, inventories consist of the following:


            Raw materials                                 $ 366,858
            Finished goods                                  177,067
            Supplies                                          9,211
                                                          ---------
                                                          $ 553,136
                                                          =========


                                            5

<PAGE>

                                   T/F Purifiner, Inc.

                        Notes to Financial Statements (continued)
                                       (Unaudited)
3.   CONTINGENCIES

During  1995,  the  Company  commenced  a patent  infringement  case  against  a
competitor.  The competitor  subsequently asserted certain counterclaims against
the  Company  and  certain  of its  employees.  The  ultimate  outcome  of these
counterclaims  cannot  currently  be  determined  at this  time but the  Company
believes  it has  meritorious  defenses  and will  eventually  prevail  in these
actions.

In  April  1996,  the  Company  became a party  to an  action  filed by a former
independent  contractor  claiming certain  commissions and other damages due him
pursuant to an  agreement.  Pursuant to the  agreement,  as  adjudicated  by the
Court, the Company will resolve this case through  arbitration and, although the
ultimate  outcome of this matter cannot be determined at this time, the Company,
upon advice of counsel, believes it has meritorious defenses and will eventually
prevail in this matter. No action has been taken by the plaintiff on this matter
since mid-1996.

In January  1997, a patent  holder  filed an action  against the Company for non
payment of approximately  $21,000 of unpaid royalties claimed by him and seeking
a permanent  injunction  against the Company's  manufacturing and selling of the
covered Purifiner products.  The Company has filed an answer to this case and is
proceeding  to  discovery.  Although  the Company  believes  it has  meritorious
defenses  against the monetary  amounts alleged by the licensor patent owner, it
has agreed to pay the patent holder such alleged unpaid royalties,  which amount
relates  primarily to the timing of the royalty payment and legal fees regarding
defending certain patents pending of the licensor.  The Company,  upon advice of
counsel,  does not believe the license holder will be in a position to obtain an
injunction  against the  Company's  manufacturing  and selling of the  Purifiner
products.  The  Company  believes  that the  licensor  patent  holder  initiated
litigation in order to extract a favorable settlement.

In late  1996,  TF  Systems,  Inc.'s  former  law firm  claimed  that it was due
approximately  $285,000  in  legal  fees  related  primarily  to  obtaining  the
manufacturing and marketing rights to the Purifiner for TF Systems, Inc. ("TFS")
and the Company.  TFS was awaiting the judgment of an appellate  court which, if
adjudicated in TFS's favor, would have provided TFS with sufficient funds to pay
such legal fees and other  possible legal fee claims  aggregating  approximately
$100,000.  On February  26, 1997,  the  appellate  court ruled  against TFS and,
accordingly,  the funds  discussed  above are not currently  available to TFS to
satisfy such claims.  T/F  Purifiner,  Inc. did not assume these  obligations as
part of its  purchase of TFS and  management  believes  such amounts are not the
responsibility  of T/F  Purifiner,  Inc.  However,  the ultimate  outcome of the
claims  against the Company  cannot be determined at this time. No liability has
been recorded for this claim in the accompanying balance sheet.

4.   JOINT VENTURE

Effective  January 1, 1996, the Company  entered into a joint venture  agreement
whereby such venture,  TF Purifiner Ltd.  ("Ltd"),  will sell and distribute the


                                            6


<PAGE>

                                   T/F Purifiner, Inc.

                        Notes to Financial Statements (continued)
                                       (Unaudited)

4.   JOINT VENTURE (CONTINUED)

Company's product in Europe, the Middle East and certain African countries.  The
Company  has an  approximate  45%  interest  in  Ltd's  operations  (50%  voting
interest) and is accounting for Ltd using the equity method.  The Company is not
required to fund Ltd and will sell product to Ltd until such time as Ltd decides
to  exercise  its  rights  under the  agreement  to  manufacture  the  Company's
products.  Ltd was initially  capitalized with approximately $88,000 provided by
one of its  shareholders.  Through  March 31,  1997,  Ltd  advanced  the Company
approximately  $115,000, to be used to fund certain patent and trademark filings
for the venture's exclusive territory. At March 31, 1997,  approximately $10,000
remained  unexpended.  For the three months  ended March 31, 1997 and 1996,  the
Company had sales of approximately $21,000 and $167,000, respectively to Ltd, at
negotiated prices. At March 31, 1997 and 1996, approximately $14,000 and $12,000
has been recorded as  unrealized  intercompany  profit  related to the inventory
sold to Ltd which is  included  in Ltd's  inventory  at March 31,  1997 an 1996,
respectively.

At March  31,  1997  and  1996  summarized  financial  information  of Ltd is as
follows:

                                                  1996       1997
                                                  ----       ----
      Total assets                          $  112,000   $  458,000
      Total liabilities                        228,000    1,062,000 (1)
      Capital deficiency                      (116,000)    (604,000)  
      Total revenues                            23,000       77,000
      Gross profit                               8,000       30,000
      Net loss                                 (81,000)    (123,000)

(1)  Includes  approximately  $909,000  of  loans  due to one of  Ltd's  foreign
shareholders, collateralized by substantially all the tangible assets of Ltd.

5.   COMMON STOCK

During the three months ended March 31, 1997, 56,375 shares of Common Stock were
issued pursuant to the exercise of options at exercise prices ranging from $2.00
to $2.20 per share. At March 31, 1997, the Company had received  $29,494 in cash
proceeds  and was  owed  $85,131,  substantially  all  from  current  or  former
employees, related to the cashless exercise of these options.








                                        7

<PAGE>

                               T/F Purifiner, Inc.

                    Notes to Financial Statements (continued)
                                   (Unaudited)

6.   STOCK OPTIONS AND WARRANTS

During the three  months  ended  March 31,  1997,  the Company  granted  227,500
options to purchase Common Stock to various employees at exercise prices ranging
from $8.50 to $10.00  and  60,000  options to  consultants  at  exercise  prices
ranging from $9.00 to $9.50 per share.  Additionally,  during this  period,  the
Company granted 10,000 warrants to various  consultants which are exercisable at
$9.50 per share and expire on January 27, 1999.

During the three  months  ended March 31,  1997,  the Company  expensed  $66,105
related to  compensatory  stock options and warrants to various  consultants and
the Board of Advisors using the Black-Scholes Option Pricing Model.

7.    OTHER ASSETS

In January 1997, as amended,  the Company  loaned Richard C. Ford, its President
and principal shareholder, $200,000 bearing interest at 10% per annum ($4,703 at
March 31, 1997) and due in June 1997,  secured by 40,000 shares of the Company's
Common Stock owned by Mr. Ford.

 8.    SUBSEQUENT EVENTS

Subsequent to March 31, 1997, the Company  granted 100,000 and 50,000 options to
purchase  Common  Stock to its new  President  and  Director  and to an existing
employee / Director, respectively, at an exercise price of $8.50 per share.


























                                        8

<PAGE>

ITEM 2.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND
            RESULTS OF OPERATIONS

The following  should be read in conjunction  with  Management's  Discussion and
Analysis  of  Financial  Condition  and  Results of  Operations  included in the
Company's Form 10-KSB.

Other than historical and factual statements, the matters and items discussed in
this Quarterly Report on Form 10-QSB are forward-looking statements that involve
risks and  uncertainties.  Actual  results of the Company may differ  materially
from the results discussed in the  forward-looking  statements.  Certain factors
that could contribute to such differences are discussed with the forward-looking
statements throughout this report.

GENERAL

The Company was formed in 1987, and commenced limited operations in 1991 when it
obtained  worldwide  manufacturing  and  marketing  rights  to the  Purifiner(R)
products.  The  growth  in the  Company  is  primarily  due  to  the  increasing
acceptance of the Company's products by the marketplace.  This acceptance is the
result of various factors, including the increased credibility of the product as
a result of its commercial relationship with well-known entities and the growing
desire of users to reduce maintenance costs, extend engine life and preserve the
environment.

RESULTS OF OPERATIONS

The  following  table sets forth for the periods  indicated  the  percentage  of
revenues  represented by certain items reflected in the Company's  statements of
operations.

                                                Percentage of Revenues
                                                ----------------------
                                                    Three months
                                                   Ended March 31,
                                                   ---------------
                                                 1996         1997
                                                 ----         ----
Net sales                                         100 %         100 %
Operating costs and expenses:
  Cost of sales                                   (63)          (65)
  Selling expenses                                (34)         (139)
  General and administrative expenses             (30)          (62)
  Other                                            (3)            1
                                                ------        ------
Total operating costs and expenses               (130)         (265)
                                                ------        ------

Operating loss                                    (30)%        (165)%
                                                ======        ======





                                        9


<PAGE>

THREE  MONTHS  ENDED MARCH 31, 1997  COMPARED  WITH THREE MONTHS ENDED MARCH 31,
1996

      Net Sales.  Net sales decreased by 3% from $428,627 in 1996 to $415,901 in
1997.  This decrease was primarily  attributable  to the effect of the Company's
price  reductions  implemented  in the last quarter of 1996.  During  1996,  the
Company had approximately $167,000 of sales to Ltd., the Company's joint venture
formed in 1996 compared to approximately $21,000 in 1997. Approximately, $14,000
of  intercompany  profit on these sales to Ltd.  have been deferred at March 31,
1997.


      Effective October 15, 1996, the Company  implemented a new product pricing
strategy to reduce the Company's  selling prices to enable end users to obtain a
significantly  improved  return on  investment.  The Company  believes  this new
strategy will promote the sale of the Company's products and result in increased
long-term  revenues from unit and replacement  filter sales and also provide the
Company  with the  ability to reduce its  product  costs,  primarily  through 1)
volume purchase discounts, 2) utilization of excess fixed manufacturing capacity
and 3) improved production processes. If the Company does not realize these cost
savings, its gross margin will be adversely effected.

      Cost of Sales.  Cost of sales  increased  by 1% from  $268,338  in 1996 to
$272,329 in 1997.  The  Company's  gross margin  decreased  from 37.4% to 34.5%,
substantially  all due to the significant  price reductions  implemented in 1996
offset by the  reduction  of sales made to Ltd.  at  substantially  lower  sales
prices than the Company's exclusive  international  distributor  pricing. To the
extent additional sales are made by the Company to Ltd., the Company's aggregate
gross margin will be adversely affected.

      Selling Expenses. Selling expenses increased by 290% from $147,378 in 1996
to $574,617 in 1997. The primary reasons for this increase were the increases in
other selling  expenses such as salaries for new personnel,  compensatory  stock
options and warrants,  commissions,  brochures and catalogs, advertising, travel
and trade show  expenses in 1997  versus  1996.  As a  percentage  of  revenues,
selling expenses increased from 34% in 1996 to 139% in 1997.

      Commencing  in  late  1996  the  Company  began   implementing  a  product
evaluation program, whereby it would supply Purifiners,  replacement filters and
installation services at no cost to certain potential customers or to assist its
distributors   potential  customers,   to  evaluate  the  effectiveness  of  the
Purifiner.  The costs  related to this  evaluation  program has been  charged to
selling  expenses  and no revenues  have been  recognized.  To the extent  these
evaluations  are not  successful  or the Company is unable to  consummate  these
potential sales, the Company's future revenues will be adversely effected.

      General and Administrative  Expenses.  General and administrative expenses
increased by 99% from  $129,921 in 1996 to $258,391 in 1997 and, as a percent of
revenues,  increased from 30% to 62%. This dollar  increase was generally due to
the increased level of business activity,  specifically  including  increases in
personnel,  consultants,  compensatory  stock options and warrants,  travel, and
professional fees.

                                       10


<PAGE>

      Operating Loss. As a result of the foregoing, the Company's operating loss
increased from $128,960 in 1996 to $685,938 in 1997.

      Interest Expense and Income. Interest expense decreased by 70% from $8,871
for 1996 to $2,638 for 1997.  This  change  resulted  from a decrease in average
short and long term borrowings  outstanding in 1997 versus the comparable period
for 1996.  Interest income  increased to 16,246 in 1997 as a result of investing
idle cash balances and interest earned on notes receivable.

      Net Loss. As a result of the  foregoing,  the Company's net loss increased
from $137,831 for 1996 to $672,330 for 1997.

LIQUIDITY AND CAPITAL RESOURCES

      To  date,  the  Company's  capital  requirements  in  connection  with its
business  activities have been and will continue to be significant.  To fund its
activities,  the Company has been  dependent  upon available cash generated from
operations,   the  proceeds  of  sales  of  its   securities  to  investors  and
stockholders,  and other loans.  The Company's 1996 auditors  report included an
explanatory  paragraph  which  stated that  because  the  Company has  sustained
recurring  operating  losses and negative cash flows from operating  activities,
these factors raise substantial doubt about the Company's ability to continue as
a going concern.

      At March 31,  1997,  the Company had working  capital of $976,544  and its
current ratio (current assets to current liabilities) was 2.35 to 1, as compared
with working  capital of $1,727,933  and a current ratio of 3.1 to 1 at December
31,  1996.  At  March  31,  1997,  the  Company  had  $704,182  of cash and cash
equivalents.  Outstanding  short-term  debt from  lenders and  shareholders  was
$139,546 at March 31, 1997 and included a shareholder loan of $99,699 due to the
Estate of Willard Taylor,  substantially all on January 31, 1998. The balance of
long term debt was $365,107 at March 31, 1997,  and included a shareholder  loan
of $303,297 due to the Estate of Willard Taylor.

      At March 31,  1997,  the Company  owed  approximately  $436,000 in current
liabilities  to various trade and other  unrelated  creditors.  These  creditors
continue to provide services to the Company;  however, there can be no assurance
that they will  continue  to do so in the future  while all or a portion of such
amounts remains  outstanding.  The Company has made certain payments and intends
to use a portion of existing  funds and future  financings  to repay the amounts
due to creditors.

      Consistent with industry practices, the Company may accept product returns
or provide other credits in the event that a distributor  holds excess inventory
of the Company's  products.  The Company's  sales are made on credit terms which
vary significantly depending on the nature of the sale. In addition, the Company
does not hold  collateral to secure  payment from its United States and Canadian
distributors.  Therefore,  a default in payment by one or more of the  Company's
United States and Canadian  distributors or customers could adversely affect the
Company's business,  results of operations and financial condition.  The Company
believes it has established sufficient reserves to accurately reflect the amount
or  likelihood  of product  returns or credits  and  uncollectible  receivables.


                                          11


<PAGE>

However,  there  can be no  assurance  that  actual  returns  and  uncollectible
receivables will not exceed the Company's reserves.  Any significant increase in
product returns or uncollected  accounts receivable beyond reserves could have a
material  adverse  effect on the Company's  business,  results of operations and
financial condition. The Company has not experienced material product returns or
uncollectible receivables in the past.

      Sales of the Company's products will depend principally on end user demand
for such products. The oil filtration industry has historically been competitive
and, as is typically the case with  innovative  products,  the ultimate level of
demand for the  Company's  products is subject to a high degree of  uncertainty.
Developing market acceptance, particularly worldwide, for the Company's existing
and  proposed  products  will  require  substantial  marketing  efforts  and the
expenditure  of a  significant  amount  of  funds  to  inform  customers  of the
perceived benefits and cost advantages of its products.

      The Company  currently is not generating  sufficient  revenues to fund its
existing and planned expansion of its operations.  Accordingly,  the Company has
embarked and is  implementing  plans to raise  additional  capital.  The Company
intends to use such  additional  financing to increase its  marketing  and sales
efforts,  including the hiring of additional  sales and technical  personnel and
related  costs,   implementation  of  advertising,   promotional  and  marketing
programs,  and  additional  fleet testing  programs.  Additionally,  the Company
intends  to   continue   hiring   additional   manufacturing,   operating,   and
administrative  personnel and acquire additional capital equipment and leasehold
improvements to meet expected production increases.

      The  above  is not an  all  inclusive  listing  of the  Company's  planned
expenditures. In the event that the proceeds from future offerings or financings
are not received,  the Company will not be able to implement its current  plans.
The inability to obtain additional  financing when needed, would have a material
adverse  effect on the Company,  including  requiring  the Company to curtail or
cease its operations.

IMPACT OF INFLATION

      Inflation  has not had a significant  impact on the Company's  operations.
However, any significant  decrease in the price for oil or labor,  environmental
compliance  costs,  and engine  replacement  costs  could  adversely  impact the
Company's  end  users  cost/benefit  analysis  as to the  use  of the  Company's
products.

QUARTERLY FLUCTUATIONS

      The Company's operating results may fluctuate significantly from period to
period  as  a  result  of a  variety  of  factors,  including  product  returns,
purchasing patterns of consumers, the length of the Company's sales cycle to key
customers and  distributors,  the timing of the introduction of new products and
product enhancements by the Company and its competitors,  technological factors,
variations  in  sales by  product  and  distribution  channel,  and  competitive
pricing.  Consequently, the Company's product revenues may vary significantly by
quarter  and  the  Company's   operating  results  may  experience   significant
fluctuations.

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<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

   a)   Exhibits:

        Exhibit 27 - Financial Data Schedule (Electronic filing only)

   b)   Reports on Form 8-K.

        None

                                   SIGNATURES

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

                                                             T/F PURIFINER, INC.
                                                                    (Registrant)



Date:  May 6, 1997                                       By  /s/ Richard C. Ford
                                                         -----------------------
                                                                 Richard C. Ford
                              Chairman of the Board, Chief Executive Officer and
                                                         Chief Financial Officer



























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